MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or
the "Company”) today reported results for the third quarter of
2023.
Third Quarter
2023
Highlights1
-
Net income of $9.1 million, or $0.58 per diluted common share,
compared to net income of $7.6 million, or $0.48 per diluted common
share, for the linked quarter.
-
Annualized loan growth of 4.8%.
-
Core deposits increased $83.2 million or 2%.
-
Nonperforming assets ratio of 0.45%; net charge-off ratio was
0.04%.
-
Efficiency ratio improved to 66.06%.
-
Announced sale of Florida operations and acquisition of Denver
Bankshares, Inc. ("Denver Bankshares") in strategic geographic
repositioning.
Subsequent Events
-
On October 24, 2023, the Board of Directors declared a cash
dividend of $0.2425 per common share.
CEO COMMENTARY
Charles (Chip) Reeves, Chief Executive Officer
of the Company, commented, “Despite the difficult interest rate
environment, which continues to compress our net interest margin,
we had another strong quarter of strategic plan execution,
highlighted by the September announcement of the sale of our
Florida operations, with the proceeds reinvested into the
acquisition of Denver Bankshares. These two transactions align our
geographic footprint with our Strategic Plan, while accelerating
our Denver market growth by three to four years. We are confident
in our ability to integrate this low-risk merger, while continuing
our growth trajectory in the attractive Denver MSA. Also, in the
third quarter of 2023, our Treasury Management initiatives and
client acquisition strategies resulted in balanced loan and deposit
growth, providing ample flexibility for future, selective loan
growth. Asset quality metrics were affected by one senior living
credit moving to non-accrual, however, charge-offs and 30-89 day
past dues remain at historically low levels. We remain diligent as
uncertain economic conditions begin to normalize asset quality
migration.”
Mr. Reeves continued, “While we continue to
invest for growth, we are also laser focused on improving our
operational effectiveness. Expenses in the quarter were
well-controlled and our cost savings initiative to reduce
noninterest expense by 2.5% is well underway. To conclude, we've
made substantial progress executing our strategic initiatives over
the last two quarters, and while we have more to do, I could not be
more pleased with our team and the execution of our strategic
initiatives.”
_______________1 Third Quarter Summary compares
to the second quarter of 2023 (the "linked quarter") unless
noted.
|
|
As of or for the quarter ended |
|
Nine Months Ended |
(Dollars
in thousands, except per share amounts and as noted) |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Financial Results |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
44,436 |
|
|
$ |
45,708 |
|
|
$ |
58,321 |
|
|
$ |
126,174 |
|
|
$ |
159,373 |
|
Credit loss expense |
|
|
1,551 |
|
|
|
1,597 |
|
|
|
638 |
|
|
|
4,081 |
|
|
|
3,920 |
|
Noninterest expense |
|
|
31,544 |
|
|
|
34,919 |
|
|
|
34,623 |
|
|
|
99,782 |
|
|
|
98,348 |
|
Net income |
|
|
9,138 |
|
|
|
7,594 |
|
|
|
18,317 |
|
|
|
18,129 |
|
|
|
44,833 |
|
Per Common Share |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
1.17 |
|
|
$ |
1.15 |
|
|
$ |
2.86 |
|
Book
value |
|
|
32.21 |
|
|
|
31.96 |
|
|
|
30.23 |
|
|
|
32.21 |
|
|
|
30.23 |
|
Tangible book value(1) |
|
|
26.60 |
|
|
|
26.26 |
|
|
|
24.17 |
|
|
|
26.60 |
|
|
|
24.17 |
|
Balance Sheet & Credit Quality |
|
|
|
|
|
|
|
|
|
|
Loans
In millions |
|
$ |
4,066.0 |
|
|
$ |
4,018.6 |
|
|
$ |
3,746.3 |
|
|
$ |
4,066.0 |
|
|
$ |
3,746.3 |
|
Investment securities In millions |
|
|
1,958.5 |
|
|
|
2,003.1 |
|
|
|
2,299.9 |
|
|
|
1,958.5 |
|
|
|
2,299.9 |
|
Deposits In millions |
|
|
5,363.3 |
|
|
|
5,445.4 |
|
|
|
5,476.8 |
|
|
|
5,363.3 |
|
|
|
5,476.8 |
|
Net
loan charge-offs In millions |
|
|
0.5 |
|
|
|
0.9 |
|
|
|
0.6 |
|
|
|
1.7 |
|
|
|
3.1 |
|
Allowance for credit losses ratio |
|
|
1.27 |
% |
|
|
1.25 |
% |
|
|
1.39 |
% |
|
|
1.27 |
% |
|
|
1.39 |
% |
Selected Ratios |
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
0.56 |
% |
|
|
0.47 |
% |
|
|
1.13 |
% |
|
|
0.37 |
% |
|
|
0.97 |
% |
Net
interest margin, tax equivalent(1) |
|
|
2.35 |
% |
|
|
2.52 |
% |
|
|
3.08 |
% |
|
|
2.54 |
% |
|
|
2.92 |
% |
Return on average equity |
|
|
7.14 |
% |
|
|
6.03 |
% |
|
|
14.56 |
% |
|
|
4.81 |
% |
|
|
11.81 |
% |
Return on average tangible equity(1) |
|
|
9.68 |
% |
|
|
8.50 |
% |
|
|
19.32 |
% |
|
|
7.03 |
% |
|
|
15.28 |
% |
Efficiency ratio(1) |
|
|
66.06 |
% |
|
|
71.13 |
% |
|
|
53.67 |
% |
|
|
66.40 |
% |
|
|
56.70 |
% |
|
(1) Non-GAAP measure. See the Non-GAAP Measures
section for a reconciliation to the most directly comparable GAAP
measure.
REVENUE REVIEW
Revenue |
|
|
|
|
|
|
|
Change |
|
|
Change |
|
|
|
|
|
|
|
|
3Q23 vs |
|
|
3Q23 vs |
|
(Dollars in
thousands) |
|
3Q23 |
|
2Q23 |
|
3Q22 |
|
2Q23 |
|
|
3Q22 |
|
Net interest income |
|
$ |
34,575 |
|
|
$ |
36,962 |
|
|
$ |
45,733 |
|
|
|
(6 |
)% |
|
|
(24 |
)% |
Noninterest income |
|
|
9,861 |
|
|
|
8,746 |
|
|
|
12,588 |
|
|
|
13 |
% |
|
|
(22 |
)% |
Total revenue, net of interest expense |
|
$ |
44,436 |
|
|
$ |
45,708 |
|
|
$ |
58,321 |
|
|
|
(3 |
)% |
|
|
(24 |
)% |
|
Total revenue for the third quarter of 2023
decreased $1.3 million from the second quarter of 2023 as a result
of lower net interest income, partially offset by higher
noninterest income. Compared to the third quarter of 2022, total
revenue decreased $13.9 million due to lower net interest income
and noninterest income.
Net interest income of $34.6 million for the
third quarter of 2023 decreased $2.4 million from the second
quarter of 2023 and $11.2 million from the third quarter of 2022 as
a result of higher funding costs and volumes and lower interest
earning asset volumes, partially offset by higher interest earning
asset yields.
The Company's tax equivalent net interest margin
was 2.35% in the third quarter of 2023 compared to 2.52% in the
second quarter of 2023, as higher earning asset yields were more
than offset by increased funding costs. The cost of interest
bearing liabilities increased 35 basis points ("bps") to 2.33%, due
to interest bearing deposit costs of 2.05%, short-term borrowing
costs of 4.29%, and long-term debt costs of 6.78%, which increased
26 bps, 138 bps and 40 bps, respectively from the second quarter of
2023. Total interest earning assets yield increased 12 bps from the
second quarter of 2023, as a result of an increase in loan and
securities yields of 14 bps and 1 bp, respectively. Our
cycle-to-date interest bearing deposit beta was 34%.
The tax equivalent net interest margin was 2.35%
in the third quarter of 2023 compared to 3.08% in the third quarter
of 2022, driven by higher funding costs and volumes, partially
offset by higher interest earning asset yields. The cost of
interest bearing liabilities increased 169 bps to 2.33%, due to
interest bearing deposit costs of 2.05%, short-term borrowing costs
of 4.29%, and long-term debt costs of 6.78%, which increased 159
bps, 295 bps and 208 bps, respectively from the third quarter of
2022. Total interest earning assets yield increased 67 bps from the
third quarter of 2022, primarily as a result of an increase in loan
and securities yields of 75 bps and 9 bps, respectively.
Noninterest Income |
|
|
|
|
|
|
Change |
|
Change |
|
|
|
|
|
|
|
3Q23 vs |
|
3Q23 vs |
(In
thousands) |
3Q23 |
|
2Q23 |
|
3Q22 |
|
2Q23 |
|
3Q22 |
Investment services and trust activities |
$ |
3,004 |
|
|
$ |
3,119 |
|
|
$ |
2,876 |
|
|
|
(4 |
)% |
|
|
4 |
% |
Service charges and fees |
|
2,146 |
|
|
|
2,047 |
|
|
|
2,075 |
|
|
|
5 |
% |
|
|
3 |
% |
Card
revenue |
|
1,817 |
|
|
|
1,847 |
|
|
|
1,898 |
|
|
|
(2 |
)% |
|
|
(4 |
)% |
Loan
revenue |
|
1,462 |
|
|
|
909 |
|
|
|
1,722 |
|
|
|
61 |
% |
|
|
(15 |
)% |
Bank-owned life insurance |
|
626 |
|
|
|
616 |
|
|
|
579 |
|
|
|
2 |
% |
|
|
8 |
% |
Investment securities gains (losses), net |
|
79 |
|
|
|
(2 |
) |
|
|
(163 |
) |
|
|
n / m |
|
|
|
(148 |
)% |
Other |
|
727 |
|
|
|
210 |
|
|
|
3,601 |
|
|
|
246 |
% |
|
|
(80 |
)% |
Total noninterest income |
$ |
9,861 |
|
|
$ |
8,746 |
|
|
$ |
12,588 |
|
|
|
13 |
% |
|
|
(22 |
)% |
Results are not meaningful (n/m) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income for the third quarter of 2023
increased $1.1 million from the linked quarter due primarily to a
$0.6 million favorable change in loan revenue, coupled with a $0.5
million increase in other revenue. Loan revenue reflected a
favorable quarter-over quarter change in the fair value of our
mortgage servicing rights of $0.9 million, partially offset by a
decrease in loan sale gains generated by our governmental lending
business and a decrease in revenue in our mortgage origination
business. Other revenue reflected an increase of $0.6 million in
swap origination fee income. Noninterest income decreased $2.7
million from the third quarter of 2022, primarily due to the
decline of $2.9 million in other revenue stemming from a one-time
settlement recognized in the third quarter of 2022.
