MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or
the "Company”) today reported results for the fourth quarter and
full year of 2023.
Fourth Quarter
2023 Summary1
-
Net income of $2.7 million, or $0.17 per diluted common share,
including, on a pre-tax basis, securities net losses of $5.7
million, merger-related costs of $245 thousand, voluntary early
retirement program costs of $438 thousand, and a negative mortgage
servicing right valuation adjustment of $105 thousand.
-
Sold $115.2 million of securities in a balance sheet repositioning,
proceeds were utilized to purchase higher yielding debt securities
and reduce short-term borrowings.
-
Annualized loan growth of 6.1%.
-
Deposits, excluding brokered deposits, increased $31.4 million, or
0.6%, the second sequential quarter of deposit growth.
-
Nonperforming assets ratio remained stable at 0.47%; net charge-off
ratio was 0.20%.
-
Received all regulatory approvals for the previously announced
acquisition of Denver Bankshares, Inc, which is expected to close
early in the first quarter of 2024.
Full Year 2023
Summary1
-
Net income for the full year was $20.9 million, or $1.33 per
diluted common share.
-
Sold $346.9 million of securities to reposition the balance sheet,
proceeds were utilized to purchase higher yielding debt securities
and reduce short-term borrowings.
-
Net charge-off ratio declined 10 basis points ("bps") to
0.09%.
-
Tangible book value of $27.902, an increase of $2.30 or 9%.
Subsequent Events
-
On January 23, 2024, the Board of Directors declared a cash
dividend of $0.2425 per common share, payable on March 15,
2024 to shareholders of record as of the close of business on
March 1, 2024.
CEO Commentary
Charles (Chip) Reeves, Chief Executive Officer
of the Company, commented, “I'm pleased with our balance sheet
trends, as we delivered 6.1% annualized loan growth during the
fourth quarter of 2023, and continue to benefit from the expansion
of our major market banking teams. We also achieved core deposit
growth in the quarter, and remain cautiously optimistic that we can
grow our core deposit franchise through the year ahead. That said,
we remain liability sensitive, and funding cost pressure continued
to impact our margins and earnings through the fourth quarter,
though that pressure has been moderating.”
Mr. Reeves concluded, "More importantly, we are
well ahead of plan in executing our strategic initiatives designed
to improve our performance and position the Bank to deliver
financial results at the median of our peer group by the end of
2025. Highlights from 2023 include outstanding expense discipline
and re-allocation, our geographic repositioning with the Denver
Bankshares merger expected to close on January 31st, key new hires
in our Iowa Metro and Twin Cities markets, the hiring of a talented
executive to lead our wealth management business, and the expansion
of our specialty business lines with the recruitment of an
agri-business team. We are rapidly scaling in our core markets
while adding new business lines, which taken together, provide
visibility to improved growth and returns."
_________________________________________1
Fourth Quarter Summary compares to the third quarter of 2023 (the
"linked quarter") unless noted. Full Year 2023 Summary compares to
the full year 2022 unless noted. 2 Non-GAAP measure. See the
separate Non-GAAP Measures section for a reconciliation to the most
directly comparable GAAP measure.
|
|
As of or for the quarter ended |
|
Year Ended |
(Dollars
in thousands, except per share amounts and as noted) |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Financial
Results |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
36,421 |
|
|
$ |
44,436 |
|
|
$ |
54,504 |
|
|
$ |
162,595 |
|
|
$ |
213,877 |
|
Credit loss expense |
|
|
1,768 |
|
|
|
1,551 |
|
|
|
572 |
|
|
|
5,849 |
|
|
|
4,492 |
|
Noninterest expense |
|
|
32,131 |
|
|
|
31,544 |
|
|
|
34,440 |
|
|
|
131,913 |
|
|
|
132,788 |
|
Net
income |
|
|
2,730 |
|
|
|
9,138 |
|
|
|
16,002 |
|
|
|
20,859 |
|
|
|
60,835 |
|
Per Common Share |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
0.17 |
|
|
$ |
0.58 |
|
|
$ |
1.02 |
|
|
$ |
1.33 |
|
|
$ |
3.87 |
|
Book value |
|
|
33.41 |
|
|
|
32.21 |
|
|
|
31.54 |
|
|
|
33.41 |
|
|
|
31.54 |
|
Tangible book value(1) |
|
|
27.90 |
|
|
|
26.60 |
|
|
|
25.60 |
|
|
|
27.90 |
|
|
|
25.60 |
|
Balance Sheet & Credit Quality |
|
|
|
|
|
|
|
|
|
|
Loans In millions |
|
$ |
4,126.9 |
|
|
$ |
4,066.0 |
|
|
$ |
3,840.5 |
|
|
$ |
4,126.9 |
|
|
$ |
3,840.5 |
|
Investment securities In
millions |
|
|
1,870.3 |
|
|
|
1,958.5 |
|
|
|
2,283.0 |
|
|
|
1,870.3 |
|
|
|
2,283.0 |
|
Deposits In millions |
|
|
5,395.7 |
|
|
|
5,363.3 |
|
|
|
5,468.9 |
|
|
|
5,395.7 |
|
|
|
5,468.9 |
|
Net loan charge-offs In
millions |
|
|
2.1 |
|
|
|
0.5 |
|
|
|
3.5 |
|
|
|
3.7 |
|
|
|
6.6 |
|
Allowance for credit losses ratio |
|
|
1.25 |
% |
|
|
1.27 |
% |
|
|
1.28 |
% |
|
|
1.25 |
% |
|
|
1.28 |
% |
Selected Ratios |
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
0.17 |
% |
|
|
0.56 |
% |
|
|
0.97 |
% |
|
|
0.32 |
% |
|
|
0.97 |
% |
Net interest margin, tax
equivalent(1) |
|
|
2.22 |
% |
|
|
2.35 |
% |
|
|
2.93 |
% |
|
|
2.46 |
% |
|
|
2.92 |
% |
Return on average equity |
|
|
2.12 |
% |
|
|
7.14 |
% |
|
|
13.26 |
% |
|
|
4.12 |
% |
|
|
12.16 |
% |
Return on average tangible
equity(1) |
|
|
3.57 |
% |
|
|
9.68 |
% |
|
|
17.85 |
% |
|
|
6.14 |
% |
|
|
15.89 |
% |
Efficiency ratio(1) |
|
|
70.16 |
% |
|
|
66.06 |
% |
|
|
57.79 |
% |
|
|
67.28 |
% |
|
|
56.98 |
% |
(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 |
|
|
|
|
|
|
|
|
4Q23 vs |
|
4Q23 vs |
(Dollars in
thousands) |
|
4Q23 |
|
3Q23 |
|
4Q22 |
|
3Q23 |
|
4Q22 |
Net interest income |
|
$ |
32,559 |
|
$ |
34,575 |
|
$ |
43,564 |
|
(6 |
)% |
|
(25 |
)% |
Noninterest income |
|
|
3,862 |
|
|
9,861 |
|
|
10,940 |
|
(61 |
)% |
|
(65 |
)% |
Total revenue, net of interest expense |
|
$ |
36,421 |
|
$ |
44,436 |
|
$ |
54,504 |
|
(18 |
)% |
|
(33 |
)% |
|
|
|
Total revenue for the fourth quarter of 2023
decreased $8.0 million from the third quarter of 2023 and decreased
$18.1 million from the fourth quarter of 2022 due to lower net
interest income and noninterest income.
Net interest income of $32.6 million for the
fourth quarter of 2023 decreased $2.0 million from the third
quarter of 2023 primarily due to higher funding costs, partially
offset by lower volumes of interest bearing liabilities, higher
volumes of interest earning assets, and higher interest earning
asset yields. When compared to the fourth quarter of 2022, net
interest income decreased $11.0 million primarily due to 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 2.22% in the fourth quarter of 2023, compared to 2.35% in the
third quarter of 2023, as higher earning asset yields were more
than offset by increased funding costs. The cost of interest
bearing liabilities increased 32 bps, to 2.65%, due primarily to
interest bearing deposit costs of 2.39% and short-term borrowing
costs of 4.91%, which increased 34 bps and 62 bps, respectively
from the third quarter of 2023. Total interest earning assets yield
increased 12 bps from the third quarter of 2023, as a result of an
increase in loan yield of 15 bps. Our cycle-to-date interest
bearing deposit beta was 40%.
The tax equivalent net interest margin was 2.22%
in the fourth quarter of 2023, compared to 2.93% in the fourth
quarter of 2022, driven by higher funding costs and volumes and
lower interest earning asset volumes, partially offset by higher
interest earning asset yields. The cost of interest bearing
liabilities increased 157 bps to 2.65%, due to interest bearing
deposit costs of 2.39%, short-term borrowing costs of 4.91%, and
long-term debt costs of 6.79%, which increased 156 bps, 237 bps and
125 bps, respectively from the fourth quarter of 2022. Total
interest earning assets yield increased 59 bps from the fourth
quarter of 2022, primarily as a result of an increase in loan
yields of 68 bps.
