MidWestOne Financial Group, Inc. Reports Financial Results for the Third Quarter of 2024
MidWestOne Financial Group (MOFG) reported Q3 2024 results, highlighting a significant balance sheet repositioning. The company completed a common equity capital raise of $118.6 million and recognized a $140.4 million securities impairment. The quarter resulted in a net loss of $95.7 million, or $(6.05) per diluted share. Post quarter-end, MOFG sold $1.0 billion of debt securities yielding 1.58% and purchased $589.8 million of securities yielding 4.65%. The company's net interest margin expanded 10 basis points to 2.51%, with annualized loan growth of 3.9%. Noninterest bearing deposits increased 4.0%, while the nonperforming assets ratio improved to 0.39%.
MidWestOne Financial Group (MOFG) ha riportato i risultati del terzo trimestre del 2024, evidenziando un significativo riposizionamento del bilancio. L'azienda ha completato un aumento di capitale in equity comune di 118,6 milioni di dollari e ha riconosciuto un deprezzamento di titoli di 140,4 milioni di dollari. Il trimestre si è concluso con una perdita netta di 95,7 milioni di dollari, ovvero $(6,05) per azione diluita. Dopo la fine del trimestre, MOFG ha venduto 1,0 miliardi di dollari di titoli di debito con un rendimento dell'1,58% e ha acquistato 589,8 milioni di dollari di titoli con un rendimento del 4,65%. Il margine di interesse netto dell'azienda è aumentato di 10 punti base, raggiungendo il 2,51%, con un crescita annualizzata dei prestiti del 3,9%. I depositi non remunerati sono aumentati del 4,0%, mentre il rapporto degli attivi non performanti è migliorato, scendendo allo 0,39%.
MidWestOne Financial Group (MOFG) informó sobre los resultados del tercer trimestre de 2024, destacando un importante reposicionamiento del balance. La compañía completó una emisión de capital en acciones comunes de 118,6 millones de dólares y reconoció un menoscabo de valores de 140,4 millones de dólares. El trimestre resultó en una pérdida neta de 95,7 millones de dólares, o $(6,05) por acción diluida. Después del cierre del trimestre, MOFG vendió 1,0 mil millones de dólares en valores de deuda que rinden el 1,58% y compró 589,8 millones de dólares en valores que rinden el 4,65%. El margen de interés neto de la compañía se expandió en 10 puntos básicos, alcanzando el 2,51%, con un crecimiento anualizado de préstamos del 3,9%. Los depósitos no remunerados aumentaron un 4,0%, mientras que la tasa de activos no rentables mejoró al 0,39%.
MidWestOne Financial Group (MOFG)는 2024년 3분기 실적을 발표하며 중요한 재무 재편성 결과를 강조했습니다. 회사는 1억 1860만 달러의 일반 주식 자본 조달을 완료하고 1억 4040만 달러의 유가증권 손상을 인식했습니다. 이번 분기는 9570만 달러의 순손실로 마감되었으며, 희석주당 $(6.05)입니다. 분기 종료 후 MOFG는 15억 달러의 부채 유가증권을 1.58%의 수익률로 판매하고, 5억 8980만 달러의 유가증권을 4.65%의 수익률로 구매했습니다. 회사의 순이자 마진은 10bp 증가하여 2.51%에 도달했으며, 연간 대출 성장률은 3.9%입니다. 이자 없는 예금은 4.0% 증가했으며, 부실 자산 비율은 0.39%로 개선되었습니다.
MidWestOne Financial Group (MOFG) a publié ses résultats du troisième trimestre 2024, mettant en avant un repositionnement significatif de son bilan. La société a achevé une augmentation de capital par actions ordinaires de 118,6 millions de dollars et a reconnu une dépréciation des valeurs mobilières de 140,4 millions de dollars. Ce trimestre s'est soldé par une perte nette de 95,7 millions de dollars, soit $(6,05) par action diluée. Après la fin du trimestre, MOFG a vendu pour 1,0 milliard de dollars de titres de créance avec un rendement de 1,58% et a acheté des titres pour un montant de 589,8 millions de dollars avec un rendement de 4,65%. La marge d'intérêt nette de l'entreprise a augmenté de 10 points de base, atteignant 2,51%, avec une croissance des prêts annualisée de 3,9%. Les dépôts non rémunérés ont augmenté de 4,0%, tandis que le ratio des actifs non performants s'est amélioré pour atteindre 0,39%.