EXPENSE REVIEW
Noninterest Expense |
|
|
|
|
|
|
Change |
|
Change |
|
|
|
|
|
|
|
3Q23 vs |
|
2Q23 vs |
(In
thousands) |
3Q23 |
|
2Q23 |
|
3Q22 |
|
2Q23 |
|
3Q22 |
Compensation and employee benefits |
$ |
18,558 |
|
|
$ |
20,386 |
|
|
$ |
20,046 |
|
|
(9 |
)% |
|
(7 |
)% |
Occupancy expense of premises, net |
|
2,405 |
|
|
|
2,574 |
|
|
|
2,577 |
|
|
(7 |
)% |
|
(7 |
)% |
Equipment |
|
2,123 |
|
|
|
2,435 |
|
|
|
2,358 |
|
|
(13 |
)% |
|
(10 |
)% |
Legal
and professional |
|
1,678 |
|
|
|
1,682 |
|
|
|
2,012 |
|
|
— |
% |
|
(17 |
)% |
Data
processing |
|
1,504 |
|
|
|
1,521 |
|
|
|
1,731 |
|
|
(1 |
)% |
|
(13 |
)% |
Marketing |
|
782 |
|
|
|
1,142 |
|
|
|
1,139 |
|
|
(32 |
)% |
|
(31 |
)% |
Amortization of intangibles |
|
1,460 |
|
|
|
1,594 |
|
|
|
1,789 |
|
|
(8 |
)% |
|
(18 |
)% |
FDIC
insurance |
|
783 |
|
|
|
862 |
|
|
|
415 |
|
|
(9 |
)% |
|
89 |
% |
Communications |
|
206 |
|
|
|
260 |
|
|
|
302 |
|
|
(21 |
)% |
|
(32 |
)% |
Foreclosed assets, net |
|
2 |
|
|
|
(6 |
) |
|
|
42 |
|
|
(133 |
)% |
|
(95 |
)% |
Other |
|
2,043 |
|
|
|
2,469 |
|
|
|
2,212 |
|
|
(17 |
)% |
|
(8 |
)% |
Total noninterest expense |
$ |
31,544 |
|
|
$ |
34,919 |
|
|
$ |
34,623 |
|
|
(10 |
)% |
|
(9 |
)% |
Merger-related Expenses |
|
|
|
|
|
(In
thousands) |
3Q23 |
|
2Q23 |
|
3Q22 |
Compensation and employee benefits |
$ |
— |
|
|
$ |
— |
|
|
$ |
132 |
|
Equipment |
|
— |
|
|
|
— |
|
|
|
14 |
|
Legal
and professional |
|
11 |
|
|
|
— |
|
|
|
193 |
|
Data
processing |
|
— |
|
|
|
— |
|
|
|
304 |
|
Marketing |
|
— |
|
|
|
— |
|
|
|
90 |
|
Other |
|
— |
|
|
|
— |
|
|
|
30 |
|
Total merger-related expenses |
$ |
11 |
|
|
$ |
— |
|
|
$ |
763 |
|
Noninterest expense for the third quarter of
2023 decreased $3.4 million, or 9.7%, from the linked quarter with
overall decreases in all noninterest expense categories except
foreclosed assets, net. The decrease in compensation and employee
benefits reflected a reduction of $1.1 million in severance
expense, as well as a reduction of $1.1 million in medical
insurance benefit expense, driven primarily by accrual adjustments.
The $0.4 million decline in other noninterest expense was driven by
various changes, including $0.2 million of executive relocation
expense recognized in the linked quarter that did not recur and
reduced loan expenses by $0.2 million. The $0.4 million decrease in
marketing reflected a decline in advertising and sponsorships.
Noninterest expense for the third quarter of
2023 decreased $3.1 million, or 8.9%, from the third quarter of
2022, with overall decreases in all noninterest expense categories
except FDIC insurance. These decreases primarily reflected a $1.8
million decline in employee benefits and incentives and commission
expense, coupled with a $0.8 million decrease in merger-related
expenses.
The Company's effective income tax rate
increased to 19.4% in the third quarter of 2023 compared to 17.4%
in the linked quarter. The higher effective income tax rate
reflected an adjustment to the full-year 2023 estimated taxable
income in the Company's annual effective tax rate calculation. The
effective income tax rate for the full year 2023 is expected to be
in the range of 18% - 20%.
BALANCE SHEET REVIEW
Total assets were $6.47 billion at
September 30, 2023, compared to $6.52 billion at June 30,
2023 and $6.49 billion at September 30, 2022. The decrease
from June 30, 2023 was driven by lower cash and securities
balances, partially offset by higher loan balances. Compared to
September 30, 2022, the decrease was due primarily to lower
securities balances resulting from the balance sheet repositioning
executed in the first quarter of 2023 as well as lower cash
balances, partially offset by higher loan balances.
Loans Held for Investment |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
(Dollars in thousands) |
|
Balance |
|
|
|
% of Total |
|
|
|
Balance |
|
|
|
% of Total |
|
|
|
Balance |
|
|
|
% of Total |
|
Commercial and industrial |
$ |
1,078,773 |
|
|
|
26.5 |
% |
|
$ |
1,089,269 |
|
|
|
27.1 |
% |
|
$ |
1,041,662 |
|
|
|
27.8 |
% |
Agricultural |
|
111,950 |
|
|
|
2.8 |
|
|
|
106,148 |
|
|
|
2.6 |
|
|
|
116,229 |
|
|
|
3.1 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
|
331,868 |
|
|
|
8.2 |
|
|
|
313,836 |
|
|
|
7.8 |
|
|
|
276,941 |
|
|
|
7.4 |
|
Farmland |
|
182,621 |
|
|
|
4.5 |
|
|
|
183,378 |
|
|
|
4.6 |
|
|
|
183,581 |
|
|
|
4.9 |
|
Multifamily |
|
337,509 |
|
|
|
8.3 |
|
|
|
305,519 |
|
|
|
7.6 |
|
|
|
222,592 |
|
|
|
5.9 |
|
Other |
|
1,324,019 |
|
|
|
32.5 |
|
|
|
1,331,886 |
|
|
|
33.1 |
|
|
|
1,226,983 |
|
|
|
32.8 |
|
Total commercial real estate |
|
2,176,017 |
|
|
|
53.5 |
|
|
|
2,134,619 |
|
|
|
53.1 |
|
|
|
1,910,097 |
|
|
|
51.0 |
|
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family first liens |
|
456,771 |
|
|
|
11.2 |
|
|
|
448,096 |
|
|
|
11.2 |
|
|
|
446,373 |
|
|
|
11.9 |
|
One-to-four family junior liens |
|
173,275 |
|
|
|
4.3 |
|
|
|
168,755 |
|
|
|
4.2 |
|
|
|
157,276 |
|
|
|
4.2 |
|
Total residential real estate |
|
630,046 |
|
|
|
15.5 |
|
|
|
616,851 |
|
|
|
15.4 |
|
|
|
603,649 |
|
|
|
16.1 |
|
Consumer |
|
69,183 |
|
|
|
1.7 |
|
|
|
71,762 |
|
|
|
1.8 |
|
|
|
74,652 |
|
|
|
2.0 |
|
Loans held for investment, net of unearned income |
$ |
4,065,969 |
|
|
|
100.0 |
% |
|
$ |
4,018,649 |
|
|
|
100.0 |
% |
|
$ |
3,746,289 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commitments to extend credit |
$ |
1,251,345 |
|
|
|
|
|
|
$ |
1,296,719 |
|
|
|
|
|
|
$ |
1,159,323 |
|
|
|
|
|
Loans held for investment, net of unearned
income, increased $47.3 million, or 1.2%, to $4.07 billion from
$4.02 billion at June 30, 2023. This increase was driven by
new loan production in the third quarter of 2023.
Investment Securities |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
(Dollars in
thousands) |
Balance |
|
|
% of Total |
|
|
Balance |
|
|
% of Total |
|
|
Balance |
|
|
% of Total |
|
Available for sale |
$ |
872,770 |
|
|
|
44.6 |
% |
|
$ |
903,520 |
|
|
|
45.1 |
% |
|
$ |
1,153,304 |
|
|
|
50.1 |
% |
Held to maturity |
|
1,085,751 |
|
|
|
55.4 |
% |
|
|
1,099,569 |
|
|
|
54.9 |
% |
|
|
1,146,583 |
|
|
|
49.9 |
% |
Total investment securities |
$ |
1,958,521 |
|
|
|
|
|
|
$ |
2,003,089 |
|
|
|
|
|
|
$ |
2,299,887 |
|
|
|
|
|
Investment securities at September 30, 2023
were $1.96 billion, decreasing $44.6 million from June 30,
2023 and $341.4 million from September 30, 2022. The decrease
from the second quarter of 2023 was due primarily to paydowns,
calls, and maturities. The decrease from the third quarter of 2022
was due primarily to the balance sheet repositioning executed in
the first quarter of 2023.
Deposits |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
(Dollars in
thousands) |
Balance |
|
|
% of Total |
|
|
Balance |
|
|
% of Total |
|
|
Balance |
|
|
% of Total |
|
Noninterest bearing deposits |
$ |
924,213 |
|
|
|
17.2 |
% |
|
$ |
897,923 |
|
|
|
16.5 |
% |
|
$ |
1,139,694 |
|
|
|
20.8 |
% |
Interest checking
deposits |
|
1,334,481 |
|
|
|
24.9 |
|
|
|
1,397,276 |
|
|
|
25.7 |
|
|
|
1,705,289 |
|
|
|
31.2 |
|
Money market deposits |
|
1,127,287 |
|
|
|
21.0 |
|
|
|
1,096,432 |
|
|
|
20.1 |
|
|
|
991,783 |
|
|
|
18.1 |
|
Savings deposits |
|
619,805 |
|
|
|
11.6 |
|
|
|
585,967 |
|
|
|
10.8 |
|
|
|
700,843 |
|
|
|
12.8 |
|
Time deposits of $250 and
under |
|
703,646 |
|
|
|
13.1 |
|
|
|
648,586 |
|
|
|
11.9 |
|
|
|
537,616 |
|
|
|
9.8 |
|
Total core deposits |
|
4,709,432 |
|
|
|
87.8 |
|
|
|
4,626,184 |
|
|
|
85.0 |
|
|
|
5,075,225 |
|
|
|
92.7 |
|
Brokered time deposits |
|
220,063 |
|
|
|
4.1 |
|
|
|
365,623 |
|
|
|
6.7 |
|
|
|
— |
|
|
|
— |
|
Time deposits over $250 |
|
433,829 |
|
|
|
8.1 |
|
|
|
453,640 |
|
|
|
8.3 |
|
|
|
401,557 |
|
|
|
7.3 |
|
Total deposits |
$ |
5,363,324 |
|
|
|
100.0 |
% |
|
$ |
5,445,447 |
|
|
|
100.0 |
% |
|
$ |
5,476,782 |
|
|
|
100.0 |
% |
Total deposits declined $82.1 million, or 1.5%,
to $5.36 billion from $5.45 billion at June 30, 2023. Brokered
deposits decreased $145.6 million from $365.6 million at
June 30, 2023. Core deposits increased $83.2 million from
June 30, 2023.