Noninterest Income |
|
|
|
|
|
|
Change |
|
Change |
|
|
|
|
|
|
|
4Q23 vs |
|
4Q23 vs |
(In
thousands) |
4Q23 |
|
3Q23 |
|
4Q22 |
|
3Q23 |
|
4Q22 |
Investment services and trust activities |
$ |
3,193 |
|
|
$ |
3,004 |
|
$ |
2,666 |
|
|
6 |
% |
|
20 |
% |
Service charges and fees |
|
2,148 |
|
|
|
2,146 |
|
|
2,028 |
|
|
— |
% |
|
6 |
% |
Card revenue |
|
1,802 |
|
|
|
1,817 |
|
|
1,784 |
|
|
(1 |
)% |
|
1 |
% |
Loan revenue |
|
909 |
|
|
|
1,462 |
|
|
966 |
|
|
(38 |
)% |
|
(6 |
)% |
Bank-owned life insurance |
|
656 |
|
|
|
626 |
|
|
637 |
|
|
5 |
% |
|
3 |
% |
Investment securities gains
(losses), net |
|
(5,696 |
) |
|
|
79 |
|
|
(1 |
) |
|
n/m |
|
|
n/m |
|
Other |
|
850 |
|
|
|
727 |
|
|
2,860 |
|
|
17 |
% |
|
(70 |
)% |
Total noninterest income |
$ |
3,862 |
|
|
$ |
9,861 |
|
$ |
10,940 |
|
|
(61 |
)% |
|
(65 |
)% |
|
|
|
|
|
|
|
|
|
|
Results
are not meaningful (n/m) |
|
|
|
|
|
|
|
|
|
Noninterest income for the fourth quarter of
2023 decreased $6.0 million from the linked quarter, primarily due
to investment securities losses, net, of $5.7 million in the fourth
quarter of 2023, coupled with a $0.6 million unfavorable change in
loan revenue. Investment securities losses stemmed from a balance
sheet repositioning in the fourth quarter of 2023, in which $115.2
million of securities, yielding 2.26%, were sold and sale proceeds
of $109.5 million were utilized to purchase $63.3 million of
securities, yielding 5.62%, with the balance utilized to reduce
short-term borrowings. Loan revenue primarily reflected an
unfavorable quarter-over quarter change in the fair value of our
mortgage servicing rights of $0.4 million and a decline of $0.1
million in revenue from our mortgage origination business.
Noninterest income for the fourth quarter of
2023 decreased $7.1 million from the fourth quarter of 2022 due to
investment securities losses, net, of $5.7 million and a $2.0
million decline in other revenue, partially offset by an increase
of $0.5 million in investment services and trust activities
revenue. Investment securities losses stemmed from the balance
sheet repositioning previously described. Other revenue in the
fourth quarter of 2022 benefited from a nonrecurring bargain
purchase gain of $2.5 million recognized in connection with the
acquisition of Iowa First Bancshares Corp., which was partially
offset by an increase of $0.5 million in swap origination fee
income. The increase in investment services and trust activities
revenue was driven by higher assets under management.
EXPENSE REVIEW
Noninterest Expense |
|
|
|
|
|
|
Change |
|
Change |
|
|
|
|
|
|
|
4Q23 vs |
|
2Q23 vs |
(In
thousands) |
4Q23 |
|
3Q23 |
|
4Q22 |
|
3Q23 |
|
4Q22 |
Compensation and employee benefits |
$ |
17,859 |
|
$ |
18,558 |
|
$ |
20,438 |
|
(4 |
)% |
|
(13 |
)% |
Occupancy expense of premises,
net |
|
2,309 |
|
|
2,405 |
|
|
2,663 |
|
(4 |
)% |
|
(13 |
)% |
Equipment |
|
2,466 |
|
|
2,123 |
|
|
2,327 |
|
16 |
% |
|
6 |
% |
Legal and professional |
|
2,269 |
|
|
1,678 |
|
|
1,846 |
|
35 |
% |
|
23 |
% |
Data processing |
|
1,411 |
|
|
1,504 |
|
|
1,375 |
|
(6 |
)% |
|
3 |
% |
Marketing |
|
700 |
|
|
782 |
|
|
947 |
|
(10 |
)% |
|
(26 |
)% |
Amortization of
intangibles |
|
1,441 |
|
|
1,460 |
|
|
1,770 |
|
(1 |
)% |
|
(19 |
)% |
FDIC insurance |
|
900 |
|
|
783 |
|
|
405 |
|
15 |
% |
|
122 |
% |
Communications |
|
183 |
|
|
206 |
|
|
285 |
|
(11 |
)% |
|
(36 |
)% |
Foreclosed assets, net |
|
45 |
|
|
2 |
|
|
48 |
|
2150 |
% |
|
(6 |
)% |
Other |
|
2,548 |
|
|
2,043 |
|
|
2,336 |
|
25 |
% |
|
9 |
% |
Total noninterest expense |
$ |
32,131 |
|
$ |
31,544 |
|
$ |
34,440 |
|
2 |
% |
|
(7 |
)% |
Merger-related Expenses |
|
|
|
|
|
|
|
|
|
|
|
(In
thousands) |
4Q23 |
|
3Q23 |
|
4Q22 |
Compensation and employee benefits |
$ |
— |
|
$ |
— |
|
$ |
189 |
Equipment |
|
— |
|
|
— |
|
|
4 |
Legal and professional |
|
180 |
|
|
11 |
|
|
54 |
Data processing |
|
— |
|
|
— |
|
|
131 |
Marketing |
|
38 |
|
|
— |
|
|
2 |
Other |
|
27 |
|
|
— |
|
|
29 |
Total merger-related expenses |
$ |
245 |
|
$ |
11 |
|
$ |
409 |
Noninterest expense for the fourth quarter of
2023 increased $0.6 million from the linked quarter primarily as a
result of increases of $0.6 million and $0.5 million in legal and
professional and other, respectively. The largest offset to
increases in noninterest expense was a decline of $0.7 million in
compensation and employee benefits. The increase in legal and
professional expenses stemmed primarily from higher executive
recruitment and merger-related expenses. The increase in other
noninterest expense was driven by various changes, including
increases in loan expenses, travel, meals and entertainment, and
operating losses. The largest driver in the decrease in
compensation and employee benefits was a reduction in incentive and
commission expense.
Noninterest expense for the fourth quarter of
2023 decreased $2.3 million from the fourth quarter of 2022 due
primarily to a $2.6 million decline in compensation and employee
benefits, which reflected a $1.6 million reduction in incentives
and commissions, and a $0.6 million decline in employee benefits.
The $0.3 million decrease in occupancy expense reflected a
write-down of assets held for sale in the fourth quarter of 2022,
which did not recur in the fourth quarter of 2023. Partially
offsetting the decreases in noninterest expense was an increase of
$0.5 million in FDIC insurance expense and an increase of $0.4
million in legal and professional expense, which stemmed primarily
from higher recruitment and merger-related expenses.
The Company recognized a tax benefit in the
fourth quarter of 2023 to reduce the full-year 2023 effective
income tax rate to 16.0%, as compared to 20.6% in the prior year.
The decrease in the 2023 annual effective income tax rate reflected
lower taxable income and a larger benefit from tax exempt
investment income. The effective income tax rate for 2024 is
expected to be 20-22%.
BALANCE SHEET REVIEW
Total assets were $6.43 billion at
December 31, 2023, compared to $6.47 billion at
September 30, 2023 and $6.58 billion at December 31,
2022. The decrease from September 30, 2023 was primarily
driven by lower securities balances as a result of the balance
sheet repositioning, partially offset by higher loan balances.
Compared to December 31, 2022, the decrease was primarily due
to lower securities balances resulting from balance sheet
repositioning in the first and fourth quarters of 2023, partially
offset by higher loan balances.
Loans Held for Investment |
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|
(Dollars in
thousands) |
Balance |
|
% ofTotal |
|
Balance |
|
% ofTotal |
|
Balance |
|
% ofTotal |
|
Commercial and industrial |
$ |
1,075,003 |
|
26.0 |
% |
$ |
1,078,773 |
|
26.5 |
% |
$ |
1,055,162 |
|
27.5 |
% |
Agricultural |
|
118,414 |
|
2.9 |
|
|
111,950 |
|
2.8 |
|
|
115,320 |
|
3.0 |
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
Construction and development |
|
323,195 |
|
7.8 |
|
|
331,868 |
|
8.2 |
|
|
270,991 |
|
7.1 |
|
Farmland |
|
184,955 |
|
4.5 |
|
|
182,621 |
|
4.5 |
|
|
183,913 |
|
4.8 |
|
Multifamily |
|
383,178 |
|
9.3 |
|
|
337,509 |
|
8.3 |
|
|
252,129 |
|
6.6 |
|
Other |
|
1,333,982 |
|
32.4 |
|
|
1,324,019 |
|
32.5 |
|
|
1,272,985 |
|
33.1 |
|
Total commercial real estate |
|
2,225,310 |
|
54.0 |
|
|
2,176,017 |
|
53.5 |
|
|
1,980,018 |
|
51.6 |
|
Residential real estate |
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family first liens |
|
459,798 |
|
11.1 |
|
|
456,771 |
|
11.2 |
|
|
451,210 |
|
11.7 |
|
One-to-four family junior liens |
|
180,639 |
|
4.4 |
|
|
173,275 |
|
4.3 |
|
|
163,218 |
|
4.2 |
|
Total residential real estate |
|
640,437 |
|
15.5 |
|
|
630,046 |
|
15.5 |
|
|
614,428 |
|
15.9 |
|
Consumer |
|
67,783 |
|
1.6 |
|
|
69,183 |
|
1.7 |
|
|
75,596 |
|
2.0 |
|
Loans held for investment, net of unearned income |
$ |
4,126,947 |
|
100.0 |
% |
$ |
4,065,969 |
|
100.0 |
% |
$ |
3,840,524 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commitments to extend credit |
$ |
1,210,796 |
|
|
|
$ |
1,251,345 |
|
|
|
$ |
1,190,607 |
|
|
|
Loans held for investment, net of unearned
income, increased $61.0 million, or 1.5%, to $4.13 billion from
$4.07 billion at September 30, 2023 and $286.4 million, or
7.5%, from December 31, 2022. This increase from the third
quarter of 2023 was driven by new loan production in the fourth
quarter of 2023 and higher line of credit usage. The increase from
the fourth quarter of 2022 was due to new loan production.