MidWestOne Financial Group (MOFG) berichtete über die Ergebnisse des 3. Quartals 2024 und hob eine bedeutende Umstrukturierung der Bilanz hervor. Das Unternehmen schloss eine Kapitalerhöhung in Stammaktien in Höhe von 118,6 Millionen US-Dollar ab und erkannte eine Wertberichtigung auf Wertpapiere in Höhe von 140,4 Millionen US-Dollar an. Das Quartal endete mit einem Nettoverlust von 95,7 Millionen US-Dollar, was $(6,05) pro verwässerter Aktie entspricht. Nach Ende des Quartals verkaufte MOFG Schuldtitel im Wert von 1,0 Milliarden Dollar mit einer Rendite von 1,58% und kaufte Schuldtitel im Wert von 589,8 Millionen Dollar mit einer Rendite von 4,65%. Die Nettozinsspanne des Unternehmens erweiterte sich um 10 Basispunkte auf 2,51%, mit einem annualisierten Kreditwachstum von 3,9%. Zinsfreie Einlagen stiegen um 4,0%, während sich die Quote der notleidenden Vermögenswerte auf 0,39% verbesserte.
- Net interest margin expanded 10 basis points to 2.51%
- Annualized loan growth of 3.9%
- Noninterest bearing deposits increased 4.0%
- Nonperforming assets ratio improved to 0.39%
- Classified loans declined by $14.5 million to $134.8 million
- Net loss of $95.7 million ($6.05 per diluted share)
- $140.4 million securities impairment
- $1.2 million fraud loss from single incident
- Total deposits declined $43.7 million (0.8%)
Insights
The Q3 2024 results reflect a significant balance sheet transformation at MidWestOne Financial. Key highlights include:
- A
$118.6 million capital raise and strategic repositioning resulting in a$140.4 million securities impairment - Net loss of
$95.7 million ($6.05 per share), though adjusted earnings were$9.1 million ($0.58 per share) - Net interest margin improved 10bps to
2.51% , with loan growth at3.9% annualized - Asset quality remains solid with nonperforming assets at
0.39%
The balance sheet repositioning, while causing a short-term earnings hit, positions the bank for improved profitability with an estimated 4.5-year earnback period. The successful capital raise and strategic moves to improve asset yields demonstrate management's proactive approach to enhancing long-term performance.
IOWA CITY, Iowa, Oct. 24, 2024 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported results for the third quarter of 2024.
Third Quarter 2024 Summary1
- Completed a common equity capital raise, resulting in net proceeds to the Company of
$118.6 million to facilitate a balance sheet repositioning.$140.4 million of securities impairment related to the repositioning was recognized in pre-tax earnings. - Subsequent to quarter-end:
- Sold
$1.0 billion of debt securities with a weighted average yield of1.58% , and a weighted average life of 5.6 years. - Purchased
$589.8 million of debt securities, with a weighted average yield of4.65% , and paid in full$418.7 million of Bank Term Funding Program borrowings with a weighted average cost of4.77% . - The estimated earn back period for the securities losses is 4.5 years.
- Sold
- Recognized a net loss for the quarter of
$95.7 million , or$(6.05) per diluted common share, reflecting the effects of the capital raise and balance sheet repositioning. Adjusted earnings were$9.1 million 2, or$0.58 2 per diluted common share, which included a$1.2 million fraud loss related to a single incident. - Net interest margin (tax equivalent) expanded 10 basis points ("bps") to
2.51% .2 - Annualized loan growth of
3.9% . - Noninterest bearing deposits increased
4.0% from the linked quarter. - Nonperforming assets ratio improved 8 bps to
0.39% ; classified loans declined$14.5 million to$134.8 million ; net charge-off ratio was0.16% .
CEO Commentary
Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, "Our successful common equity capital raise and balance sheet repositioning are significant, transformational steps towards our goal of creating a high performing company. We were pleased with the market receptivity of the oversubscribed common equity offering and the balance sheet repositioning financial results exceeded our communicated expectations. We are appreciative of our existing and new shareholders who supported this transformation and our team who executed the strategy so well.”