Borrowed Funds |
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
(Dollars in
thousands) |
Balance |
|
|
% of Total |
|
|
Balance |
|
|
% of Total |
|
|
Balance |
|
|
% of Total |
|
Short-term borrowings |
$ |
373,956 |
|
|
|
75.0 |
% |
|
$ |
362,054 |
|
|
|
74.2 |
% |
|
$ |
304,536 |
|
|
|
66.4 |
% |
Long-term debt |
|
124,526 |
|
|
|
25.0 |
% |
|
|
125,752 |
|
|
|
25.8 |
% |
|
|
154,190 |
|
|
|
33.6 |
% |
Total borrowed funds |
$ |
498,482 |
|
|
|
|
|
|
$ |
487,806 |
|
|
|
|
|
|
$ |
458,726 |
|
|
|
|
|
Total borrowed funds were $498.5 million at
September 30, 2023 an increase of $10.7 million from
June 30, 2023 and an increase of $39.8 million from
September 30, 2022. The increase when compared to the linked
quarter was due to increased Federal Home Loan Bank overnight
borrowings, partially offset by a reduction in securities sold
under agreements to repurchase. The increase when compared to
September 30, 2022 was primarily due to Bank Term Funding
Program borrowings of $225 million, as compared to no such
borrowings in the prior year, partially offset by a reduction in
securities sold under agreements to repurchase and Federal Home
Loan Bank overnight borrowings.
Capital |
September 30, |
|
June 30, |
|
September 30, |
(Dollars in
thousands) |
2023 (1) |
|
|
2023 |
|
|
|
2022 |
|
Total shareholders' equity |
$ |
505,411 |
|
|
$ |
501,341 |
|
|
$ |
472,229 |
|
Accumulated other comprehensive loss |
|
(84,606 |
) |
|
|
(82,704 |
) |
|
|
(96,623 |
) |
MidWestOne Financial
Group, Inc. Consolidated |
|
|
|
|
|
Tier 1 leverage to average
assets ratio |
|
8.58 |
% |
|
|
8.47 |
% |
|
|
8.24 |
% |
Common equity tier 1 capital
to risk-weighted assets ratio |
|
9.52 |
% |
|
|
9.36 |
% |
|
|
9.18 |
% |
Tier 1 capital to
risk-weighted assets ratio |
|
10.31 |
% |
|
|
10.15 |
% |
|
|
9.97 |
% |
Total capital to risk-weighted
assets ratio |
|
12.45 |
% |
|
|
12.26 |
% |
|
|
12.10 |
% |
MidWestOne
Bank |
|
|
|
|
|
Tier 1 leverage to average
assets ratio |
|
9.51 |
% |
|
|
9.42 |
% |
|
|
9.31 |
% |
Common equity tier 1 capital
to risk-weighted assets ratio |
|
11.43 |
% |
|
|
11.31 |
% |
|
|
11.26 |
% |
Tier 1 capital to
risk-weighted assets ratio |
|
11.43 |
% |
|
|
11.31 |
% |
|
|
11.26 |
% |
Total
capital to risk-weighted assets ratio |
|
12.36 |
% |
|
|
12.22 |
% |
|
|
12.17 |
% |
(1) Regulatory capital ratios for
September 30, 2023 are preliminary
Total shareholders' equity at September 30,
2023 increased $4.1 million from June 30, 2023, driven by the
benefit of third quarter net income, partially offset by an
increase in accumulated other comprehensive loss and dividends paid
during the third quarter of 2023.
Accumulated other comprehensive loss at
September 30, 2023 increased $1.9 million compared to
June 30, 2023, primarily due to a decrease in available for
sale securities valuations. Accumulated other comprehensive loss
decreased $12.0 million from September 30, 2022.
On October 24, 2023, the Board of Directors
of the Company declared a cash dividend of $0.2425 per common
share. The dividend is payable December 15, 2023, to
shareholders of record at the close of business on December 1,
2023.
No common shares were repurchased by the Company
during the period June 30, 2023 through September 30,
2023 or for the subsequent period through October 26, 2023.
The current share repurchase program allows for the repurchase of
up to $15.0 million of the Company's common shares.
CREDIT QUALITY REVIEW
Credit Quality |
As of or For the Three Months Ended |
September 30, |
|
June 30, |
|
September 30, |
(Dollars in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Credit loss expense related to
loans |
$ |
1,651 |
|
|
$ |
1,497 |
|
|
$ |
338 |
|
Net charge-offs |
|
451 |
|
|
|
897 |
|
|
|
588 |
|
Allowance for credit
losses |
|
51,600 |
|
|
|
50,400 |
|
|
|
52,100 |
|
Pass |
$ |
3,785,908 |
|
|
$ |
3,769,309 |
|
|
$ |
3,550,695 |
|
Special Mention / Watch |
|
163,222 |
|
|
|
133,904 |
|
|
|
101,255 |
|
Classified |
|
116,839 |
|
|
|
115,436 |
|
|
|
94,339 |
|
Loans greater than 30 days
past due and accruing |
$ |
6,449 |
|
|
$ |
6,201 |
|
|
$ |
5,960 |
|
Nonperforming loans |
$ |
28,987 |
|
|
$ |
14,448 |
|
|
$ |
25,963 |
|
Nonperforming assets |
|
28,987 |
|
|
|
14,448 |
|
|
|
26,066 |
|
Net charge-off ratio(1) |
|
0.04 |
% |
|
|
0.09 |
% |
|
|
0.06 |
% |
Classified loans ratio(2) |
|
2.87 |
% |
|
|
2.87 |
% |
|
|
2.52 |
% |
Nonperforming loans
ratio(3) |
|
0.71 |
% |
|
|
0.36 |
% |
|
|
0.69 |
% |
Nonperforming assets
ratio(4) |
|
0.45 |
% |
|
|
0.22 |
% |
|
|
0.40 |
% |
Allowance for credit losses
ratio(5) |
|
1.27 |
% |
|
|
1.25 |
% |
|
|
1.39 |
% |
Allowance for credit losses to
nonaccrual loans ratio(6) |
|
178.63 |
% |
|
|
355.03 |
% |
|
|
208.18 |
% |
(1) Net charge-off ratio is calculated as annualized net
charge-offs divided by the sum of average loans held for
investment, net of unearned income and average loans held for sale,
during the period.(2) Classified loans ratio is calculated as
classified loans divided by loans held for investment, net of
unearned income, at the end of the period.(3) Nonperforming loans
ratio is calculated as nonperforming loans divided by loans held
for investment, net of unearned income, at the end of the
period.(4) Nonperforming assets ratio is calculated as
nonperforming assets divided by total assets at the end of the
period.(5) Allowance for credit losses ratio is calculated as
allowance for credit losses divided by loans held for investment,
net of unearned income, at the end of the period.(6) Allowance
for credit losses to nonaccrual loans ratio is calculated as
allowance for credit losses divided by nonaccrual loans at the end
of the period.
Compared to the linked quarter, nonperforming
loans and assets ratios increased 35 bps and 23 bps, respectively,
and when compared to the prior year increased 2 bps and 5 bps,
respectively, to 0.71% and 0.45%, primarily due to the downgrade of
a single commercial relationship.
As of September 30, 2023, the allowance for
credit losses was $51.6 million, or 1.27% of loans held for
investment, net of unearned income, compared with $50.4 million, or
1.25% of loans held for investment, net of unearned income, at
June 30, 2023. Credit loss expense of $1.6 million in the
third quarter of 2023 was primarily attributable to loan
growth.
Nonperforming Loans Roll Forward(Dollars in
thousands) |
|
Nonaccrual |
|
|
|
90+ Days Past Due & Still Accruing |
|
|
|
Total |
|
Balance at
June 30, 2023 |
$ |
14,196 |
|
|
$ |
252 |
|
|
$ |
14,448 |
|
Loans placed on nonaccrual or
90+ days past due & still accruing |
|
16,394 |
|
|
|
140 |
|
|
|
16,534 |
|
Proceeds related to repayment
or sale |
|
(799 |
) |
|
|
(1 |
) |
|
|
(800 |
) |
Loans returned to accrual
status or no longer past due |
|
(298 |
) |
|
|
(252 |
) |
|
|
(550 |
) |
Charge-offs |
|
(603 |
) |
|
|
(39 |
) |
|
|
(642 |
) |
Transfers to foreclosed
assets |
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
Balance at September 30,
2023 |
$ |
28,887 |
|
|
$ |
100 |
|
|
$ |
28,987 |
|
CONFERENCE CALL DETAILS
The Company will host a conference call for
investors at 11:00 a.m. CT on Friday, October 27, 2023. To
participate, you may pre-register for this call utilizing the
following link:
https://www.netroadshow.com/events/login?show=03182047&confId=56188.
After pre-registering for this event you will receive your access
details via email. On the day of the call, you are also able to
dial 1-833-470-1428 using an access code of 146099 at least fifteen
minutes before the call start time. If you are unable to
participate on the call, a replay will be available until January
25, 2024 by calling 1-866-813-9403 and using the replay access code
of 205972. A transcript of the call will also be available on the
Company’s web site (www.midwestonefinancial.com) within three
business days of the call.
ABOUT
MIDWESTONE FINANCIAL GROUP,
INC.
MidWestOne Financial Group, Inc. is a financial
holding company headquartered in Iowa City, Iowa. MidWestOne is the
parent company of MidWestOne Bank, which operates banking offices
in Iowa, Minnesota, Wisconsin, Florida, and Colorado. MidWestOne
provides electronic delivery of financial services through its
website, MidWestOne.bank. MidWestOne Financial Group, Inc. trades
on the Nasdaq Global Select Market under the symbol “MOFG”.