Investment Securities |
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|
(Dollars in
thousands) |
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Available for sale |
$ |
795,134 |
|
42.5 |
% |
$ |
872,770 |
|
44.6 |
% |
$ |
1,153,547 |
|
50.5 |
% |
Held to maturity |
|
1,075,190 |
|
57.5 |
% |
|
1,085,751 |
|
55.4 |
% |
|
1,129,421 |
|
49.5 |
% |
Total investment securities |
$ |
1,870,324 |
|
|
|
$ |
1,958,521 |
|
|
|
$ |
2,282,968 |
|
|
|
Investment securities at December 31, 2023
were $1.87 billion, decreasing $88.2 million from
September 30, 2023 and $412.6 million from December 31,
2022. The decrease from the third quarter of 2023 was primarily due
to the balance sheet repositioning previously discussed, as well as
principal cash flows received from scheduled payments, calls, and
maturities. The decrease from the fourth quarter of 2022 was
primarily due to balance sheet repositioning in the first and
fourth quarters of 2023.
Deposits |
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|
(Dollars in
thousands) |
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Noninterest bearing deposits |
$ |
897,053 |
|
16.6 |
% |
$ |
924,213 |
|
17.2 |
% |
$ |
1,053,450 |
|
19.3 |
% |
Interest checking
deposits |
|
1,320,435 |
|
24.5 |
|
|
1,334,481 |
|
24.9 |
|
|
1,624,278 |
|
29.8 |
|
Money market deposits |
|
1,105,493 |
|
20.5 |
|
|
1,127,287 |
|
21.0 |
|
|
937,340 |
|
17.1 |
|
Savings deposits |
|
650,655 |
|
12.1 |
|
|
619,805 |
|
11.6 |
|
|
664,169 |
|
12.1 |
|
Time deposits of $250 and
under |
|
752,214 |
|
13.9 |
|
|
703,646 |
|
13.1 |
|
|
559,466 |
|
10.2 |
|
Total core deposits |
|
4,725,850 |
|
87.6 |
|
|
4,709,432 |
|
87.8 |
|
|
4,838,703 |
|
88.5 |
|
Brokered time deposits |
|
221,039 |
|
4.1 |
|
|
220,063 |
|
4.1 |
|
|
126,767 |
|
2.3 |
|
Time deposits over $250 |
|
448,784 |
|
8.3 |
|
|
433,829 |
|
8.1 |
|
|
503,472 |
|
9.2 |
|
Total deposits |
$ |
5,395,673 |
|
100.0 |
% |
$ |
5,363,324 |
|
100.0 |
% |
$ |
5,468,942 |
|
100.0 |
% |
Total deposits increased $32.3 million, or 0.6%,
to $5.40 billion from $5.36 billion at September 30, 2023.
Core deposits increased $16.4 million from September 30, 2023.
Total deposits decreased $73.3 million, or 1.3%, from $5.47 billion
at December 31, 2022. Brokered deposits increased
$94.3 million from $126.8 million at December 31,
2022, with core deposits declining $112.9 million from
December 31, 2022.
Borrowed Funds |
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|
(Dollars in
thousands) |
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Short-term borrowings |
$ |
300,264 |
|
70.9 |
% |
$ |
373,956 |
|
75.0 |
% |
$ |
391,873 |
|
73.8 |
% |
Long-term debt |
|
123,296 |
|
29.1 |
% |
|
124,526 |
|
25.0 |
% |
|
139,210 |
|
26.2 |
% |
Total borrowed funds |
$ |
423,560 |
|
|
|
$ |
498,482 |
|
|
|
$ |
531,083 |
|
|
|
Total borrowed funds were $423.6 million at
December 31, 2023, a decrease of $74.9 million from
September 30, 2023 and a decrease of $107.5 million from
December 31, 2022. The decrease when compared to the linked
quarter was due to lower Federal Home Loan Bank overnight
borrowings and securities sold under agreements to repurchase,
partially offset by higher Bank Term Funding Program borrowings.
The decrease when compared to December 31, 2022 was primarily
due to lower Federal Home Loan Bank overnight borrowings and
securities sold under agreements to repurchase, partially offset by
Bank Term Funding Program borrowings of $285 million, as compared
to no such borrowings in the prior year.
Capital |
December 31, |
|
September 30, |
|
December 31, |
(Dollars in
thousands) |
2023(1) |
|
2023 |
|
2022 |
Total shareholders' equity |
$ |
524,378 |
|
|
$ |
505,411 |
|
|
$ |
492,793 |
|
Accumulated other comprehensive loss |
|
(64,899 |
) |
|
|
(84,606 |
) |
|
|
(89,047 |
) |
MidWestOne Financial
Group, Inc. Consolidated |
|
|
|
|
|
Tier 1 leverage to average
assets ratio |
|
8.58 |
% |
|
|
8.58 |
% |
|
|
8.35 |
% |
Common equity tier 1 capital
to risk-weighted assets ratio |
|
9.59 |
% |
|
|
9.52 |
% |
|
|
9.28 |
% |
Tier 1 capital to
risk-weighted assets ratio |
|
10.38 |
% |
|
|
10.31 |
% |
|
|
10.05 |
% |
Total capital to risk-weighted
assets ratio |
|
12.53 |
% |
|
|
12.45 |
% |
|
|
12.07 |
% |
MidWestOne Bank |
|
|
|
|
|
Tier 1 leverage to average
assets ratio |
|
9.39 |
% |
|
|
9.51 |
% |
|
|
9.36 |
% |
Common equity tier 1 capital
to risk-weighted assets ratio |
|
11.54 |
% |
|
|
11.43 |
% |
|
|
11.29 |
% |
Tier 1 capital to
risk-weighted assets ratio |
|
11.54 |
% |
|
|
11.43 |
% |
|
|
11.29 |
% |
Total
capital to risk-weighted assets ratio |
|
12.49 |
% |
|
|
12.36 |
% |
|
|
12.10 |
% |
(1) Regulatory capital ratios for December 31, 2023 are
preliminary |
|
|
|
|
|
Total shareholders' equity at December 31,
2023 increased $19.0 million from September 30, 2023, driven
by a decrease in accumulated other comprehensive loss. Total
shareholders' equity at December 31, 2023 increased $31.6
million from December 31, 2022, driven by a decrease in
accumulated other comprehensive loss and an increase in retained
earnings.
Accumulated other comprehensive loss at
December 31, 2023 decreased $19.7 million compared to
September 30, 2023, primarily due to an increase in available
for sale securities valuations and the recognition of the loss from
the fourth quarter sale of securities. Accumulated other
comprehensive loss decreased $24.1 million from December 31,
2022.
On January 23, 2024, the Board of Directors
of the Company declared a cash dividend of $0.2425 per common
share. The dividend is payable March 15, 2024, to shareholders
of record at the close of business on March 1, 2024.
No common shares were repurchased by the Company
during the period September 30, 2023 through December 31,
2023 or for the subsequent period through January 25, 2024.
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 |
|
December 31, |
|
September 30, |
|
December 31, |
(Dollars in
thousands) |
2023 |
|
2023 |
|
2022 |
Credit loss expense related to loans |
$ |
1,968 |
|
|
$ |
1,651 |
|
|
$ |
572 |
|
Net charge-offs |
|
2,068 |
|
|
|
451 |
|
|
|
3,472 |
|
Allowance for credit losses |
|
51,500 |
|
|
|
51,600 |
|
|
|
49,200 |
|
Pass |
$ |
3,846,012 |
|
|
$ |
3,785,908 |
|
|
$ |
3,635,766 |
|
Special Mention / Watch |
|
113,029 |
|
|
|
163,222 |
|
|
|
108,064 |
|
Classified |
|
167,906 |
|
|
|
116,839 |
|
|
|
96,694 |
|
Loans greater than 30 days past due and accruing |
$ |
10,778 |
|
|
$ |
6,449 |
|
|
$ |
6,680 |
|
Nonperforming loans |
$ |
26,359 |
|
|
$ |
28,987 |
|
|
$ |
15,821 |
|
Nonperforming assets |
|
30,288 |
|
|
|
28,987 |
|
|
|
15,924 |
|
Net charge-off ratio(1) |
|
0.20 |
% |
|
|
0.04 |
% |
|
|
0.36 |
% |
Classified loans ratio(2) |
|
4.07 |
% |
|
|
2.87 |
% |
|
|
2.52 |
% |
Nonperforming loans
ratio(3) |
|
0.64 |
% |
|
|
0.71 |
% |
|
|
0.41 |
% |
Nonperforming assets
ratio(4) |
|
0.47 |
% |
|
|
0.45 |
% |
|
|
0.24 |
% |
Allowance for credit losses
ratio(5) |
|
1.25 |
% |
|
|
1.27 |
% |
|
|
1.28 |
% |
Allowance for credit losses to
nonaccrual loans ratio(6) |
|
198.91 |
% |
|
|
178.63 |
% |
|
|
322.50 |
% |
(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, the
nonperforming loans ratio declined 7 bps and the nonperforming
assets ratio increased 2 bps. The classified loans ratio increased
120 bps from the linked quarter, primarily due to the downgrade of
three larger commercial relationships. When compared to the prior
year, the nonperforming loans and assets ratios both increased 23
bps, to 0.64% and 0.47%.