Mr. Reeves continued, "We also kept our eye on the ball during the quarter, delivering positive results in a number of strategic initiatives. Our deposit franchise continues to show its strength as deposit costs rose minimally and our treasury management investments led to
_________________________
1Third Quarter Summary compares to the second quarter of 2024 (the "linked quarter") unless noted.
2Non-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 | Nine Months Ended | ||||||||||||||||||
(Dollars in thousands, except per share amounts and as noted) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
Financial Results | |||||||||||||||||||
Revenue | $ | (92,867 | ) | $ | 57,901 | $ | 44,436 | $ | 9,515 | $ | 126,174 | ||||||||
Credit loss expense | 1,535 | 1,267 | 1,551 | 7,491 | 4,081 | ||||||||||||||
Noninterest expense | 35,798 | 35,761 | 31,544 | 107,124 | 99,782 | ||||||||||||||
Net (loss) income | (95,707 | ) | 15,819 | 9,138 | (76,619 | ) | 18,129 | ||||||||||||
Adjusted earnings(1) | 9,141 | 8,132 | 8,875 | 21,762 | 28,046 | ||||||||||||||
Per Common Share | |||||||||||||||||||
Diluted (loss) earnings per share | $ | (6.05 | ) | $ | 1.00 | $ | 0.58 | $ | (4.86 | ) | $ | 1.15 | |||||||
Adjusted earnings per share(1) | 0.58 | 0.52 | 0.56 | 1.38 | 1.79 | ||||||||||||||
Book value | 27.06 | 34.44 | 32.21 | 27.06 | 32.21 | ||||||||||||||
Tangible book value(1) | 22.43 | 28.27 | 26.60 | 22.43 | 26.60 | ||||||||||||||
Balance Sheet & Credit Quality | |||||||||||||||||||
Loans In millions | $ | 4,328.8 | $ | 4,287.2 | $ | 4,066.0 | $ | 4,328.8 | $ | 4,066.0 | |||||||||
Investment securities In millions | 1,623.1 | 1,824.1 | 1,958.5 | 1,623.1 | 1,958.5 | ||||||||||||||
Deposits In millions | 5,368.7 | 5,412.4 | 5,363.3 | 5,368.7 | 5,363.3 | ||||||||||||||
Net loan charge-offs In millions | 1.7 | 0.5 | 0.5 | 2.4 | 1.7 | ||||||||||||||
Allowance for credit losses ratio | 1.25 | % | 1.26 | % | 1.27 | % | 1.25 | % | 1.27 | % | |||||||||
Selected Ratios | |||||||||||||||||||
Return on average assets | (5.78 | )% | 0.95 | % | 0.56 | % | (1.54 | )% | 0.37 | % | |||||||||
Net interest margin, tax equivalent(1) | 2.51 | % | 2.41 | % | 2.35 | % | 2.42 | % | 2.54 | % | |||||||||
Return on average equity | (69.05 | )% | 11.91 | % | 7.14 | % | (19.03 | )% | 4.81 | % | |||||||||
Return on average tangible equity(1) | (82.78 | )% | 15.74 | % | 9.68 | % | (22.17 | )% | 7.03 | % | |||||||||
Efficiency ratio(1) | 70.32 | % | 56.29 | % | 66.06 | % | 65.20 | % | 66.40 | % | |||||||||
(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 | |||||||||||||
3Q24 vs | 3Q24 vs | ||||||||||||||
(Dollars in thousands) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | ||||||||||
Net interest income | $ | 37,521 | $ | 36,347 | $ | 34,575 | 3 | % | 9 | % | |||||
Noninterest (loss) income | (130,388 | ) | 21,554 | 9,861 | n/m | n/m | |||||||||
Total revenue, net of interest expense | $ | (92,867 | ) | $ | 57,901 | $ | 44,436 | n/m | n/m | ||||||
(n/m) - Not meaningful |
Total revenue for the third quarter of 2024 decreased
Net interest income of
The Company's tax equivalent net interest margin was
The Company's tax equivalent net interest margin was
_________________________
3 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
Noninterest (Loss) Income | Change | Change | |||||||||||||
3Q24 vs | 3Q24 vs | ||||||||||||||
(In thousands) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | ||||||||||
Investment services and trust activities | $ | 3,410 | $ | 3,504 | $ | 3,004 | (3 | )% | 14 | % | |||||