Cautionary Note Regarding Forward-Looking
Statements
This release contains certain “forward-looking
statements” within the meaning of such term in the Private
Securities Litigation Reform Act of 1995. We and our
representatives may, from time to time, make written or oral
statements that are “forward-looking” and provide information other
than historical information. These statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results to be materially different from any results, levels
of activity, performance or achievements expressed or implied by
any forward-looking statement. These factors include, among other
things, the factors listed below. Forward-looking statements, which
may be based upon beliefs, expectations and assumptions of our
management and on information currently available to management,
are generally identifiable by the use of words such as “believe,”
“expect,” “anticipate,” “should,” “could,” “would,” “plans,”
“goals,” “intend,” “project,” “estimate,” “forecast,” “may” or
similar expressions. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results
to differ materially from those expressed in, or implied by, these
statements. Readers are cautioned not to place undue reliance on
any such forward-looking statements, which speak only as of the
date made. Additionally, we undertake no obligation to update any
statement in light of new information or future events, except as
required under federal securities law.
Our ability to predict results or the actual
effect of future plans or strategies is inherently uncertain.
Factors that could have an impact on our ability to achieve
operating results, growth plan goals and future prospects include,
but are not limited to, the following: (1) the risks of mergers or
branch sales (including with Iowa First Bancshares Corp. and Denver
Bankshares, Inc.), including, without limitation, the related time
and costs of implementing such transactions, integrating operations
as part of these transactions and possible failures to achieve
expected gains, revenue growth and/or expense savings from such
transactions; (2) credit quality deterioration, pronounced and
sustained reduction in real estate market values, or other
uncertainties, including the impact of inflationary pressures on
economic conditions and our business, resulting in an increase in
the allowance for credit losses, an increase in the credit loss
expense, and a reduction in net earnings; (3) the effects of recent
and potential additional increases in inflation and interest rates,
including on our net income and the value of our securities
portfolio; (4) changes in the economic environment, competition, or
other factors that may affect our ability to acquire loans or
influence the anticipated growth rate of loans and deposits and the
quality of the loan portfolio and loan and deposit pricing; (5)
fluctuations in the value of our investment securities; (6)
governmental monetary and fiscal policies; (7) changes in and
uncertainty related to benchmark interest rates used to price loans
and deposits; (8) legislative and regulatory changes, including
changes in banking, securities, trade, and tax laws and regulations
and their application by our regulators, including the new 1.0%
excise tax on stock buybacks by publicly traded companies and any
changes in response to the recent failures of other banks; (9) the
ability to attract and retain key executives and employees
experienced in banking and financial services; (10) the sufficiency
of the allowance for credit losses to absorb the amount of actual
losses inherent in our existing loan portfolio; (11) our ability to
adapt successfully to technological changes to compete effectively
in the marketplace; (12) credit risks and risks from concentrations
(by geographic area and by industry) within our loan portfolio;
(13) the effects of competition from other commercial banks,
thrifts, mortgage banking firms, consumer finance companies, credit
unions, securities brokerage firms, insurance companies, money
market and other mutual funds, financial technology companies, and
other financial institutions operating in our markets or elsewhere
or providing similar services; (14) the failure of assumptions
underlying the establishment of allowances for credit losses and
estimation of values of collateral and various financial assets and
liabilities; (15) volatility of rate-sensitive deposits; (16)
operational risks, including data processing system failures or
fraud; (17) asset/liability matching risks and liquidity risks;
(18) the costs, effects and outcomes of existing or future
litigation; (19) changes in general economic, political, or
industry conditions, nationally, internationally or in the
communities in which we conduct business, including the risk of a
recession; (20) changes in accounting policies and practices, as
may be adopted by state and federal regulatory agencies and the
Financial Accounting Standards Board; (21) war or terrorist
activities, including the Israeli-Palestinian conflict and the
Russian invasion of Ukraine, widespread disease or pandemic, or
other adverse external events, which may cause deterioration in the
economy or cause instability in credit markets; (22) the occurrence
of fraudulent activity, breaches, or failures of our information
security controls or cyber-security related incidents, including as
a result of sophisticated attacks using artificial intelligence and
similar tools; (23) the imposition of tariffs or other domestic or
international governmental policies impacting the value of the
agricultural or other products of our borrowers; (24) effects of
the ongoing COVID-19 pandemic, including its effects on the
economic environment, our customers, employees and supply chain;
(25) the concentration of large deposits from certain clients who
have balances above current FDIC insurance limits; (26) the effects
of recent developments and events in the financial services
industry, including the large-scale deposit withdrawals over a
short period of time at other banks that resulted in failure of
those institutions; and (27) other risk factors detailed from time
to time in Securities and Exchange Commission filings made by the
Company.
MIDWESTONE FINANCIAL
GROUP, INC. AND SUBSIDIARIES FIVE QUARTER
CONSOLIDATED BALANCE SHEETS
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(In thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
71,015 |
|
|
$ |
75,955 |
|
|
$ |
63,945 |
|
|
$ |
83,990 |
|
|
$ |
77,513 |
|
Interest earning deposits in
banks |
|
3,773 |
|
|
|
68,603 |
|
|
|
5,273 |
|
|
|
2,445 |
|
|
|
1,001 |
|
Total cash and cash equivalents |
|
74,788 |
|
|
|
144,558 |
|
|
|
69,218 |
|
|
|
86,435 |
|
|
|
78,514 |
|
Debt securities available for
sale at fair value |
|
872,770 |
|
|
|
903,520 |
|
|
|
954,074 |
|
|
|
1,153,547 |
|
|
|
1,153,304 |
|
Held to maturity securities at
amortized cost |
|
1,085,751 |
|
|
|
1,099,569 |
|
|
|
1,117,709 |
|
|
|
1,129,421 |
|
|
|
1,146,583 |
|
Total securities |
|
1,958,521 |
|
|
|
2,003,089 |
|
|
|
2,071,783 |
|
|
|
2,282,968 |
|
|
|
2,299,887 |
|
Loans held for sale |
|
2,528 |
|
|
|
2,821 |
|
|
|
2,553 |
|
|
|
612 |
|
|
|
2,320 |
|
Gross loans held for
investment |
|
4,078,060 |
|
|
|
4,031,377 |
|
|
|
3,932,900 |
|
|
|
3,854,791 |
|
|
|
3,761,664 |
|
Unearned income, net |
|
(12,091 |
) |
|
|
(12,728 |
) |
|
|
(13,535 |
) |
|
|
(14,267 |
) |
|
|
(15,375 |
) |
Loans held for investment, net of unearned income |
|
4,065,969 |
|
|
|
4,018,649 |
|
|
|
3,919,365 |
|
|
|
3,840,524 |
|
|
|
3,746,289 |
|
Allowance for credit
losses |
|
(51,600 |
) |
|
|
(50,400 |
) |
|
|
(49,800 |
) |
|
|
(49,200 |
) |
|
|
(52,100 |
) |
Total loans held for investment, net |
|
4,014,369 |
|
|
|
3,968,249 |
|
|
|
3,869,565 |
|
|
|
3,791,324 |
|
|
|
3,694,189 |
|
Premises and equipment,
net |
|
85,589 |
|
|
|
85,831 |
|
|
|
86,208 |
|
|
|
87,125 |
|
|
|
87,732 |
|
Goodwill |
|
62,477 |
|
|
|
62,477 |
|
|
|
62,477 |
|
|
|
62,477 |
|
|
|
62,477 |
|
Other intangible assets,
net |
|
25,510 |
|
|
|
26,969 |
|
|
|
28,563 |
|
|
|
30,315 |
|
|
|
32,086 |
|
Foreclosed assets, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
103 |
|
|
|
103 |
|
Other assets |
|
244,036 |
|
|
|
227,495 |
|
|
|
219,585 |
|
|
|
236,517 |
|
|
|
233,753 |
|
Total assets |
$ |
6,467,818 |
|
|
$ |
6,521,489 |
|
|
$ |
6,409,952 |
|
|
$ |
6,577,876 |
|
|
$ |
6,491,061 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Noninterest bearing
deposits |
$ |
924,213 |
|
|
$ |
897,923 |
|
|