As of December 31, 2023, the allowance for
credit losses was $51.5 million and the allowance for credit losses
ratio was 1.25%, compared with $51.6 million and 1.27% at
September 30, 2023. When compared to the linked quarter,
credit loss expense of $1.8 million in the fourth quarter of 2023
was primarily attributable to loan growth, with the increase
compared to the prior year stemming from loan growth and
individually evaluated loans.
Nonperforming Loans Roll Forward |
Nonaccrual |
|
90+ Days Past Due & Still Accruing |
|
Total |
(Dollars in
thousands) |
|
|
Balance at September 30,
2023 |
$ |
28,887 |
|
|
$ |
100 |
|
|
$ |
28,987 |
|
Loans placed on nonaccrual or
90+ days past due & still accruing |
|
4,377 |
|
|
|
432 |
|
|
|
4,809 |
|
Proceeds related to repayment
or sale |
|
(1,285 |
) |
|
|
(1 |
) |
|
|
(1,286 |
) |
Loans returned to accrual
status or no longer past due |
|
(289 |
) |
|
|
1 |
|
|
|
(288 |
) |
Charge-offs |
|
(1,955 |
) |
|
|
(64 |
) |
|
|
(2,019 |
) |
Transfers to foreclosed
assets |
|
(3,844 |
) |
|
|
— |
|
|
|
(3,844 |
) |
Balance at December 31,
2023 |
$ |
25,891 |
|
|
$ |
468 |
|
|
$ |
26,359 |
|
CONFERENCE CALL
DETAILS
The Company will host a conference call for
investors at 11:00 a.m. CT on Friday, January 26, 2024. To
participate, you may pre-register for this call utilizing the
following link:
https://www.netroadshow.com/events/login?show=0492f968&confId=59127.
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 827546 at least fifteen
minutes before the call start time. If you are unable to
participate on the call, a replay will be available until April 25,
2024 by calling 1-866-813-9403 and using the replay access code of
572754. 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 or our
third-party vendors' 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) potential
changes in federal policy and at regulatory agencies as a result of
the upcoming 2024 presidential election; (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
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
(In
thousands) |
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
76,237 |
|
|
$ |
71,015 |
|
|
$ |
75,955 |
|
|
$ |
63,945 |
|
|
$ |
83,990 |
|
Interest earning deposits in
banks |
|
5,479 |
|
|
|
3,773 |
|
|
|
68,603 |
|
|
|
5,273 |
|
|
|
2,445 |
|
Federal funds sold |
|
11 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total cash and cash equivalents |
|
81,727 |
|
|
|
74,788 |
|
|
|
144,558 |
|
|
|
69,218 |
|
|
|
86,435 |
|
Debt securities available for
sale at fair value |
|
795,134 |
|
|
|
872,770 |
|
|
|
903,520 |
|
|
|
954,074 |
|
|
|
1,153,547 |
|
Held to maturity securities at
amortized cost |
|
1,075,190 |
|
|
|
1,085,751 |
|
|
|
1,099,569 |
|
|
|
1,117,709 |
|
|
|
1,129,421 |
|
Total securities |
|
1,870,324 |
|
|
|
1,958,521 |
|
|
|
2,003,089 |
|
|
|
2,071,783 |
|
|
|
2,282,968 |
|
Loans held for sale |
|
1,045 |
|
|
|
2,528 |
|
|
|
2,821 |
|
|
|
2,553 |
|
|
|
612 |
|
Gross loans held for
investment |
|
4,138,352 |
|
|
|
4,078,060 |
|
|
|
4,031,377 |
|
|
|
3,932,900 |
|
|
|
3,854,791 |
|
Unearned income, net |
|
(11,405 |
) |
|
|
(12,091 |
) |
|
|
(12,728 |
) |
|
|
(13,535 |
) |
|
|
(14,267 |
) |
Loans held for investment, net of unearned income |
|
4,126,947 |
|
|
|
4,065,969 |
|
|
|
4,018,649 |
|
|
|
3,919,365 |
|
|
|
3,840,524 |
|
Allowance for credit
losses |
|
(51,500 |
) |
|
|
(51,600 |
) |
|
|
(50,400 |
) |
|
|
(49,800 |
) |
|
|
(49,200 |
) |
Total loans held for investment, net |
|
4,075,447 |
|
|
|
4,014,369 |
|
|
|
3,968,249 |
|
|
|
3,869,565 |
|
|
|
3,791,324 |
|
Premises and equipment,
net |
|
85,742 |
|
|
|
85,589 |
|
|
|
85,831 |
|
|
|
86,208 |
|
|
|
87,125 |
|
Goodwill |
|
62,477 |
|
|
|
62,477 |
|
|
|
62,477 |
|
|
|
62,477 |
|
|
|
62,477 |
|
Other intangible assets,
net |
|
24,069 |
|
|
|
25,510 |
|
|
|
26,969 |
|
|
|
28,563 |
|
|
|
30,315 |
|
Foreclosed assets, net |
|
3,929 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
103 |
|
Other assets |
|
222,780 |
|
|
|
244,036 |
|
|
|
227,495 |
|
|
|
219,585 |
|
|
|
236,517 |
|
Total assets |
$ |
6,427,540 |
|
|
$ |
6,467,818 |
|
|
$ |
6,521,489 |
|
|
$ |
6,409,952 |
|
|
$ |
6,577,876 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Noninterest bearing
deposits |
$ |
897,053 |
|
|
$ |
924,213 |
|
|
$ |
897,923 |
|
|
$ |
989,469 |
|
|
$ |
1,053,450 |
|
Interest bearing deposits |
|
4,498,620 |
|
|
|
4,439,111 |
|
|
|
4,547,524 |
|
|
|
4,565,684 |
|
|
|
4,415,492 |
|
Total deposits |
|
5,395,673 |
|
|
|
5,363,324 |
|
|
|
5,445,447 |
|
|
|
5,555,153 |
|
|
|
5,468,942 |
|
Short-term borrowings |
|
300,264 |
|
|
|
373,956 |
|
|
|
362,054 |
|
|
|
143,981 |
|
|
|
391,873 |
|
Long-term debt |
|
123,296 |
|
|
|
124,526 |
|
|
|
125,752 |
|
|
|
137,981 |
|
|
|
139,210 |
|
Other liabilities |
|
83,929 |
|
|
|
100,601 |
|
|
|
86,895 |
|
|
|
72,187 |
|
|
|
85,058 |
|
Total liabilities |
|
5,903,162 |
|
|
|
5,962,407 |
|
|
|
6,020,148 |
|
|
|
5,909,302 |
|
|
|
6,085,083 |
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
Common stock |
|
16,581 |
|
|
|
16,581 |
|
|
|
16,581 |
|
|
|
16,581 |
|
|
|
16,581 |
|
Additional paid-in
capital |
|
302,157 |
|
|
|
301,889 |
|
|
|
301,424 |
|
|
|
300,966 |
|
|
|
302,085 |
|
Retained earnings |
|
294,784 |
|
|
|
295,862 |
|
|
|
290,548 |
|
|
|
286,767 |
|
|
|
289,289 |
|
Treasury stock |
|
(24,245 |
) |
|
|
(24,315 |
) |
|
|
(24,508 |
) |
|
|
(24,779 |
) |
|
|
(26,115 |
) |
Accumulated other
comprehensive loss |
|
(64,899 |
) |
|
|
(84,606 |
) |
|
|
(82,704 |
) |
|
|
(78,885 |
) |
|
|
(89,047 |
) |
Total shareholders' equity |
|
524,378 |
|
|
|
505,411 |
|
|
|
501,341 |
|
|
|
500,650 |
|
|
|
492,793 |
|
Total liabilities and shareholders' equity |
$ |
6,427,540 |
|
|
$ |
6,467,818 |
|
|
$ |
6,521,489 |
|
|
$ |
6,409,952 |
|
|
$ |
6,577,876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDWESTONE FINANCIAL
GROUP, INC. AND SUBSIDIARIES FIVE QUARTER AND YEAR
TO DATE CONSOLIDATED STATEMENTS OF INCOME
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
December 31, |