Service charges and fees | 2,170 | 2,156 | 2,146 | 1 | % | 1 | % | ||||||||
Card revenue | 1,935 | 1,907 | 1,817 | 1 | % | 6 | % | ||||||||
Loan revenue | 760 | 1,525 | 1,462 | (50 | )% | (48 | )% | ||||||||
Bank-owned life insurance | 879 | 668 | 626 | 32 | % | 40 | % | ||||||||
Investment securities (losses) gains, net | (140,182 | ) | 33 | 79 | n/m | n/m | |||||||||
Other | 640 | 11,761 | 727 | (95 | )% | (12 | )% | ||||||||
Total noninterest (loss) income | $ | (130,388 | ) | $ | 21,554 | $ | 9,861 | n/m | n/m | ||||||
MSR adjustment (included above in Loan revenue) | $ | (1,026 | ) | $ | 129 | $ | 283 | n/m | n/m | ||||||
Gain on branch sale (included above in Other) | — | 11,056 | — | n/m | n/m | ||||||||||
(n/m) - Not meaningful |
Noninterest income for the third quarter of 2024 decreased
Noninterest income for the third quarter of 2024 decreased
EXPENSE REVIEW
Noninterest Expense | Change | Change | ||||||||||||
3Q24 vs | 3Q24 vs | |||||||||||||
(In thousands) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
Compensation and employee benefits | $ | 19,943 | $ | 20,985 | $ | 18,558 | (5 | )% | 7 | % | ||||
Occupancy expense of premises, net | 2,443 | 2,435 | 2,405 | — | % | 2 | % | |||||||
Equipment | 2,486 | 2,530 | 2,123 | (2 | )% | 17 | % | |||||||
Legal and professional | 2,261 | 2,253 | 1,678 | — | % | 35 | % | |||||||
Data processing | 1,580 | 1,645 | 1,504 | (4 | )% | 5 | % | |||||||
Marketing | 619 | 636 | 782 | (3 | )% | (21 | )% | |||||||
Amortization of intangibles | 1,470 | 1,593 | 1,460 | (8 | )% | 1 | % | |||||||
FDIC insurance | 923 | 1,051 | 783 | (12 | )% | 18 | % | |||||||
Communications | 159 | 191 | 206 | (17 | )% | (23 | )% | |||||||
Foreclosed assets, net | 330 | 138 | 2 | 139 | % | n/m | ||||||||
Other | 3,584 | 2,304 | 2,043 | 56 | % | 75 | % | |||||||
Total noninterest expense | $ | 35,798 | $ | 35,761 | $ | 31,544 | — | % | 13 | % | ||||
(n/m) - Not meaningful |
Merger-related Expenses | ||||||||
(In thousands) | 3Q24 | 2Q24 | 3Q23 | |||||
Compensation and employee benefits | $ | — | $ | 73 | $ | — | ||
Occupancy expense of premises, net | — | — | — | |||||
Equipment | — | 28 | — | |||||
Legal and professional | 127 | 462 | 11 | |||||
Data processing | — | 251 | — | |||||
Marketing | — | — | — | |||||
Communications | — | 8 | — | |||||
Other | 6 | 32 | — | |||||
Total merger-related expenses | $ | 133 | $ | 854 | $ | 11 |
Noninterest expense for the third quarter of 2024 compared to the linked quarter was stable at
Noninterest expense for the third quarter of 2024 increased
The Company's effective tax rate was
BALANCE SHEET REVIEW
Total assets were
Loans Held for Investment | September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||
Balance | % of Total | Balance | % of Total | Balance | % of Total | ||||||||||
(Dollars in thousands) | |||||||||||||||
Commercial and industrial | $ | 1,149,758 | 26.6 | % | $ | 1,120,983 | 26.1 | % | $ | 1,078,773 | 26.5 | % | |||
Agricultural | 112,696 | 2.6 | 107,983 | 2.5 | 111,950 | 2.8 | |||||||||
Commercial real estate | |||||||||||||||
Construction and development | 386,920 | 8.9 | 351,646 | 8.2 | 331,868 | 8.2 | |||||||||
Farmland | 182,164 | 4.2 | 183,641 | 4.3 | 182,621 | 4.5 | |||||||||
Multifamily | 409,544 | 9.5 | 430,054 | 10.0 | 337,509 | 8.3 | |||||||||
Other | 1,353,513 | 31.2 | 1,348,515 | 31.5 | 1,324,019 | 32.5 | |||||||||
Total commercial real estate | 2,332,141 | 53.8 | 2,313,856 | 54.0 | 2,176,017 | 53.5 | |||||||||
Residential real estate | |||||||||||||||