$ |
989,469 |
|
|
$ |
1,053,450 |
|
|
$ |
1,139,694 |
|
Interest bearing deposits |
|
4,439,111 |
|
|
|
4,547,524 |
|
|
|
4,565,684 |
|
|
|
4,415,492 |
|
|
|
4,337,088 |
|
Total deposits |
|
5,363,324 |
|
|
|
5,445,447 |
|
|
|
5,555,153 |
|
|
|
5,468,942 |
|
|
|
5,476,782 |
|
Short-term borrowings |
|
373,956 |
|
|
|
362,054 |
|
|
|
143,981 |
|
|
|
391,873 |
|
|
|
304,536 |
|
Long-term debt |
|
124,526 |
|
|
|
125,752 |
|
|
|
137,981 |
|
|
|
139,210 |
|
|
|
154,190 |
|
Other liabilities |
|
100,601 |
|
|
|
86,895 |
|
|
|
72,187 |
|
|
|
85,058 |
|
|
|
83,324 |
|
Total liabilities |
|
5,962,407 |
|
|
|
6,020,148 |
|
|
|
5,909,302 |
|
|
|
6,085,083 |
|
|
|
6,018,832 |
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
Common stock |
|
16,581 |
|
|
|
16,581 |
|
|
|
16,581 |
|
|
|
16,581 |
|
|
|
16,581 |
|
Additional paid-in
capital |
|
301,889 |
|
|
|
301,424 |
|
|
|
300,966 |
|
|
|
302,085 |
|
|
|
301,418 |
|
Retained earnings |
|
295,862 |
|
|
|
290,548 |
|
|
|
286,767 |
|
|
|
289,289 |
|
|
|
276,998 |
|
Treasury stock |
|
(24,315 |
) |
|
|
(24,508 |
) |
|
|
(24,779 |
) |
|
|
(26,115 |
) |
|
|
(26,145 |
) |
Accumulated other
comprehensive loss |
|
(84,606 |
) |
|
|
(82,704 |
) |
|
|
(78,885 |
) |
|
|
(89,047 |
) |
|
|
(96,623 |
) |
Total shareholders' equity |
|
505,411 |
|
|
|
501,341 |
|
|
|
500,650 |
|
|
|
492,793 |
|
|
|
472,229 |
|
Total liabilities and shareholders' equity |
$ |
6,467,818 |
|
|
$ |
6,521,489 |
|
|
$ |
6,409,952 |
|
|
$ |
6,577,876 |
|
|
$ |
6,491,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDWESTONE FINANCIAL
GROUP, INC. AND SUBSIDIARIES FIVE QUARTER AND YEAR
TO DATE CONSOLIDATED STATEMENTS OF INCOME
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
September 30, |
|
September 30, |
(In thousands, except per share data) |
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
51,870 |
|
|
$ |
49,726 |
|
|
$ |
46,490 |
|
|
$ |
43,769 |
|
|
$ |
40,451 |
|
|
$ |
148,086 |
|
|
$ |
104,515 |
|
Taxable investment securities |
|
9,526 |
|
|
|
9,734 |
|
|
|
10,444 |
|
|
|
10,685 |
|
|
|
10,635 |
|
|
|
29,704 |
|
|
|
28,334 |
|
Tax-exempt investment securities |
|
1,802 |
|
|
|
1,822 |
|
|
|
2,127 |
|
|
|
2,303 |
|
|
|
2,326 |
|
|
|
5,751 |
|
|
|
7,076 |
|
Other |
|
374 |
|
|
|
68 |
|
|
|
244 |
|
|
|
— |
|
|
|
9 |
|
|
|
686 |
|
|
|
77 |
|
Total interest income |
|
63,572 |
|
|
|
61,350 |
|
|
|
59,305 |
|
|
|
56,757 |
|
|
|
53,421 |
|
|
|
184,227 |
|
|
|
140,002 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
23,128 |
|
|
|
20,117 |
|
|
|
15,319 |
|
|
|
9,127 |
|
|
|
5,035 |
|
|
|
58,564 |
|
|
|
11,118 |
|
Short-term borrowings |
|
3,719 |
|
|
|
2,118 |
|
|
|
1,786 |
|
|
|
1,955 |
|
|
|
767 |
|
|
|
7,623 |
|
|
|
1,115 |
|
Long-term debt |
|
2,150 |
|
|
|
2,153 |
|
|
|
2,124 |
|
|
|
2,111 |
|
|
|
1,886 |
|
|
|
6,427 |
|
|
|
4,975 |
|
Total interest expense |
|
28,997 |
|
|
|
24,388 |
|
|
|
19,229 |
|
|
|
13,193 |
|
|
|
7,688 |
|
|
|
72,614 |
|
|
|
17,208 |
|
Net interest income |
|
34,575 |
|
|
|
36,962 |
|
|
|
40,076 |
|
|
|
43,564 |
|
|
|
45,733 |
|
|
|
111,613 |
|
|
|
122,794 |
|
Credit loss expense |
|
1,551 |
|
|
|
1,597 |
|
|
|
933 |
|
|
|
572 |
|
|
|
638 |
|
|
|
4,081 |
|
|
|
3,920 |
|
Net interest income after credit loss expense |
|
33,024 |
|
|
|
35,365 |
|
|
|
39,143 |
|
|
|
42,992 |
|
|
|
45,095 |
|
|
|
107,532 |
|
|
|
118,874 |
|
Noninterest income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment services and trust activities |
|
3,004 |
|
|
|
3,119 |
|
|
|
2,933 |
|
|
|
2,666 |
|
|
|
2,876 |
|
|
|
9,056 |
|
|
|
8,557 |
|
Service charges and fees |
|
2,146 |
|
|
|
2,047 |
|
|
|
2,008 |
|
|
|
2,028 |
|
|
|
2,075 |
|
|
|
6,201 |
|
|
|
5,449 |
|
Card revenue |
|
1,817 |
|
|
|
1,847 |
|
|
|
1,748 |
|
|
|
1,784 |
|
|
|
1,898 |
|
|
|
5,412 |
|
|
|
5,426 |
|
Loan revenue |
|
1,462 |
|
|
|
909 |
|
|
|
1,420 |
|
|
|
966 |
|
|
|
1,722 |
|
|
|
3,791 |
|
|
|
9,538 |
|
Bank-owned life insurance |
|
626 |
|
|
|
616 |
|
|
|
602 |
|
|
|
637 |
|
|
|
579 |
|
|
|
1,844 |
|
|
|
1,668 |
|
Investment securities (losses) gains, net |
|
79 |
|
|
|
(2 |
) |
|
|
(13,170 |
) |
|
|
(1 |
) |
|
|
(163 |
) |
|
|
(13,093 |
) |
|
|
272 |
|
Other |
|
727 |
|
|
|
210 |
|
|
|
413 |
|
|
|
2,860 |
|
|
|
3,601 |
|
|
|
1,350 |
|
|
|
5,669 |
|
Total noninterest income (loss) |
|
9,861 |
|
|
|
8,746 |
|
|
|
(4,046 |
) |
|
|
10,940 |
|
|
|
12,588 |
|
|
|
14,561 |
|
|
|
36,579 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
18,558 |
|
|
|
20,386 |
|
|
|
19,607 |
|
|
|
20,438 |
|
|
|
20,046 |
|
|
|
58,551 |
|
|
|
57,665 |
|
Occupancy expense of premises, net |
|
2,405 |
|
|
|
2,574 |
|
|
|
2,746 |
|
|
|
2,663 |
|
|
|
2,577 |
|
|
|
7,725 |
|
|
|
7,609 |
|
Equipment |
|
2,123 |
|
|
|
2,435 |
|
|
|
2,171 |
|
|
|
2,327 |
|
|
|
2,358 |
|
|
|
6,729 |
|
|
|
6,366 |
|
Legal and professional |
|
1,678 |
|
|
|
1,682 |
|
|
|
1,736 |
|
|
|
1,846 |
|
|
|
2,012 |
|
|
|
5,096 |
|
|
|
6,800 |
|
Data processing |
|
1,504 |
|
|
|
1,521 |
|
|
|
1,363 |
|
|
|
1,375 |
|
|
|
1,731 |
|
|
|
4,388 |
|
|
|
4,199 |
|
Marketing |
|
782 |
|
|
|
1,142 |
|
|
|
986 |
|
|
|
947 |
|
|
|
1,139 |
|
|
|
2,910 |
|
|
|
3,325 |
|
Amortization of intangibles |
|
1,460 |
|
|
|
1,594 |
|
|
|
1,752 |
|
|
|
1,770 |
|
|
|
1,789 |
|
|
|
4,806 |
|
|
|
4,299 |
|
FDIC insurance |
|
783 |
|
|
|
862 |
|
|
|
749 |
|
|
|
405 |
|
|
|
415 |
|
|
|
2,394 |
|
|
|
1,255 |
|
Communications |
|
206 |
|
|
|
260 |
|
|
|
261 |
|
|
|
285 |
|
|
|
302 |
|
|
|
727 |
|
|
|
840 |
|
Foreclosed assets, net |
|
2 |
|
|
|
(6 |
) |
|
|
(28 |
) |
|
|
48 |
|
|
|
42 |
|
|
|
(32 |
) |
|
|
(66 |
) |
Other |
|
2,043 |
|
|
|
2,469 |
|
|
|
1,976 |
|
|
|
2,336 |
|
|
|
2,212 |
|
|
|
6,488 |
|
|
|
6,056 |
|
Total noninterest expense |
|
31,544 |
|
|
|
34,919 |
|
|
|
33,319 |
|
|
|
34,440 |
|
|
|
34,623 |
|
|
|
99,782 |
|
|
|
98,348 |
|
Income before income tax expense |
|
11,341 |
|
|
|
9,192 |
|
|
|
1,778 |
|
|
|
19,492 |
|
|
|
23,060 |
|
|
|
22,311 |
|
|
|
57,105 |
|
Income tax expense |
|
2,203 |
|
|
|
1,598 |
|
|
|
381 |
|
|
|
3,490 |
|
|
|
4,743 |
|
|
|
4,182 |
|
|
|
12,272 |
|
Net income |
$ |
9,138 |
|
|
$ |
7,594 |
|
|
$ |
1,397 |
|
|
$ |
16,002 |
|
|
$ |
18,317 |
|
|
$ |
18,129 |
|
|
$ |
44,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
0.09 |
|
|
$ |
1.02 |
|
|
$ |
1.17 |
|
|
$ |
1.16 |
|
|
$ |
2.86 |
|
Diluted |
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
0.09 |
|
|
$ |
1.02 |
|
|
$ |
1.17 |
|
|
$ |
1.15 |
|
|
$ |
2.86 |
|
Weighted average basic common
shares outstanding |
|
15,689 |
|
|
|
15,680 |
|
|
|
15,650 |
|
|
|
15,624 |
|
|
|
15,623 |
|
|
|
15,673 |
|
|
|
15,658 |
|
Weighted average diluted
common shares outstanding |
|
15,711 |
|
|
|
15,689 |
|
|
|
15,691 |
|
|
|
15,693 |
|
|
|
15,654 |
|
|
|
15,696 |
|
|
|
15,686 |
|
Dividends paid per common
share |
$ |
0.2425 |
|
|
$ |
0.2425 |
|
|
$ |
0.2425 |
|
|
$ |
0.2375 |
|
|
$ |
0.2375 |
|
|
$ |
0.7275 |
|
|
$ |
0.7125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDWESTONE FINANCIAL
GROUP, INC. AND SUBSIDIARIES FINANCIAL
STATISTICS
|
As of or for the Three Months Ended |
|
As of or for the Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(Dollars in thousands, except per share
amounts) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Earnings: |
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
34,575 |
|
|
$ |
36,962 |
|
|
$ |
45,733 |
|
|
$ |
111,613 |
|
|
$ |
122,794 |
|
Noninterest income |
|
9,861 |
|
|
|
8,746 |
|
|
|
12,588 |
|
|
|
14,561 |
|
|
|
36,579 |
|
Total revenue, net of interest expense |
|
44,436 |
|
|
|
45,708 |
|
|
|
58,321 |
|
|
|
126,174 |
|
|
|
159,373 |
|
Credit loss expense |
|
1,551 |
|
|
|
1,597 |
|
|
|
638 |
|
|
|
4,081 |
|
|
|
3,920 |
|
Noninterest expense |
|
31,544 |
|
|
|
34,919 |
|
|
|
34,623 |
|
|
|
99,782 |
|
|
|
98,348 |
|
Income before income tax expense |
|
11,341 |
|
|
|
9,192 |
|
|
|
23,060 |
|
|
|
22,311 |
|
|
|
57,105 |
|
Income tax expense |
|
2,203 |
|
|
|
1,598 |
|
|
|
4,743 |
|
|
|
4,182 |
|
|
|
12,272 |
|
Net income |
$ |
9,138 |
|
|
$ |
7,594 |
|
|
$ |
18,317 |
|
|
$ |
18,129 |
|
|
$ |
44,833 |
|
Per Share
Data: |
|
|
|
|
|
|
|
|
|
Diluted earnings |
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
1.17 |
|
|
$ |
1.15 |
|
|
$ |
2.86 |
|
Book value |
|
32.21 |
|
|
|
31.96 |
|
|
|
30.23 |
|
|
|
32.21 |
|
|
|
30.23 |
|
Tangible book value(1) |
|
26.60 |
|
|
|
26.26 |
|
|
|
24.17 |
|
|
|
26.60 |
|
|
|
24.17 |
|
Ending Balance
Sheet: |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
6,467,818 |
|
|
$ |
6,521,489 |
|
|
$ |
6,491,061 |
|
|
$ |
6,467,818 |
|
|
$ |
6,491,061 |
|