|
December 31, |
(In thousands, except
per share data) |
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
54,093 |
|
|
$ |
51,870 |
|
|
$ |
49,726 |
|
|
$ |
46,490 |
|
|
$ |
43,769 |
|
|
$ |
202,179 |
|
|
$ |
148,284 |
|
Taxable investment securities |
|
9,274 |
|
|
|
9,526 |
|
|
|
9,734 |
|
|
|
10,444 |
|
|
|
10,685 |
|
|
|
38,978 |
|
|
|
39,019 |
|
Tax-exempt investment securities |
|
1,789 |
|
|
|
1,802 |
|
|
|
1,822 |
|
|
|
2,127 |
|
|
|
2,303 |
|
|
|
7,540 |
|
|
|
9,379 |
|
Other |
|
230 |
|
|
|
374 |
|
|
|
68 |
|
|
|
244 |
|
|
|
— |
|
|
|
916 |
|
|
|
77 |
|
Total interest income |
|
65,386 |
|
|
|
63,572 |
|
|
|
61,350 |
|
|
|
59,305 |
|
|
|
56,757 |
|
|
|
249,613 |
|
|
|
196,759 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
27,200 |
|
|
|
23,128 |
|
|
|
20,117 |
|
|
|
15,319 |
|
|
|
9,127 |
|
|
|
85,764 |
|
|
|
20,245 |
|
Short-term borrowings |
|
3,496 |
|
|
|
3,719 |
|
|
|
2,118 |
|
|
|
1,786 |
|
|
|
1,955 |
|
|
|
11,119 |
|
|
|
3,070 |
|
Long-term debt |
|
2,131 |
|
|
|
2,150 |
|
|
|
2,153 |
|
|
|
2,124 |
|
|
|
2,111 |
|
|
|
8,558 |
|
|
|
7,086 |
|
Total interest expense |
|
32,827 |
|
|
|
28,997 |
|
|
|
24,388 |
|
|
|
19,229 |
|
|
|
13,193 |
|
|
|
105,441 |
|
|
|
30,401 |
|
Net interest income |
|
32,559 |
|
|
|
34,575 |
|
|
|
36,962 |
|
|
|
40,076 |
|
|
|
43,564 |
|
|
|
144,172 |
|
|
|
166,358 |
|
Credit loss expense |
|
1,768 |
|
|
|
1,551 |
|
|
|
1,597 |
|
|
|
933 |
|
|
|
572 |
|
|
|
5,849 |
|
|
|
4,492 |
|
Net interest income after credit loss expense |
|
30,791 |
|
|
|
33,024 |
|
|
|
35,365 |
|
|
|
39,143 |
|
|
|
42,992 |
|
|
|
138,323 |
|
|
|
161,866 |
|
Noninterest income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment services and trust activities |
|
3,193 |
|
|
|
3,004 |
|
|
|
3,119 |
|
|
|
2,933 |
|
|
|
2,666 |
|
|
|
12,249 |
|
|
|
11,223 |
|
Service charges and fees |
|
2,148 |
|
|
|
2,146 |
|
|
|
2,047 |
|
|
|
2,008 |
|
|
|
2,028 |
|
|
|
8,349 |
|
|
|
7,477 |
|
Card revenue |
|
1,802 |
|
|
|
1,817 |
|
|
|
1,847 |
|
|
|
1,748 |
|
|
|
1,784 |
|
|
|
7,214 |
|
|
|
7,210 |
|
Loan revenue |
|
909 |
|
|
|
1,462 |
|
|
|
909 |
|
|
|
1,420 |
|
|
|
966 |
|
|
|
4,700 |
|
|
|
10,504 |
|
Bank-owned life insurance |
|
656 |
|
|
|
626 |
|
|
|
616 |
|
|
|
602 |
|
|
|
637 |
|
|
|
2,500 |
|
|
|
2,305 |
|
Investment securities (losses) gains, net |
|
(5,696 |
) |
|
|
79 |
|
|
|
(2 |
) |
|
|
(13,170 |
) |
|
|
(1 |
) |
|
|
(18,789 |
) |
|
|
271 |
|
Other |
|
850 |
|
|
|
727 |
|
|
|
210 |
|
|
|
413 |
|
|
|
2,860 |
|
|
|
2,200 |
|
|
|
8,529 |
|
Total noninterest income (loss) |
|
3,862 |
|
|
|
9,861 |
|
|
|
8,746 |
|
|
|
(4,046 |
) |
|
|
10,940 |
|
|
|
18,423 |
|
|
|
47,519 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
17,859 |
|
|
|
18,558 |
|
|
|
20,386 |
|
|
|
19,607 |
|
|
|
20,438 |
|
|
|
76,410 |
|
|
|
78,103 |
|
Occupancy expense of premises, net |
|
2,309 |
|
|
|
2,405 |
|
|
|
2,574 |
|
|
|
2,746 |
|
|
|
2,663 |
|
|
|
10,034 |
|
|
|
10,272 |
|
Equipment |
|
2,466 |
|
|
|
2,123 |
|
|
|
2,435 |
|
|
|
2,171 |
|
|
|
2,327 |
|
|
|
9,195 |
|
|
|
8,693 |
|
Legal and professional |
|
2,269 |
|
|
|
1,678 |
|
|
|
1,682 |
|
|
|
1,736 |
|
|
|
1,846 |
|
|
|
7,365 |
|
|
|
8,646 |
|
Data processing |
|
1,411 |
|
|
|
1,504 |
|
|
|
1,521 |
|
|
|
1,363 |
|
|
|
1,375 |
|
|
|
5,799 |
|
|
|
5,574 |
|
Marketing |
|
700 |
|
|
|
782 |
|
|
|
1,142 |
|
|
|
986 |
|
|
|
947 |
|
|
|
3,610 |
|
|
|
4,272 |
|
Amortization of intangibles |
|
1,441 |
|
|
|
1,460 |
|
|
|
1,594 |
|
|
|
1,752 |
|
|
|
1,770 |
|
|
|
6,247 |
|
|
|
6,069 |
|
FDIC insurance |
|
900 |
|
|
|
783 |
|
|
|
862 |
|
|
|
749 |
|
|
|
405 |
|
|
|
3,294 |
|
|
|
1,660 |
|
Communications |
|
183 |
|
|
|
206 |
|
|
|
260 |
|
|
|
261 |
|
|
|
285 |
|
|
|
910 |
|
|
|
1,125 |
|
Foreclosed assets, net |
|
45 |
|
|
|
2 |
|
|
|
(6 |
) |
|
|
(28 |
) |
|
|
48 |
|
|
|
13 |
|
|
|
(18 |
) |
Other |
|
2,548 |
|
|
|
2,043 |
|
|
|
2,469 |
|
|
|
1,976 |
|
|
|
2,336 |
|
|
|
9,036 |
|
|
|
8,392 |
|
Total noninterest expense |
|
32,131 |
|
|
|
31,544 |
|
|
|
34,919 |
|
|
|
33,319 |
|
|
|
34,440 |
|
|
|
131,913 |
|
|
|
132,788 |
|
Income before income tax expense |
|
2,522 |
|
|
|
11,341 |
|
|
|
9,192 |
|
|
|
1,778 |
|
|
|
19,492 |
|
|
|
24,833 |
|
|
|
76,597 |
|
Income tax (benefit) expense |
|
(208 |
) |
|
|
2,203 |
|
|
|
1,598 |
|
|
|
381 |
|
|
|
3,490 |
|
|
|
3,974 |
|
|
|
15,762 |
|
Net income |
$ |
2,730 |
|
|
$ |
9,138 |
|
|
$ |
7,594 |
|
|
$ |
1,397 |
|
|
$ |
16,002 |
|
|
$ |
20,859 |
|
|
$ |
60,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.17 |
|
|
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
0.09 |
|
|
$ |
1.02 |
|
|
$ |
1.33 |
|
|
$ |
3.89 |
|
Diluted |
$ |
0.17 |
|
|
$ |
0.58 |
|
|
$ |
0.48 |
|
|
$ |
0.09 |
|
|
$ |
1.02 |
|
|
$ |
1.33 |
|
|
$ |
3.87 |
|
Weighted average basic common
shares outstanding |
|
15,693 |
|
|
|
15,689 |
|
|
|
15,680 |
|
|
|
15,650 |
|
|
|
15,624 |
|
|
|
15,678 |
|
|
|
15,649 |
|
Weighted average diluted
common shares outstanding |
|
15,756 |
|
|
|
15,711 |
|
|
|
15,689 |
|
|
|
15,691 |
|
|
|
15,693 |
|
|
|
15,725 |
|
|
|
15,701 |
|
Dividends paid per common
share |
$ |
0.2425 |
|
|
$ |
0.2425 |
|
|
$ |
0.2425 |
|
|
$ |
0.2425 |
|
|
$ |
0.2375 |
|
|
$ |
0.9700 |
|
|
$ |
0.9500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDWESTONE FINANCIAL
GROUP, INC. AND SUBSIDIARIES FINANCIAL
STATISTICS
|
As of or for the Three Months Ended |
|
As of or for the Year Ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
(Dollars in thousands,
except per share amounts) |
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Earnings: |
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
32,559 |
|
|
$ |
34,575 |
|
|
$ |
43,564 |
|
|
$ |
144,172 |
|
|
$ |
166,358 |
|
Noninterest income |
|
3,862 |
|
|
|
9,861 |
|
|
|
10,940 |
|
|
|
18,423 |
|
|
|
47,519 |
|
Total revenue, net of interest expense |
|
36,421 |
|
|
|
44,436 |
|
|
|
54,504 |
|
|
|
162,595 |
|
|
|
213,877 |
|
Credit loss expense |
|
1,768 |
|
|
|
1,551 |
|
|
|
572 |
|
|
|
5,849 |
|
|
|
4,492 |
|
Noninterest expense |
|
32,131 |
|
|
|
31,544 |
|
|