One-to-four family first liens | 485,210 | 11.2 | 492,541 | 11.5 | 456,771 | 11.2 | |||||||||
One-to-four family junior liens | 176,827 | 4.1 | 176,105 | 4.1 | 173,275 | 4.3 | |||||||||
Total residential real estate | 662,037 | 15.3 | 668,646 | 15.6 | 630,046 | 15.5 | |||||||||
Consumer | 72,124 | 1.7 | 75,764 | 1.8 | 69,183 | 1.7 | |||||||||
Loans held for investment, net of unearned income | $ | 4,328,756 | 100.0 | % | $ | 4,287,232 | 100.0 | % | $ | 4,065,969 | 100.0 | % | |||
Total commitments to extend credit | $ | 1,149,815 | $ | 1,200,605 | $ | 1,251,345 |
Loans held for investment, net of unearned income, increased
Loans held for investment, net of unearned income, increased
Investment Securities | September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||
Available for sale | $ | 1,623,104 | 100.0 | % | $ | 771,034 | 42.3 | % | $ | 872,770 | 44.6 | % | |||
Held to maturity | — | — | % | 1,053,080 | 57.7 | % | 1,085,751 | 55.4 | % | ||||||
Total investment securities | $ | 1,623,104 | $ | 1,824,114 | $ | 1,958,521 |
Investment securities at September 30, 2024 were
Deposits | September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||
Noninterest bearing deposits | $ | 917,715 | 17.1 | % | $ | 882,472 | 16.3 | % | $ | 924,213 | 17.2 | % | |||
Interest checking deposits | 1,230,605 | 23.0 | 1,284,243 | 23.7 | 1,334,481 | 24.9 | |||||||||
Money market deposits | 1,038,575 | 19.3 | 1,043,376 | 19.3 | 1,127,287 | 21.0 | |||||||||
Savings deposits | 768,298 | 14.3 | 745,639 | 13.8 | 619,805 | 11.6 | |||||||||
Time deposits of | 844,298 | 15.7 | 803,301 | 14.8 | 703,646 | 13.1 | |||||||||
Total core deposits | 4,799,491 | 89.4 | 4,759,031 | 87.9 | 4,709,432 | 87.8 | |||||||||
Brokered time deposits | 200,000 | 3.7 | 196,000 | 3.6 | 220,063 | 4.1 | |||||||||
Time deposits over | 369,236 | 6.9 | 457,388 | 8.5 | 433,829 | 8.1 | |||||||||
Total deposits | $ | 5,368,727 | 100.0 | % | $ | 5,412,419 | 100.0 | % | $ | 5,363,324 | 100.0 | % |
Total deposits declined
Borrowed Funds | September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||
Short-term borrowings | $ | 410,630 | 78.1 | % | $ | 414,684 | 78.3 | % | $ | 373,956 | 75.0 | % | |||
Long-term debt | 115,051 | 21.9 | % | 114,839 | 21.7 | % | 124,526 | 25.0 | % | ||||||
Total borrowed funds | $ | 525,681 | $ | 529,523 | $ | 498,482 |
Borrowed funds were
Capital | September 30, | June 30, | September 30, | ||||||||
(Dollars in thousands) | 2024 (1) | 2024 | 2023 | ||||||||
Total shareholders' equity | $ | 562,238 | $ | 543,286 | $ | 505,411 | |||||
Accumulated other comprehensive loss | (58,842 | ) | (58,135 | ) | (84,606 | ) | |||||
MidWestOne Financial Group, Inc. Consolidated | |||||||||||
Tier 1 leverage to average assets ratio | 8.78 | % | 8.29 | % | 8.58 | % | |||||
Common equity tier 1 capital to risk-weighted assets ratio | 9.91 | % | 9.56 | % | 9.52 | % | |||||
Tier 1 capital to risk-weighted assets ratio | 10.70 | % | 10.35 | % | 10.31 | % | |||||
Total capital to risk-weighted assets ratio | 12.96 | % | 12.62 | % | 12.45 | % | |||||
MidWestOne Bank | |||||||||||
Tier 1 leverage to average assets ratio | 9.69 | % | 9.24 | % | 9.51 | % | |||||
Common equity tier 1 capital to risk-weighted assets ratio | 11.83 | % | 11.55 | % | 11.43 | % | |||||
Tier 1 capital to risk-weighted assets ratio | 11.83 | % | 11.55 | % | 11.43 | % | |||||
Total capital to risk-weighted assets ratio | 12.88 | % | 12.61 | % | 12.36 | % | |||||
(1) Regulatory capital ratios for September 30, 2024 are preliminary |
Total shareholders' equity at September 30, 2024 increased