Loans held for investment, net
of unearned income |
|
4,065,969 |
|
|
|
4,018,649 |
|
|
|
3,746,289 |
|
|
|
4,065,969 |
|
|
|
3,746,289 |
|
Total securities |
|
1,958,521 |
|
|
|
2,003,089 |
|
|
|
2,299,887 |
|
|
|
1,958,521 |
|
|
|
2,299,887 |
|
Total deposits |
|
5,363,324 |
|
|
|
5,445,447 |
|
|
|
5,476,782 |
|
|
|
5,363,324 |
|
|
|
5,476,782 |
|
Short-term borrowings |
|
373,956 |
|
|
|
362,054 |
|
|
|
304,536 |
|
|
|
373,956 |
|
|
|
304,536 |
|
Long-term debt |
|
124,526 |
|
|
|
125,752 |
|
|
|
154,190 |
|
|
|
124,526 |
|
|
|
154,190 |
|
Total shareholders'
equity |
|
505,411 |
|
|
|
501,341 |
|
|
|
472,229 |
|
|
|
505,411 |
|
|
|
472,229 |
|
Average Balance
Sheet: |
|
|
|
|
|
|
|
|
|
Average total assets |
$ |
6,452,815 |
|
|
$ |
6,465,810 |
|
|
$ |
6,457,647 |
|
|
$ |
6,480,636 |
|
|
$ |
6,152,390 |
|
Average total loans |
|
4,019,852 |
|
|
|
4,003,717 |
|
|
|
3,673,379 |
|
|
|
3,964,119 |
|
|
|
3,416,600 |
|
Average total deposits |
|
5,379,871 |
|
|
|
5,454,517 |
|
|
|
5,507,482 |
|
|
|
5,459,749 |
|
|
|
5,246,183 |
|
Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Return on average assets |
|
0.56 |
% |
|
|
0.47 |
% |
|
|
1.13 |
% |
|
|
0.37 |
% |
|
|
0.97 |
% |
Return on average equity |
|
7.14 |
% |
|
|
6.03 |
% |
|
|
14.56 |
% |
|
|
4.81 |
% |
|
|
11.81 |
% |
Return on average tangible
equity(1) |
|
9.68 |
% |
|
|
8.50 |
% |
|
|
19.32 |
% |
|
|
7.03 |
% |
|
|
15.28 |
% |
Efficiency ratio(1) |
|
66.06 |
% |
|
|
71.13 |
% |
|
|
53.67 |
% |
|
|
66.40 |
% |
|
|
56.70 |
% |
Net interest margin, tax
equivalent(1) |
|
2.35 |
% |
|
|
2.52 |
% |
|
|
3.08 |
% |
|
|
2.54 |
% |
|
|
2.92 |
% |
Loans to deposits ratio |
|
75.81 |
% |
|
|
73.80 |
% |
|
|
68.40 |
% |
|
|
75.81 |
% |
|
|
68.40 |
% |
Common equity ratio |
|
7.81 |
% |
|
|
7.69 |
% |
|
|
7.28 |
% |
|
|
7.81 |
% |
|
|
7.28 |
% |
Tangible common equity
ratio(1) |
|
6.54 |
% |
|
|
6.40 |
% |
|
|
5.90 |
% |
|
|
6.54 |
% |
|
|
5.90 |
% |
Credit Risk
Profile: |
|
|
|
|
|
|
|
|
|
Total nonperforming loans |
$ |
28,987 |
|
|
$ |
14,448 |
|
|
$ |
25,963 |
|
|
$ |
28,987 |
|
|
$ |
25,963 |
|
Nonperforming loans ratio |
|
0.71 |
% |
|
|
0.36 |
% |
|
|
0.69 |
% |
|
|
0.71 |
% |
|
|
0.69 |
% |
Total nonperforming
assets |
$ |
28,987 |
|
|
$ |
14,448 |
|
|
$ |
26,066 |
|
|
$ |
28,987 |
|
|
$ |
26,066 |
|
Nonperforming assets
ratio |
|
0.45 |
% |
|
|
0.22 |
% |
|
|
0.40 |
% |
|
|
0.45 |
% |
|
|
0.40 |
% |
Net charge-offs |
$ |
451 |
|
|
$ |
897 |
|
|
$ |
588 |
|
|
$ |
1,681 |
|
|
$ |
3,091 |
|
Net charge-off ratio |
|
0.04 |
% |
|
|
0.09 |
% |
|
|
0.06 |
% |
|
|
0.06 |
% |
|
|
0.12 |
% |
Allowance for credit
losses |
$ |
51,600 |
|
|
$ |
50,400 |
|
|
$ |
52,100 |
|
|
$ |
51,600 |
|
|
$ |
52,100 |
|
Allowance for credit losses
ratio |
|
1.27 |
% |
|
|
1.25 |
% |
|
|
1.39 |
% |
|
|
1.27 |
% |
|
|
1.39 |
% |
Allowance for credit losses to
nonaccrual ratio |
|
178.63 |
% |
|
|
355.03 |
% |
|
|
208.18 |
% |
|
|
178.63 |
% |
|
|
208.18 |
% |
|
|
|
|
|
|
|
|
|
|
(1) Non-GAAP measure. See the Non-GAAP Measures section
for a reconciliation to the most directly comparable GAAP
measure.
MIDWESTONE FINANCIAL
GROUP, INC. AND SUBSIDIARIESAVERAGE BALANCE SHEET
AND YIELD ANALYSIS
|
Three Months Ended |
|
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
(Dollars in
thousands) |
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
|
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
|
Average Balance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees (1)(2)(3) |
$ |
4,019,852 |
|
$ |
52,605 |
|
5.19 |
% |
|
$ |
4,003,717 |
|
$ |
50,439 |
|
5.05 |
% |
|
$ |
3,673,379 |
|
$ |
41,124 |
|
4.44 |
% |
Taxable investment
securities |
|
1,637,259 |
|
|
9,526 |
|
2.31 |
% |
|
|
1,698,003 |
|
|
9,734 |
|
2.30 |
% |
|
|
1,939,517 |
|
|
10,635 |
|
2.18 |
% |
Tax-exempt investment
securities (2)(4) |
|
341,330 |
|
|
2,234 |
|
2.60 |
% |
|
|
345,934 |
|
|
2,253 |
|
2.61 |
% |
|
|
431,898 |
|
|
2,922 |
|
2.68 |
% |
Total securities held for investment(2) |
|
1,978,589 |
|
|
11,760 |
|
2.36 |
% |
|
|
2,043,937 |
|
|
11,987 |
|
2.35 |
% |
|
|
2,371,415 |
|
|
13,557 |
|
2.27 |
% |
Other |
|
34,195 |
|
|
374 |
|
4.34 |
% |
|
|
9,078 |
|
|
68 |
|
3.00 |
% |
|
|
6,070 |
|
|
9 |
|
0.59 |
% |
Total interest earning assets(2) |
$ |
6,032,636 |
|
$ |
64,739 |
|
4.26 |
% |
|
$ |
6,056,732 |
|
$ |
62,494 |
|
4.14 |
% |
|
$ |
6,050,864 |
|
$ |
54,690 |
|
3.59 |
% |
Other assets |
|
420,179 |
|
|
|
|
|
|
409,078 |
|
|
|
|
|
|
406,783 |
|
|
|
|
Total assets |
$ |
6,452,815 |
|
|
|
|
|
$ |
6,465,810 |
|
|
|
|
|
$ |
6,457,647 |
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking
deposits |
$ |
1,354,597 |
|
$ |
2,179 |
|
0.64 |
% |
|
$ |
1,420,741 |
|
$ |
1,971 |
|
0.56 |
% |
|
$ |
1,725,000 |
|
$ |
1,463 |
|
0.34 |
% |
Money market deposits |
|
1,112,149 |
|
|
7,402 |
|
2.64 |
% |
|
|
999,436 |
|
|
5,299 |
|
2.13 |
% |
|
|
1,016,005 |
|
|
1,268 |
|
0.50 |
% |
Savings deposits |
|
603,628 |
|
|
749 |
|
0.49 |
% |
|
|
603,905 |
|
|
288 |
|
0.19 |
% |
|
|
710,836 |
|
|
297 |
|
0.17 |
% |
Time deposits |
|
1,403,504 |
|
|
12,798 |
|
3.62 |
% |
|
|
1,490,332 |
|
|
12,559 |
|
3.38 |
% |
|
|
913,307 |
|
|
2,007 |
|
0.87 |
% |
Total interest bearing deposits |
|
4,473,878 |
|
|
23,128 |
|
2.05 |
% |
|
|
4,514,414 |
|
|
20,117 |
|
1.79 |
% |
|
|
4,365,148 |
|
|
5,035 |
|
0.46 |
% |
Securities sold under
agreements to repurchase |
|
66,020 |
|
|
85 |
|
0.51 |
% |
|
|
159,583 |
|
|
423 |
|
1.06 |
% |
|
|
144,628 |
|
|
228 |
|
0.63 |
% |
Other short-term
borrowings |
|
277,713 |
|
|
3,634 |
|
5.19 |
% |
|
|
132,495 |
|
|
1,695 |
|
5.13 |
% |
|
|
83,086 |
|
|
539 |
|
2.57 |
% |
Short-term borrowings |
|
343,733 |
|
|
3,719 |
|
4.29 |
% |
|
|
292,078 |
|
|
2,118 |
|
2.91 |
% |
|
|
227,714 |
|
|
767 |
|
1.34 |
% |
Long-term debt |
|
125,737 |
|
|
2,150 |
|
6.78 |
% |
|
|
135,329 |
|
|
2,153 |
|
6.38 |
% |
|
|
159,125 |
|
|
1,886 |
|
4.70 |
% |
Total borrowed funds |
|
469,470 |
|
|
5,869 |
|
4.96 |
% |
|
|
427,407 |
|
|
4,271 |
|
4.01 |
% |
|
|
386,839 |
|
|
2,653 |
|
2.72 |
% |
Total interest bearing liabilities |
$ |
4,943,348 |
|
$ |
28,997 |
|
2.33 |
% |
|
$ |
4,941,821 |
|
$ |
24,388 |
|
1.98 |
% |
|
$ |
4,751,987 |
|
$ |
7,688 |
|
0.64 |
% |
Noninterest bearing
deposits |
|
905,993 |
|
|
|
|
|
|
940,103 |
|
|
|
|
|
|
1,142,334 |
|
|
|
|
Other liabilities |
|
95,408 |
|
|
|
|
|
|
78,898 |
|
|
|
|
|
|
64,063 |
|
|
|
|
Shareholders’ equity |
|
508,066 |
|
|
|
|
|
|
504,988 |
|
|
|
|
|
|
499,263 |
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
6,452,815 |
|
|
|
|
|
$ |
6,465,810 |
|
|
|
|
|
$ |
6,457,647 |
|
|
|
|
Net interest income(2) |
|
|
$ |
35,742 |
|
|
|
|
|
$ |
38,106 |
|
|
|
|
|
$ |
47,002 |
|
|
Net interest spread(2) |
|
|
|
|
1.93 |
% |
|
|
|
|
|
2.16 |
% |
|
|
|
|
|
2.95 |
% |
Net interest margin(2) |
|
|
|
|
2.35 |
% |
|
|
|
|
|
2.52 |
% |
|
|
|
|
|
3.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits(5) |
$ |
5,379,871 |
|
$ |
23,128 |
|
1.71 |
% |
|
$ |
5,454,517 |
|
$ |
20,117 |
|
1.48 |
% |
|
$ |
5,507,482 |
|
$ |
5,035 |
|
0.36 |
% |
Cost of funds(6) |
|
|
|
|
1.97 |
% |
|
|
|
|
|
1.66 |
% |
|
|
|
|
|
0.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average balance includes nonaccrual loans.(2) Tax
equivalent. The federal statutory tax rate utilized was 21%.(3)
Interest income includes net loan fees, loan purchase discount
accretion and tax equivalent adjustments. Net loan fees were $141
thousand, $79 thousand, and $35 thousand for the three months ended
September 30, 2023, June 30, 2023, and September 30,
2022, respectively. Loan purchase discount accretion was $791
thousand, $1.0 million, and $2.0 million for the three months ended
September 30, 2023, June 30, 2023, and September 30,
2022, respectively. Tax equivalent adjustments were $735 thousand,
$713 thousand, and $673 thousand for the three months ended
September 30, 2023, June 30, 2023, and September 30,
2022, respectively. The federal statutory tax rate utilized was
21%.(4) Interest income includes tax equivalent adjustments of $432
thousand, $431 thousand, and $596 thousand for the three months
ended September 30, 2023, June 30, 2023, and
September 30, 2022, respectively. The federal statutory tax
rate utilized was 21%.(5) Total deposits is the sum of total
interest-bearing deposits and noninterest bearing deposits. The
cost of total deposits is calculated as annualized interest expense
on deposits divided by average total deposits.(6) Cost of funds is
calculated as annualized total interest expense divided by the sum
of average total deposits and borrowed funds.