|
34,440 |
|
|
|
131,913 |
|
|
|
132,788 |
|
Income before income tax expense |
|
2,522 |
|
|
|
11,341 |
|
|
|
19,492 |
|
|
|
24,833 |
|
|
|
76,597 |
|
Income tax (benefit)
expense |
|
(208 |
) |
|
|
2,203 |
|
|
|
3,490 |
|
|
|
3,974 |
|
|
|
15,762 |
|
Net income |
$ |
2,730 |
|
|
$ |
9,138 |
|
|
$ |
16,002 |
|
|
$ |
20,859 |
|
|
$ |
60,835 |
|
Per Share
Data: |
|
|
|
|
|
|
|
|
|
Diluted earnings |
$ |
0.17 |
|
|
$ |
0.58 |
|
|
$ |
1.02 |
|
|
$ |
1.33 |
|
|
$ |
3.87 |
|
Book value |
|
33.41 |
|
|
|
32.21 |
|
|
|
31.54 |
|
|
|
33.41 |
|
|
|
31.54 |
|
Tangible book value(1) |
|
27.90 |
|
|
|
26.60 |
|
|
|
25.60 |
|
|
|
27.90 |
|
|
|
25.60 |
|
Ending Balance
Sheet: |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
6,427,540 |
|
|
$ |
6,467,818 |
|
|
$ |
6,577,876 |
|
|
$ |
6,427,540 |
|
|
$ |
6,577,876 |
|
Loans held for investment, net
of unearned income |
|
4,126,947 |
|
|
|
4,065,969 |
|
|
|
3,840,524 |
|
|
|
4,126,947 |
|
|
|
3,840,524 |
|
Total securities |
|
1,870,324 |
|
|
|
1,958,521 |
|
|
|
2,282,968 |
|
|
|
1,870,324 |
|
|
|
2,282,968 |
|
Total deposits |
|
5,395,673 |
|
|
|
5,363,324 |
|
|
|
5,468,942 |
|
|
|
5,395,673 |
|
|
|
5,468,942 |
|
Short-term borrowings |
|
300,264 |
|
|
|
373,956 |
|
|
|
391,873 |
|
|
|
300,264 |
|
|
|
391,873 |
|
Long-term debt |
|
123,296 |
|
|
|
124,526 |
|
|
|
139,210 |
|
|
|
123,296 |
|
|
|
139,210 |
|
Total shareholders'
equity |
|
524,378 |
|
|
|
505,411 |
|
|
|
492,793 |
|
|
|
524,378 |
|
|
|
492,793 |
|
Average Balance
Sheet: |
|
|
|
|
|
|
|
|
|
Average total assets |
$ |
6,459,705 |
|
|
$ |
6,452,815 |
|
|
$ |
6,516,969 |
|
|
$ |
6,475,360 |
|
|
$ |
6,244,284 |
|
Average total loans |
|
4,080,243 |
|
|
|
4,019,852 |
|
|
|
3,791,880 |
|
|
|
3,993,389 |
|
|
|
3,511,192 |
|
Average total deposits |
|
5,443,323 |
|
|
|
5,379,871 |
|
|
|
5,495,599 |
|
|
|
5,455,609 |
|
|
|
5,309,049 |
|
Financial
Ratios: |
|
|
|
|
|
|
|
|
|
Return on average assets |
|
0.17 |
% |
|
|
0.56 |
% |
|
|
0.97 |
% |
|
|
0.32 |
% |
|
|
0.97 |
% |
Return on average equity |
|
2.12 |
% |
|
|
7.14 |
% |
|
|
13.26 |
% |
|
|
4.12 |
% |
|
|
12.16 |
% |
Return on average tangible
equity(1) |
|
3.57 |
% |
|
|
9.68 |
% |
|
|
17.85 |
% |
|
|
6.14 |
% |
|
|
15.89 |
% |
Efficiency ratio(1) |
|
70.16 |
% |
|
|
66.06 |
% |
|
|
57.79 |
% |
|
|
67.28 |
% |
|
|
56.98 |
% |
Net interest margin, tax
equivalent(1) |
|
2.22 |
% |
|
|
2.35 |
% |
|
|
2.93 |
% |
|
|
2.46 |
% |
|
|
2.92 |
% |
Loans to deposits ratio |
|
76.49 |
% |
|
|
75.81 |
% |
|
|
70.22 |
% |
|
|
76.49 |
% |
|
|
70.22 |
% |
Common equity ratio |
|
8.16 |
% |
|
|
7.81 |
% |
|
|
7.49 |
% |
|
|
8.16 |
% |
|
|
7.49 |
% |
Tangible common equity
ratio(1) |
|
6.90 |
% |
|
|
6.54 |
% |
|
|
6.17 |
% |
|
|
6.90 |
% |
|
|
6.17 |
% |
Credit Risk
Profile: |
|
|
|
|
|
|
|
|
|
Total nonperforming loans |
$ |
26,359 |
|
|
$ |
28,987 |
|
|
$ |
15,821 |
|
|
$ |
26,359 |
|
|
$ |
15,821 |
|
Nonperforming loans ratio |
|
0.64 |
% |
|
|
0.71 |
% |
|
|
0.41 |
% |
|
|
0.64 |
% |
|
|
0.41 |
% |
Total nonperforming
assets |
$ |
30,288 |
|
|
$ |
28,987 |
|
|
$ |
15,924 |
|
|
$ |
30,288 |
|
|
$ |
15,924 |
|
Nonperforming assets
ratio |
|
0.47 |
% |
|
|
0.45 |
% |
|
|
0.24 |
% |
|
|
0.47 |
% |
|
|
0.24 |
% |
Net charge-offs |
$ |
2,068 |
|
|
$ |
451 |
|
|
$ |
3,472 |
|
|
$ |
3,749 |
|
|
$ |
6,563 |
|
Net charge-off ratio |
|
0.20 |
% |
|
|
0.04 |
% |
|
|
0.36 |
% |
|
|
0.09 |
% |
|
|
0.19 |
% |
Allowance for credit
losses |
$ |
51,500 |
|
|
$ |
51,600 |
|
|
$ |
49,200 |
|
|
$ |
51,500 |
|
|
$ |
49,200 |
|
Allowance for credit losses
ratio |
|
1.25 |
% |
|
|
1.27 |
% |
|
|
1.28 |
% |
|
|
1.25 |
% |
|
|
1.28 |
% |
Allowance for credit losses to
nonaccrual ratio |
|
198.91 |
% |
|
|
178.63 |
% |
|
|
322.50 |
% |
|
|
198.91 |
% |
|
|
322.50 |
% |
|
|
|
|
|
|
|
|
|
|
(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 |
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 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) |
$ |
4,080,243 |
|
$ |
54,939 |
|
5.34 |
% |
|
$ |
4,019,852 |
|
$ |
52,605 |
|
5.19 |
% |
|
$ |
3,791,880 |
|
$ |
44,494 |
|
4.66 |
% |
Taxable investment
securities |
|
1,593,699 |
|
|
9,274 |
|
2.31 |
% |
|
|
1,637,259 |
|
|
9,526 |
|
2.31 |
% |
|
|
1,865,494 |
|
|
10,685 |
|
2.27 |
% |
Tax-exempt investment
securities(2)(4) |
|
338,243 |
|
|
2,217 |
|
2.60 |
% |
|
|
341,330 |
|
|
2,234 |
|
2.60 |
% |
|
|
422,156 |
|
|
2,893 |
|
2.72 |
% |
Total securities held for investment(2) |
|
1,931,942 |
|
|
11,491 |
|
2.36 |
% |
|
|
1,978,589 |
|
|
11,760 |
|
2.36 |
% |
|
|
2,287,650 |
|
|
13,578 |
|
2.35 |
% |
Other |
|
22,937 |
|
|
230 |
|
3.98 |
% |
|
|
34,195 |
|
|
374 |
|
4.34 |
% |
|
|
5,562 |
|
|
— |
|
— |
% |
Total interest earning assets(2) |
$ |
6,035,122 |
|
$ |
66,660 |
|
4.38 |
% |
|
$ |
6,032,636 |
|
$ |
64,739 |
|
4.26 |
% |
|
$ |
6,085,092 |
|
$ |
58,072 |
|
3.79 |
% |
Other assets |
|
424,583 |
|
|
|
|
|
|
420,179 |
|
|
|
|
|
|
431,877 |
|
|
|
|
Total assets |
$ |
6,459,705 |
|
|
|
|
|
$ |
6,452,815 |
|
|
|
|
|
$ |
6,516,969 |
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest checking
deposits |
$ |
1,305,759 |
|
$ |
2,991 |
|
0.91 |
% |
|
$ |
1,354,597 |
|
$ |
2,179 |
|
0.64 |
% |
|
$ |
1,632,749 |
|
$ |
1,703 |
|
0.41 |
% |
Money market deposits |
|
1,103,637 |
|
|
7,954 |
|
2.86 |
% |
|
|
1,112,149 |
|
|
7,402 |
|
2.64 |
% |
|
|
995,512 |
|
|
2,369 |
|
0.94 |
% |
Savings deposits |
|
639,766 |
|
|
1,493 |
|
0.93 |
% |
|
|
603,628 |
|
|
749 |
|
0.49 |
% |
|
|
683,538 |
|
|
306 |
|
0.18 |
% |
Time deposits |
|
1,463,498 |
|
|
14,762 |
|
4.00 |
% |
|
|
1,403,504 |
|
|
12,798 |
|
3.62 |
% |
|
|
1,067,044 |
|
|
4,749 |
|
1.77 |
% |
Total interest bearing deposits |
|
4,512,660 |
|
|
27,200 |
|
2.39 |
% |
|
|
4,473,878 |
|
|
23,128 |
|
2.05 |
% |
|
|
4,378,843 |
|
|
9,127 |
|
0.83 |
% |
Securities sold under
agreements to repurchase |
|
8,661 |
|
|
17 |
|
0.78 |
% |
|
|
66,020 |
|
|
85 |
|
0.51 |
% |
|
|
151,880 |
|
|
437 |
|
1.14 |
% |
Other short-term
borrowings |
|
273,963 |
|
|
3,479 |
|
5.04 |
% |
|
|
277,713 |
|
|
3,634 |