On October 23, 2024, the Board of Directors of the Company declared a cash dividend of
No common shares were repurchased by the Company during the period June 30, 2024 through September 30, 2024 or for the subsequent period through October 24, 2024. The current share repurchase program allows for the repurchase of up to
CREDIT QUALITY REVIEW
Credit Quality | As of or For the Three Months Ended | ||||||||||
September 30, | June 30, | September 30, | |||||||||
(Dollars in thousands) | 2024 | 2024 | 2023 | ||||||||
Credit loss expense related to loans | $ | 1,835 | $ | 467 | $ | 1,651 | |||||
Net charge-offs | 1,735 | 524 | 451 | ||||||||
Allowance for credit losses | 54,000 | 53,900 | 51,600 | ||||||||
Pass | $ | 4,016,683 | $ | 3,991,692 | $ | 3,785,908 | |||||
Special Mention / Watch | 177,241 | 146,253 | 163,222 | ||||||||
Classified | 134,832 | 149,287 | 116,839 | ||||||||
Loans greater than 30 days past due and accruing | $ | 11,940 | $ | 9,358 | $ | 6,449 | |||||
Nonperforming loans | $ | 21,954 | $ | 25,128 | $ | 28,987 | |||||
Nonperforming assets | 25,537 | 31,181 | 28,987 | ||||||||
Net charge-off ratio(1) | 0.16 | % | 0.05 | % | 0.04 | % | |||||
Classified loans ratio(2) | 3.11 | % | 3.48 | % | 2.87 | % | |||||
Nonperforming loans ratio(3) | 0.51 | % | 0.59 | % | 0.71 | % | |||||
Nonperforming assets ratio(4) | 0.39 | % | 0.47 | % | 0.45 | % | |||||
Allowance for credit losses ratio(5) | 1.25 | % | 1.26 | % | 1.27 | % | |||||
Allowance for credit losses to nonaccrual loans ratio(6) | 260.84 | % | 218.26 | % | 178.63 | % | |||||
(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 and nonperforming assets ratios each declined 8 bps, to
As of September 30, 2024, the allowance for credit losses was
Nonperforming Loans Roll Forward | Nonaccrual | 90+ Days Past Due & Still Accruing | Total | ||||||||
(Dollars in thousands) | |||||||||||
Balance at June 30, 2024 | $ | 24,695 | $ | 433 | $ | 25,128 | |||||
Loans placed on nonaccrual or 90+ days past due & still accruing | 6,426 | 1,326 | 7,752 | ||||||||
Proceeds related to repayment or sale | (7,761 | ) | (1 | ) | (7,762 | ) | |||||
Loans returned to accrual status or no longer past due | (500 | ) | (339 | ) | (839 | ) | |||||
Charge-offs | (1,609 | ) | (167 | ) | (1,776 | ) | |||||
Transfers to foreclosed assets | (549 | ) | — | (549 | ) | ||||||
Balance at September 30, 2024 | $ | 20,702 | $ | 1,252 | $ | 21,954 |
CONFERENCE CALL DETAILS
The Company will host a conference call for investors at 11:00 a.m. CT on Friday, October 25, 2024. To participate, you may pre-register for this call utilizing the following link: https://www.netroadshow.com/events/login?show=e1a9f566&confId=71942.
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 019041 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 23, 2025 by calling 1-866-813-9403 and using the replay access code of 718549. 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, 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 the recent sale of our Florida banking operations and the acquisition of DNVB), 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 changes in 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, and any changes in response to the 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 ongoing conflict in the Middle East 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, including those 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 that resulted in recent bank failures; and (27) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.
MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
(In thousands) | 2024 | 2024 | 2024 | 2023 | 2023 | ||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 72,173 | $ | 66,228 | $ | 68,430 | $ | 76,237 | $ | 71,015 | |||||||||
Interest earning deposits in banks | 129,695 | 35,340 | 29,328 | 5,479 | 3,773 | ||||||||||||||
Federal funds sold | — | — | 4 | 11 | — | ||||||||||||||
Total cash and cash equivalents | 201,868 | 101,568 | 97,762 | 81,727 | 74,788 | ||||||||||||||
Debt securities available for sale at fair value | 1,623,104 | 771,034 | 797,230 | 795,134 | 872,770 | ||||||||||||||
Held to maturity securities at amortized cost | — | 1,053,080 | 1,064,939 | 1,075,190 | 1,085,751 | ||||||||||||||
Total securities | 1,623,104 | 1,824,114 | 1,862,169 | 1,870,324 | 1,958,521 | ||||||||||||||
Loans held for sale | 3,283 | 2,850 | 2,329 | 1,045 | 2,528 | ||||||||||||||
Gross loans held for investment | 4,344,559 | 4,304,619 | 4,433,258 | 4,138,352 | 4,078,060 | ||||||||||||||
Unearned income, net | (15,803 | ) | (17,387 | ) | (18,612 | ) | (11,405 | ) | (12,091 | ) | |||||||||
Loans held for investment, net of unearned income | 4,328,756 | 4,287,232 | 4,414,646 | 4,126,947 | 4,065,969 | ||||||||||||||
Allowance for credit losses | (54,000 | ) | (53,900 | ) | (55,900 | ) | (51,500 | ) | (51,600 | ) | |||||||||
Total loans held for investment, net | 4,274,756 | 4,233,332 | 4,358,746 | 4,075,447 | 4,014,369 | ||||||||||||||
Premises and equipment, net | 90,750 | 91,793 | 95,986 | 85,742 | 85,589 | ||||||||||||||
Goodwill | 69,788 | 69,388 | 71,118 | 62,477 | 62,477 | ||||||||||||||
Other intangible assets, net | 26,469 | 27,939 | 29,531 | 24,069 | 25,510 | ||||||||||||||
Foreclosed assets, net | 3,583 | 6,053 | 3,897 | 3,929 | — | ||||||||||||||
Other assets | 258,881 | 224,621 | 226,477 | 222,780 | 244,036 | ||||||||||||||
Total assets | $ | 6,552,482 | $ | 6,581,658 | $ | 6,748,015 | $ | 6,427,540 | $ | 6,467,818 | |||||||||
LIABILITIES | |||||||||||||||||||
Noninterest bearing deposits | $ | 917,715 | $ | 882,472 | $ | 920,764 | $ | 897,053 | $ | 924,213 | |||||||||
Interest bearing deposits | 4,451,012 | 4,529,947 | 4,664,472 | 4,498,620 | 4,439,111 | ||||||||||||||
Total deposits | 5,368,727 | 5,412,419 | 5,585,236 | 5,395,673 | 5,363,324 | ||||||||||||||
Short-term borrowings | 410,630 | 414,684 | 422,988 | 300,264 | 373,956 | ||||||||||||||
Long-term debt | 115,051 | 114,839 | 122,066 | 123,296 | 124,526 | ||||||||||||||
Other liabilities | 95,836 | 96,430 | 89,685 | 83,929 | 100,601 | ||||||||||||||
Total liabilities | 5,990,244 | 6,038,372 | 6,219,975 | 5,903,162 | 5,962,407 | ||||||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||||||||
Common stock | 21,580 | 16,581 | 16,581 | 16,581 | 16,581 | ||||||||||||||
Additional paid-in capital | 414,965 | 300,831 | 300,845 | 302,157 | 301,889 | ||||||||||||||
Retained earnings | 206,490 | 306,030 | 294,066 | 294,784 | 295,862 | ||||||||||||||
Treasury stock | (21,955 | ) | (22,021 | ) | (22,648 | ) | (24,245 | ) | (24,315 | ) | |||||||||
Accumulated other comprehensive loss | (58,842 | ) | (58,135 | ) | (60,804 | ) | (64,899 | ) | (84,606 | ) | |||||||||