MIDWESTONE FINANCIAL
GROUP, INC. AND SUBSIDIARIESAVERAGE BALANCE SHEET
AND YIELD ANALYSIS
|
Nine Months Ended |
|
September 30, 2023 |
|
September 30, 2022 |
(Dollars in
thousands) |
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
|
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees (1)(2)(3) |
$ |
3,964,119 |
|
|
$ |
150,250 |
|
|
|
5.07 |
% |
|
$ |
3,416,600 |
|
|
$ |
106,297 |
|
|
|
4.16 |
% |
Taxable investment
securities |
|
1,714,912 |
|
|
|
29,704 |
|
|
|
2.32 |
% |
|
|
1,899,907 |
|
|
|
28,334 |
|
|
|
1.99 |
% |
Tax-exempt investment
securities (2)(4) |
|
361,254 |
|
|
|
7,136 |
|
|
|
2.64 |
% |
|
|
440,542 |
|
|
|
8,895 |
|
|
|
2.70 |
% |
Total securities held for investment(2) |
|
2,076,166 |
|
|
|
36,840 |
|
|
|
2.37 |
% |
|
|
2,340,449 |
|
|
|
37,229 |
|
|
|
2.13 |
% |
Other |
|
22,741 |
|
|
|
686 |
|
|
|
4.03 |
% |
|
|
25,972 |
|
|
|
77 |
|
|
|
0.40 |
% |
Total interest earning assets(2) |
$ |
6,063,026 |
|
|
$ |
187,776 |
|
|
|
4.14 |
% |
|
$ |
5,783,021 |
|
|
$ |
143,603 |
|
|
|
3.32 |
% |
Other assets |
|
417,610 |
|
|
|
|
|
|
|
369,369 |
|
|
|
|
|
Total assets |
$ |
6,480,636 |
|
|
|
|
|
|
$ |
6,152,390 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Interest checking
deposits |
$ |
1,429,804 |
|
|
$ |
5,999 |
|
|
|
0.56 |
% |
|
$ |
1,642,849 |
|
|
$ |
3,713 |
|
|
|
0.30 |
% |
Money market deposits |
|
1,014,708 |
|
|
|
15,970 |
|
|
|
2.10 |
% |
|
|
991,338 |
|
|
|
2,338 |
|
|
|
0.32 |
% |
Savings deposits |
|
620,011 |
|
|
|
1,309 |
|
|
|
0.28 |
% |
|
|
671,917 |
|
|
|
863 |
|
|
|
0.17 |
% |
Time deposits |
|
1,437,122 |
|
|
|
35,286 |
|
|
|
3.28 |
% |
|
|
877,923 |
|
|
|
4,204 |
|
|
|
0.64 |
% |
Total interest bearing deposits |
|
4,501,645 |
|
|
|
58,564 |
|
|
|
1.74 |
% |
|
|
4,184,027 |
|
|
|
11,118 |
|
|
|
0.36 |
% |
Securities sold under
agreements to repurchase |
|
123,512 |
|
|
|
958 |
|
|
|
1.04 |
% |
|
|
152,663 |
|
|
|
435 |
|
|
|
0.38 |
% |
Other short-term
borrowings |
|
174,448 |
|
|
|
6,665 |
|
|
|
5.11 |
% |
|
|
42,952 |
|
|
|
680 |
|
|
|
2.12 |
% |
Short-term borrowings |
|
297,960 |
|
|
|
7,623 |
|
|
|
3.42 |
% |
|
|
195,615 |
|
|
|
1,115 |
|
|
|
0.76 |
% |
Long-term debt |
|
133,375 |
|
|
|
6,427 |
|
|
|
6.44 |
% |
|
|
148,053 |
|
|
|
4,975 |
|
|
|
4.49 |
% |
Total borrowed funds |
|
431,335 |
|
|
|
14,050 |
|
|
|
4.36 |
% |
|
|
343,668 |
|
|
|
6,090 |
|
|
|
2.37 |
% |
Total interest bearing liabilities |
$ |
4,932,980 |
|
|
$ |
72,614 |
|
|
|
1.97 |
% |
|
$ |
4,527,695 |
|
|
$ |
17,208 |
|
|
|
0.51 |
% |
Noninterest bearing
deposits |
|
958,104 |
|
|
|
|
|
|
|
1,062,156 |
|
|
|
|
|
Other liabilities |
|
85,650 |
|
|
|
|
|
|
|
54,775 |
|
|
|
|
|
Shareholders’ equity |
|
503,902 |
|
|
|
|
|
|
|
507,764 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
6,480,636 |
|
|
|
|
|
|
$ |
6,152,390 |
|
|
|
|
|
Net interest income(2) |
|
|
$ |
115,162 |
|
|
|
|
|
|
$ |
126,395 |
|
|
|
Net interest spread(2) |
|
|
|
|
|
2.17 |
% |
|
|
|
|
|
|
2.81 |
% |
Net interest margin(2) |
|
|
|
|
|
2.54 |
% |
|
|
|
|
|
|
2.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits(5) |
$ |
5,459,749 |
|
|
$ |
58,564 |
|
|
|
1.43 |
% |
|
$ |
5,246,183 |
|
|
$ |
11,118 |
|
|
|
0.28 |
% |
Cost of funds(6) |
|
|
|
|
|
1.65 |
% |
|
|
|
|
|
|
0.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average balance includes nonaccrual loans.(2) Tax
equivalent. The federal statutory tax rate utilized was 21%.(3)
Interest income includes net loan fees, loan purchase discount
accretion and tax equivalent adjustments. Net loan fees were $315
thousand and $678 thousand for the nine months ended
September 30, 2023 and September 30, 2022, respectively.
Loan purchase discount accretion was $3.0 million and $3.3 million
for the nine months ended September 30, 2023 and
September 30, 2022, respectively. Tax equivalent adjustments
were $2.2 million and $1.8 million for the nine months
ended September 30, 2023 and September 30, 2022,
respectively. The federal statutory tax rate utilized was 21%.(4)
Interest income includes tax equivalent adjustments of
$1.4 million and $1.8 million for the nine months ended
September 30, 2023 and September 30, 2022, respectively.
The federal statutory tax rate utilized was 21%.(5) Total deposits
is the sum of total interest-bearing deposits and noninterest
bearing deposits. The cost of total deposits is calculated as
annualized interest expense on deposits divided by average total
deposits.(6) Cost of funds is calculated as annualized total
interest expense divided by the sum of average total deposits and
borrowed funds.
Non-GAAP Measures
This earnings release contains non-GAAP measures
for tangible common equity, tangible book value per share, tangible
common equity ratio, return on average tangible equity, net
interest margin (tax equivalent), core net interest margin, loan
yield (tax equivalent), core yield on loans, efficiency ratio, and
adjusted earnings. Management believes these measures provide
investors with useful information regarding the Company’s
profitability, financial condition and capital adequacy, consistent
with how management evaluates the Company’s financial performance.
The following tables provide a reconciliation of each non-GAAP
measure to the most comparable GAAP measure.