|
5.19 |
% |
|
|
153,155 |
|
|
1,518 |
|
3.93 |
% |
Short-term borrowings |
|
282,624 |
|
|
3,496 |
|
4.91 |
% |
|
|
343,733 |
|
|
3,719 |
|
4.29 |
% |
|
|
305,035 |
|
|
1,955 |
|
2.54 |
% |
Long-term debt |
|
124,495 |
|
|
2,131 |
|
6.79 |
% |
|
|
125,737 |
|
|
2,150 |
|
6.78 |
% |
|
|
151,266 |
|
|
2,111 |
|
5.54 |
% |
Total borrowed funds |
|
407,119 |
|
|
5,627 |
|
5.48 |
% |
|
|
469,470 |
|
|
5,869 |
|
4.96 |
% |
|
|
456,301 |
|
|
4,066 |
|
3.54 |
% |
Total interest bearing liabilities |
$ |
4,919,779 |
|
$ |
32,827 |
|
2.65 |
% |
|
$ |
4,943,348 |
|
$ |
28,997 |
|
2.33 |
% |
|
$ |
4,835,144 |
|
$ |
13,193 |
|
1.08 |
% |
Noninterest bearing
deposits |
|
930,663 |
|
|
|
|
|
|
905,993 |
|
|
|
|
|
|
1,116,756 |
|
|
|
|
Other liabilities |
|
98,027 |
|
|
|
|
|
|
95,408 |
|
|
|
|
|
|
86,242 |
|
|
|
|
Shareholders’ equity |
|
511,236 |
|
|
|
|
|
|
508,066 |
|
|
|
|
|
|
478,827 |
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
6,459,705 |
|
|
|
|
|
$ |
6,452,815 |
|
|
|
|
|
$ |
6,516,969 |
|
|
|
|
Net interest income(2) |
|
|
$ |
33,833 |
|
|
|
|
|
$ |
35,742 |
|
|
|
|
|
$ |
44,879 |
|
|
Net interest spread(2) |
|
|
|
|
1.73 |
% |
|
|
|
|
|
1.93 |
% |
|
|
|
|
|
2.71 |
% |
Net interest margin(2) |
|
|
|
|
2.22 |
% |
|
|
|
|
|
2.35 |
% |
|
|
|
|
|
2.93 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits(5) |
$ |
5,443,323 |
|
$ |
27,200 |
|
1.98 |
% |
|
$ |
5,379,871 |
|
$ |
23,128 |
|
1.71 |
% |
|
$ |
5,495,599 |
|
$ |
9,127 |
|
0.66 |
% |
Cost of funds(6) |
|
|
|
|
2.23 |
% |
|
|
|
|
|
1.97 |
% |
|
|
|
|
|
0.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $207 thousand, $141
thousand, and $87 thousand for the three months ended
December 31, 2023, September 30, 2023, and
December 31, 2022, respectively. Loan purchase discount
accretion was $765 thousand, $791 thousand, and $1.3 million for
the three months ended December 31, 2023, September 30,
2023, and December 31, 2022, respectively. Tax equivalent
adjustments were $846 thousand, $735 thousand, and $725 thousand
for the three months ended December 31, 2023,
September 30, 2023, and December 31, 2022, respectively.
The federal statutory tax rate utilized was 21%. |
(4) Interest
income includes tax equivalent adjustments of $428 thousand, $432
thousand, and $590 thousand for the three months ended
December 31, 2023, September 30, 2023, and
December 31, 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
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2022 |
(Dollars in
thousands) |
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
|
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees(1)(2)(3) |
$ |
3,993,389 |
|
$ |
205,189 |
|
5.14 |
% |
|
$ |
3,511,192 |
|
$ |
150,791 |
|
4.29 |
% |
Taxable investment
securities |
|
1,684,360 |
|
|
38,978 |
|
2.31 |
% |
|
|
1,891,234 |
|
|
39,019 |
|
2.06 |
% |
Tax-exempt investment
securities(2)(4) |
|
355,454 |
|
|
9,353 |
|
2.63 |
% |
|
|
435,907 |
|
|
11,788 |
|
2.70 |
% |
Total securities held for investment(2) |
|
2,039,814 |
|
|
48,331 |
|
2.37 |
% |
|
|
2,327,141 |
|
|
50,807 |
|
2.18 |
% |
Other |
|
22,791 |
|
|
916 |
|
4.02 |
% |
|
|
20,827 |
|
|
77 |
|
0.37 |
% |
Total interest earning assets(2) |
$ |
6,055,994 |
|
$ |
254,436 |
|
4.20 |
% |
|
$ |
5,859,160 |
|
$ |
201,675 |
|
3.44 |
% |
Other assets |
|
419,366 |
|
|
|
|
|
|
385,124 |
|
|
|
|
Total assets |
$ |
6,475,360 |
|
|
|
|
|
$ |
6,244,284 |
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Interest checking
deposits |
$ |
1,398,538 |
|
$ |
8,990 |
|
0.64 |
% |
|
$ |
1,640,303 |
|
$ |
5,416 |
|
0.33 |
% |
Money market deposits |
|
1,037,123 |
|
|
23,924 |
|
2.31 |
% |
|
|
992,390 |
|
|
4,707 |
|
0.47 |
% |
Savings deposits |
|
624,990 |
|
|
2,802 |
|
0.45 |
% |
|
|
674,846 |
|
|
1,169 |
|
0.17 |
% |
Time deposits |
|
1,443,770 |
|
|
50,048 |
|
3.47 |
% |
|
|
925,592 |
|
|
8,953 |
|
0.97 |
% |
Total interest bearing deposits |
|
4,504,421 |
|
|
85,764 |
|
1.90 |
% |
|
|
4,233,131 |
|
|
20,245 |
|
0.48 |
% |
Securities sold under
agreements to repurchase |
|
94,563 |
|
|
975 |
|
1.03 |
% |
|
|
152,466 |
|
|
872 |
|
0.57 |
% |
Other short-term
borrowings |
|
199,530 |
|
|
10,144 |
|
5.08 |
% |
|
|
70,729 |
|
|
2,198 |
|
3.11 |
% |
Short-term borrowings |
|
294,093 |
|
|
11,119 |
|
3.78 |
% |
|
|
223,195 |
|
|
3,070 |
|
1.38 |
% |
Long-term debt |
|
131,137 |
|
|
8,558 |
|
6.53 |
% |
|
|
148,863 |
|
|
7,086 |
|
4.76 |
% |
Total borrowed funds |
|
425,230 |
|
|
19,677 |
|
4.63 |
% |
|
|
372,058 |
|
|
10,156 |
|
2.73 |
% |
Total interest bearing liabilities |
$ |
4,929,651 |
|
$ |
105,441 |
|
2.14 |
% |
|
$ |
4,605,189 |
|
$ |
30,401 |
|
0.66 |
% |
Noninterest bearing
deposits |
|
951,188 |
|
|
|
|
|
|
1,075,918 |
|
|
|
|
Other liabilities |
|
88,770 |
|
|
|
|
|
|
62,706 |
|
|
|
|
Shareholders’ equity |
|
505,751 |
|
|
|
|
|
|
500,471 |
|
|
|
|
Total liabilities and shareholders’ equity |
$ |
6,475,360 |
|
|
|
|
|
$ |
6,244,284 |
|
|
|
|
Net interest income(2) |
|
|
$ |
148,995 |
|
|
|
|
|
$ |
171,274 |
|
|
Net interest spread(2) |
|
|
|
|
2.06 |
% |
|
|
|
|
|
2.78 |
% |
Net interest margin(2) |
|
|
|
|
2.46 |
% |
|
|
|
|
|
2.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits(5) |
$ |
5,455,609 |
|
$ |
85,764 |
|
1.57 |
% |
|
$ |
5,309,049 |
|
$ |
20,245 |
|
0.38 |
% |
Cost of funds(6) |
|
|
|
|
1.79 |
% |
|
|
|
|
|
0.54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $522 thousand and
$765 thousand for the year ended December 31, 2023 and
December 31, 2022, respectively. Loan purchase discount
accretion was $3.7 million and $4.6 million for the year ended
December 31, 2023 and December 31, 2022, respectively.
Tax equivalent adjustments were $3.0 million and
$2.5 million for the year ended December 31, 2023 and
December 31, 2022, respectively. The federal statutory tax
rate utilized was 21%. |
(4) Interest
income includes tax equivalent adjustments of $1.8 million and
$2.4 million for the year ended December 31, 2023 and
December 31, 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, and efficiency ratio.
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 |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
(Dollars in thousands, except per share data) |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
Total shareholders’ equity |
|
$ |
524,378 |
|
|
$ |
505,411 |
|
|
$ |
501,341 |
|
|
$ |
500,650 |
|
|
$ |
492,793 |
|
Intangible assets, net |
|
|
(86,546 |
) |
|
|
(87,987 |
) |
|
|
(89,446 |
) |
|
|
(91,040 |
) |
|
|
(92,792 |
) |
Tangible common equity |
|
$ |
437,832 |
|
|
$ |
417,424 |
|
|
$ |
411,895 |
|
|
$ |
409,610 |
|
|
$ |
400,001 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
6,427,540 |
|
|
$ |
6,467,818 |
|
|
$ |
6,521,489 |
|
|
$ |
6,409,952 |
|
|
$ |
6,577,876 |
|
Intangible assets, net |
|
|
(86,546 |
) |
|
|
(87,987 |
) |
|
|
(89,446 |
) |
|
|
(91,040 |
) |
|
|
(92,792 |
) |
Tangible assets |
|
$ |
6,340,994 |
|
|
$ |
6,379,831 |
|
|
$ |
6,432,043 |
|
|
$ |
6,318,912 |
|
|
$ |
6,485,084 |
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
33.41 |
|
|
$ |
32.21 |
|
|
$ |
31.96 |
|
|
$ |
31.94 |
|
|
$ |
31.54 |
|
Tangible book value per
share(1) |
|
$ |
27.90 |
|
|
$ |
26.60 |
|
|
$ |
26.26 |
|
|
$ |
26.13 |
|
|
$ |
25.60 |
|
Shares outstanding |
|
|
15,694,306 |
|
|
|
15,691,738 |
|
|
|
15,685,123 |
|
|
|
15,675,325 |
|
|
|
15,623,977 |
|
|
|
|
|
|
|
|
|
|
|
|
Common equity ratio |
|
|
8.16 |
% |
|
|
7.81 |
% |
|
|
7.69 |
% |
|
|
7.81 |
% |
|
|
7.49 |
% |
Tangible common equity
ratio(2) |
|
|
6.90 |
% |
|
|
6.54 |
% |
|
|
6.40 |
% |
|
|
6.48 |
% |
|
|
6.17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tangible
common equity divided by shares outstanding. |
(2) Tangible
common equity divided by tangible assets. |
|
|
|
Three Months Ended |
|
Year Ended |
Return on Average
Tangible Equity |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
(Dollars in thousands) |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net income |
|
$ |
2,730 |
|
|
$ |
9,138 |
|
|
$ |
16,002 |
|
|
$ |
20,859 |
|
|
$ |
60,835 |
|
Intangible amortization, net
of tax(1) |
|
|
1,081 |
|
|
|
1,095 |
|
|
|
1,328 |
|
|
|
4,685 |
|
|
|
4,552 |
|
Tangible net income |
|
$ |
3,811 |
|
|
$ |
10,233 |
|
|
$ |
17,330 |
|
|
$ |
25,544 |
|
|
$ |
65,387 |
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders’
equity |
|
$ |
511,236 |
|
|
$ |
508,066 |
|
|
$ |
478,827 |
|
|
$ |
505,751 |
|
|
$ |
500,471 |
|
Average intangible assets,
net |
|
|
(87,258 |
) |
|
|
(88,699 |
) |
|
|
(93,662 |
) |
|
|
(89,539 |
) |
|
|
(88,917 |
) |
Average tangible equity |
|
$ |
423,978 |
|
|
$ |
419,367 |
|
|
$ |
385,165 |
|
|
$ |
416,212 |
|
|
$ |
411,554 |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average equity |
|
|
2.12 |
% |
|
|
7.14 |
% |
|
|
13.26 |
% |
|
|
4.12 |
% |
|
|
12.16 |
% |
Return on average tangible
equity(2) |
|
|
3.57 |
% |
|
|
9.68 |
% |
|
|
17.85 |
% |
|
|
6.14 |
% |
|
|
15.89 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The combined
income tax rate utilized was 25%. |
(2) Annualized
tangible net income divided by average tangible equity. |
|
Net Interest Margin,
Tax Equivalent/Core Net Interest
Margin |
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
(Dollars in thousands) |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net interest income |
|
$ |
32,559 |
|
|
$ |
34,575 |
|
|
$ |
43,564 |
|
|
$ |
144,172 |
|
|
$ |
166,358 |
|
Tax equivalent
adjustments: |
|
|
|
|
|
|
|
|
|
|
Loans(1) |
|
|
846 |
|
|
|
735 |
|
|
|
725 |
|
|
|
3,010 |
|
|
|
2,507 |
|
Securities(1) |
|
|
428 |
|
|
|
432 |
|
|
|
590 |
|
|
|
1,813 |
|
|
|
2,409 |
|
Net interest income, tax equivalent |
|
$ |
33,833 |
|
|
$ |
35,742 |
|
|
$ |
44,879 |
|
|
$ |
148,995 |
|
|
$ |
171,274 |
|
Loan purchase discount
accretion |
|
|
(765 |
) |
|
|
(791 |
) |
|
|
(1,286 |
) |
|
|
(3,729 |
) |
|
|
(4,561 |
) |
Core net interest income |
|
$ |
33,068 |
|
|
$ |
34,951 |
|
|
$ |
43,593 |
|
|
$ |
145,266 |
|
|
$ |
166,713 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
|
2.14 |
% |
|
|
2.27 |
% |
|
|
2.84 |
% |
|
|
2.38 |
% |
|
|
2.84 |
% |
Net interest margin, tax
equivalent(2) |
|
|
2.22 |
% |
|
|
2.35 |
% |
|
|
2.93 |
% |
|
|
2.46 |
% |
|
|
2.92 |
% |
Core net interest
margin(3) |
|
|
2.17 |
% |
|
|
2.30 |
% |
|
|
2.84 |
% |
|
|
2.40 |
% |
|
|
2.85 |
% |
Average interest earning
assets |
|
$ |
6,035,122 |
|
|
$ |
6,032,636 |
|
|
$ |
6,085,092 |
|
|
$ |
6,055,994 |
|
|
$ |
5,859,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
Year Ended |
Loan Yield, Tax
Equivalent / Core Yield on Loans |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
(Dollars in thousands) |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Loan interest income, including fees |
|
$ |
54,093 |
|
|
$ |
51,870 |
|
|
$ |
43,769 |
|
|
$ |
202,179 |
|
|
$ |
148,284 |
|
Tax equivalent
adjustment(1) |
|
|
846 |
|
|
|
735 |
|
|
|
725 |
|
|
|
3,010 |
|
|
|
2,507 |
|
Tax equivalent loan interest income |
|
$ |
54,939 |
|
|
$ |
52,605 |
|
|
$ |
44,494 |
|
|
$ |
205,189 |
|
|
$ |
150,791 |
|
Loan purchase discount
accretion |
|
|
(765 |
) |
|
|
(791 |
) |
|
|
(1,286 |
) |
|
|
(3,729 |
) |
|
|
(4,561 |
) |
Core loan interest income |
|
$ |
54,174 |
|
|
$ |
51,814 |
|
|
$ |
43,208 |
|
|
$ |
201,460 |
|
|
$ |
146,230 |
|
|
|
|
|
|
|
|
|
|
|
|
Yield on loans |
|
|
5.26 |
% |
|
|
5.12 |
% |
|
|
4.58 |
% |
|
|
5.06 |
% |
|
|
4.22 |
% |
Yield on loans, tax
equivalent(2) |
|
|
5.34 |
% |
|
|
5.19 |
% |
|
|
4.66 |
% |
|
|
5.14 |
% |
|
|
4.29 |
% |
Core yield on loans(3) |
|
|
5.27 |
% |
|
|
5.11 |
% |
|
|
4.52 |
% |
|
|
5.04 |
% |
|
|
4.16 |
% |
Average loans |
|
$ |
4,080,243 |
|
|
$ |
4,019,852 |
|
|
$ |
3,791,880 |
|
|
$ |
3,993,389 |
|
|
$ |
3,511,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
Year Ended |
Efficiency
Ratio |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
(Dollars in thousands) |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Total noninterest expense |
|
$ |
32,131 |
|
|
$ |
31,544 |
|
|
$ |
34,440 |
|
|
$ |
131,913 |
|
|
$ |
132,788 |
|
Amortization of
intangibles |
|
|
(1,441 |
) |
|
|
(1,460 |
) |
|
|
(1,770 |
) |
|
|
(6,247 |
) |
|
|
(6,069 |
) |
Merger-related expenses |
|
|
(245 |
) |
|
|
(11 |
) |
|
|
(409 |
) |
|
|
(392 |
) |
|
|
(2,201 |
) |
Noninterest expense used for efficiency ratio |
|
$ |
30,445 |
|
|
$ |
30,073 |
|
|
$ |
32,261 |
|
|
$ |
125,274 |
|
|
$ |
124,518 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income, tax
equivalent(1) |
|
$ |
33,833 |
|
|
$ |
35,742 |
|
|
$ |
44,879 |
|
|
$ |
148,995 |
|
|
$ |
171,274 |
|
Plus: Noninterest income |
|
|
3,862 |
|
|
|
9,861 |
|
|
|
10,940 |
|
|
|
18,423 |
|
|
|
47,519 |
|
Less: Investment securities
(losses) gains, net |
|
|
(5,696 |
) |
|
|
79 |
|
|
|
(1 |
) |
|
|
(18,789 |
) |
|
|
271 |
|
Net revenues used for efficiency ratio |
|
$ |
43,391 |
|
|
$ |
45,524 |
|
|
$ |
55,820 |
|
|
$ |
186,207 |
|
|
$ |
218,522 |
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio(2) |
|
|
70.16 |
% |
|
|
66.06 |
% |
|
|
57.79 |
% |
|
|
67.28 |
% |
|
|
56.98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
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 |
|
|
|
|
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