Tangible Common
Equity/Tangible Book Value per Share/Tangible Common Equity
Ratio |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(Dollars in thousands, except per share data) |
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
Total shareholders’
equity |
|
$ |
505,411 |
|
|
$ |
501,341 |
|
|
$ |
500,650 |
|
|
$ |
492,793 |
|
|
$ |
472,229 |
|
Intangible assets, net |
|
|
(87,987 |
) |
|
|
(89,446 |
) |
|
|
(91,040 |
) |
|
|
(92,792 |
) |
|
|
(94,563 |
) |
Tangible common equity |
|
$ |
417,424 |
|
|
$ |
411,895 |
|
|
$ |
409,610 |
|
|
$ |
400,001 |
|
|
$ |
377,666 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
6,467,818 |
|
|
$ |
6,521,489 |
|
|
$ |
6,409,952 |
|
|
$ |
6,577,876 |
|
|
$ |
6,491,061 |
|
Intangible assets, net |
|
|
(87,987 |
) |
|
|
(89,446 |
) |
|
|
(91,040 |
) |
|
|
(92,792 |
) |
|
|
(94,563 |
) |
Tangible assets |
|
$ |
6,379,831 |
|
|
$ |
6,432,043 |
|
|
$ |
6,318,912 |
|
|
$ |
6,485,084 |
|
|
$ |
6,396,498 |
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
32.21 |
|
|
$ |
31.96 |
|
|
$ |
31.94 |
|
|
$ |
31.54 |
|
|
$ |
30.23 |
|
Tangible book value per
share(1) |
|
$ |
26.60 |
|
|
$ |
26.26 |
|
|
$ |
26.13 |
|
|
$ |
25.60 |
|
|
$ |
24.17 |
|
Shares outstanding |
|
|
15,691,738 |
|
|
|
15,685,123 |
|
|
|
15,675,325 |
|
|
|
15,623,977 |
|
|
|
15,622,825 |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity ratio |
|
|
7.81 |
% |
|
|
7.69 |
% |
|
|
7.81 |
% |
|
|
7.49 |
% |
|
|
7.28 |
% |
Tangible common equity
ratio(2) |
|
|
6.54 |
% |
|
|
6.40 |
% |
|
|
6.48 |
% |
|
|
6.17 |
% |
|
|
5.90 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tangible common equity divided by shares outstanding.(2)
Tangible common equity divided by tangible assets.
|
|
Three Months Ended |
|
Nine Months Ended |
Return on Average
Tangible Equity |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
9,138 |
|
|
$ |
7,594 |
|
|
$ |
18,317 |
|
|
$ |
18,129 |
|
|
$ |
44,833 |
|
Intangible amortization, net
of tax(1) |
|
|
1,095 |
|
|
|
1,196 |
|
|
|
1,342 |
|
|
|
3,605 |
|
|
|
3,224 |
|
Tangible net income |
|
$ |
10,233 |
|
|
$ |
8,790 |
|
|
$ |
19,659 |
|
|
$ |
21,734 |
|
|
$ |
48,057 |
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders’
equity |
|
$ |
508,066 |
|
|
$ |
504,988 |
|
|
$ |
499,263 |
|
|
$ |
503,902 |
|
|
$ |
507,764 |
|
Average intangible assets,
net |
|
|
(88,699 |
) |
|
|
(90,258 |
) |
|
|
(95,499 |
) |
|
|
(90,308 |
) |
|
|
(87,318 |
) |
Average tangible equity |
|
$ |
419,367 |
|
|
$ |
414,730 |
|
|
$ |
403,764 |
|
|
$ |
413,594 |
|
|
$ |
420,446 |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average equity |
|
|
7.14 |
% |
|
|
6.03 |
% |
|
|
14.56 |
% |
|
|
4.81 |
% |
|
|
11.81 |
% |
Return on average tangible
equity(2) |
|
|
9.68 |
% |
|
|
8.50 |
% |
|
|
19.32 |
% |
|
|
7.03 |
% |
|
|
15.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The combined income tax rate utilized was 25%.(2) Annualized
tangible net income divided by average tangible equity.
Net Interest Margin,
Tax Equivalent/ |
|
Three Months Ended |
|
Nine Months Ended |
Core Net Interest
Margin |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net interest income |
|
$ |
34,575 |
|
|
$ |
36,962 |
|
|
$ |
45,733 |
|
|
$ |
111,613 |
|
|
$ |
122,794 |
|
Tax equivalent
adjustments: |
|
|
|
|
|
|
|
|
|
|
Loans(1) |
|
|
735 |
|
|
|
713 |
|
|
|
673 |
|
|
|
2,164 |
|
|
|
1,782 |
|
Securities(1) |
|
|
432 |
|
|
|
431 |
|
|
|
596 |
|
|
|
1,385 |
|
|
|
1,819 |
|
Net interest income, tax equivalent |
|
$ |
35,742 |
|
|
$ |
38,106 |
|
|
$ |
47,002 |
|
|
$ |
115,162 |
|
|
$ |
126,395 |
|
Loan purchase discount
accretion |
|
|
(791 |
) |
|
|
(984 |
) |
|
|
(2,015 |
) |
|
|
(2,964 |
) |
|
|
(3,275 |
) |
Core net interest income |
|
$ |
34,951 |
|
|
$ |
37,122 |
|
|
$ |
44,987 |
|
|
$ |
112,198 |
|
|
$ |
123,120 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
|
2.27 |
% |
|
|
2.45 |
% |
|
|
3.00 |
% |
|
|
2.46 |
% |
|
|
2.84 |
% |
Net interest margin, tax
equivalent(2) |
|
|
2.35 |
% |
|
|
2.52 |
% |
|
|
3.08 |
% |
|
|
2.54 |
% |
|
|
2.92 |
% |
Core net interest
margin(3) |
|
|
2.30 |
% |
|
|
2.46 |
% |
|
|
2.95 |
% |
|
|
2.47 |
% |
|
|
2.85 |
% |
Average interest earning
assets |
|
$ |
6,032,636 |
|
|
$ |
6,056,732 |
|
|
$ |
6,050,864 |
|
|
$ |
6,063,026 |
|
|
$ |
5,783,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The federal statutory tax rate utilized was 21%.(2)
Annualized tax equivalent net interest income divided by average
interest earning assets.(3) Annualized core net interest income
divided by average interest earning assets.
|
|
Three Months Ended |
|
Nine Months Ended |
Loan Yield, Tax
Equivalent / Core Yield on Loans |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Loan interest income, including fees |
|
$ |
51,870 |
|
|
$ |
49,726 |
|
|
$ |
40,451 |
|
|
$ |
148,086 |
|
|
$ |
104,515 |
|
Tax equivalent
adjustment(1) |
|
|
735 |
|
|
|
713 |
|
|
|
673 |
|
|
|
2,164 |
|
|
|
1,782 |
|
Tax equivalent loan interest income |
|
$ |
52,605 |
|
|
$ |
50,439 |
|
|
$ |
41,124 |
|
|
$ |
150,250 |
|
|
$ |
106,297 |
|
Loan purchase discount
accretion |
|
|
(791 |
) |
|
|
(984 |
) |
|
|
(2,015 |
) |
|
|
(2,964 |
) |
|
|
(3,275 |
) |
Core loan interest income |
|
$ |
51,814 |
|
|
$ |
49,455 |
|
|
$ |
39,109 |
|
|
$ |
147,286 |
|
|
$ |
103,022 |
|
|
|
|
|
|
|
|
|
|
|
|
Yield on loans |
|
|
5.12 |
% |
|
|
4.98 |
% |
|
|
4.37 |
% |
|
|
4.99 |
% |
|
|
4.09 |
% |
Yield on loans, tax
equivalent(2) |
|
|
5.19 |
% |
|
|
5.05 |
% |
|
|
4.44 |
% |
|
|
5.07 |
% |
|
|
4.16 |
% |
Core yield on loans(3) |
|
|
5.11 |
% |
|
|
4.95 |
% |
|
|
4.22 |
% |
|
|
4.97 |
% |
|
|
4.03 |
% |
Average loans |
|
$ |
4,019,852 |
|
|
$ |
4,003,717 |
|
|
$ |
3,673,379 |
|
|
$ |
3,964,119 |
|
|
$ |
3,416,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The federal statutory tax rate utilized was 21%.(2)
Annualized tax equivalent loan interest income divided by average
loans.(3) Annualized core loan interest income divided by average
loans.
|
|
Three Months Ended |
|
Nine Months Ended |
Efficiency
Ratio |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(Dollars in thousands) |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total noninterest expense |
|
$ |
31,544 |
|
|
$ |
34,919 |
|
|
$ |
34,623 |
|
|
$ |
99,782 |
|
|
$ |
98,348 |
|
Amortization of
intangibles |
|
|
(1,460 |
) |
|
|
(1,594 |
) |
|
|
(1,789 |
) |
|
|
(4,806 |
) |
|
|
(4,299 |
) |
Merger-related expenses |
|
|
(11 |
) |
|
|
— |
|
|
|
(763 |
) |
|
|
(147 |
) |
|
|
(1,792 |
) |
Noninterest expense used for efficiency ratio |
|
$ |
30,073 |
|
|
$ |
33,325 |
|
|
$ |
32,071 |
|
|
$ |
94,829 |
|
|
$ |
92,257 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income, tax
equivalent(1) |
|
$ |
35,742 |
|
|
$ |
38,106 |
|
|
$ |
47,002 |
|
|
$ |
115,162 |
|
|
$ |
126,395 |
|
Plus: Noninterest income |
|
|
9,861 |
|
|
|
8,746 |
|
|
|
12,588 |
|
|
|
14,561 |
|
|
|
36,579 |
|
Less: Investment securities
(losses) gains, net |
|
|
79 |
|
|
|
(2 |
) |
|
|
(163 |
) |
|
|
(13,093 |
) |
|
|
272 |
|
Net revenues used for efficiency ratio |
|
$ |
45,524 |
|
|
$ |
46,854 |
|
|
$ |
59,753 |
|
|
$ |
142,816 |
|
|
$ |
162,702 |
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (2) |
|
|
66.06 |
% |
|
|
71.13 |
% |
|
|
53.67 |
% |
|
|
66.40 |
% |
|
|
56.70 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The federal statutory tax rate utilized was 21%.(2)
Noninterest expense adjusted for amortization of intangibles and
merger-related expenses divided by the sum of tax equivalent net
interest income, noninterest income and net investment securities
gains.
|
|
Three Months Ended |
|
Nine Months Ended |
Adjusted
Earnings |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(Dollars in thousands, except per share data) |
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
9,138 |
|
|
$ |
7,594 |
|
|
$ |
18,317 |
|
|
$ |
18,129 |
|
|
$ |
44,833 |
|
After tax loss on sale of debt
securities(1) |
|
|
— |
|
|
|
— |
|
|
|
125 |
|
|
|
9,837 |
|
|
|
— |
|
Adjusted earnings |
|
$ |
9,138 |
|
|
$ |
7,594 |
|
|
$ |
18,442 |
|
|
$ |
27,966 |
|
|
$ |
44,833 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
common shares outstanding |
|
|
15,711 |
|
|
|
15,689 |
|
|
|
15,654 |
|
|
|
15,696 |
|
|
|
15,686 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
Earnings per common share - diluted |
|
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
1.17 |
|
|
$ |
1.15 |
|
|
$ |
2.86 |
|
Adjusted earnings per common share - diluted (2) |
|
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
1.18 |
|
|
$ |
1.78 |
|
|
$ |
2.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The income tax rate utilized was 25.3%.(2)
Adjusted earnings divided by weighted average diluted common shares
outstanding.
Category: Earnings
This news release may be downloaded from
https://www.midwestonefinancial.com/corporate-profile/default.aspx
Source: MidWestOne Financial Group, Inc.
Industry: Banks
Contact: |
|
|
|
Charles N. Reeves |
|
Barry S. Ray |
|
Chief Executive Officer |
|
Chief
Financial Officer |
|
319.356.5800 |
|
319.356.5800 |
MidWestOne Financial (NASDAQ:MOFG)
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