Total shareholders' equity | 562,238 | 543,286 | 528,040 | 524,378 | 505,411 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 6,552,482 | $ | 6,581,658 | $ | 6,748,015 | $ | 6,427,540 | $ | 6,467,818 |
MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
(In thousands, except per | September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||
share data) | 2024 | 2024 | 2024 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||||
Interest income | ||||||||||||||||||||||||
Loans, including fees | $ | 62,521 | $ | 61,643 | $ | 57,947 | $ | 54,093 | $ | 51,870 | $ | 182,111 | $ | 148,086 | ||||||||||
Taxable investment securities | 8,779 | 9,228 | 9,460 | 9,274 | 9,526 | 27,467 | 29,704 | |||||||||||||||||
Tax-exempt investment securities | 1,611 | 1,663 | 1,710 | 1,789 | 1,802 | 4,984 | 5,751 | |||||||||||||||||
Other | 785 | 242 | 418 | 230 | 374 | 1,445 | 686 | |||||||||||||||||
Total interest income | 73,696 | 72,776 | 69,535 | 65,386 | 63,572 | 216,007 | 184,227 | |||||||||||||||||
Interest expense | ||||||||||||||||||||||||
Deposits | 29,117 | 28,942 | 27,726 | 27,200 | 23,128 | 85,785 | 58,564 | |||||||||||||||||
Short-term borrowings | 5,043 | 5,409 | 4,975 | 3,496 | 3,719 | 15,427 | 7,623 | |||||||||||||||||
Long-term debt | 2,015 | 2,078 | 2,103 | 2,131 | 2,150 | 6,196 | 6,427 | |||||||||||||||||
Total interest expense | 36,175 | 36,429 | 34,804 | 32,827 | 28,997 | 107,408 | 72,614 | |||||||||||||||||
Net interest income | 37,521 | 36,347 | 34,731 | 32,559 | 34,575 | 108,599 | 111,613 | |||||||||||||||||
Credit loss expense | 1,535 | 1,267 | 4,689 | 1,768 | 1,551 | 7,491 | 4,081 | |||||||||||||||||
Net interest income after credit loss expense | 35,986 | 35,080 | 30,042 | 30,791 | 33,024 | 101,108 | 107,532 | |||||||||||||||||
Noninterest income | ||||||||||||||||||||||||
Investment services and trust activities | 3,410 | 3,504 | 3,503 | 3,193 | 3,004 | 10,417 | 9,056 | |||||||||||||||||
Service charges and fees | 2,170 | 2,156 | 2,144 | 2,148 | 2,146 | 6,470 | 6,201 | |||||||||||||||||
Card revenue | 1,935 | 1,907 | 1,943 | 1,802 | 1,817 | 5,785 | 5,412 | |||||||||||||||||
Loan revenue | 760 | 1,525 | 856 | 909 | 1,462 | 3,141 | 3,791 | |||||||||||||||||
Bank-owned life insurance | 879 | 668 | 660 | 656 | 626 | 2,207 | 1,844 | |||||||||||||||||
Investment securities (losses) gains, net | (140,182 | ) | 33 | 36 | (5,696 | ) | 79 | (140,113 | ) | (13,093 | ) | |||||||||||||
Other | 640 | 11,761 | 608 | 850 | 727 | 13,009 | 1,350 | |||||||||||||||||
Total noninterest (loss) income | (130,388 | ) | 21,554 | 9,750 | 3,862 | 9,861 | (99,084 | ) | 14,561 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||||||
Compensation and employee benefits | 19,943 | 20,985 | 20,930 | 17,859 | 18,558 | 61,858 | 58,551 | |||||||||||||||||
Occupancy expense of premises, net | 2,443 | 2,435 | 2,813 | 2,309 | 2,405 | 7,691 | 7,725 | |||||||||||||||||
Equipment | 2,486 | 2,530 | 2,600 | 2,466 | 2,123 | 7,616 | 6,729 | |||||||||||||||||
Legal and professional | 2,261 | 2,253 | 2,059 | 2,269 | 1,678 | 6,573 | 5,096 | |||||||||||||||||
Data processing | 1,580 | 1,645 | 1,360 | 1,411 | 1,504 | 4,585 | 4,388 | |||||||||||||||||
Marketing | 619 | 636 | 598 | 700 | 782 | 1,853 | 2,910 | |||||||||||||||||
Amortization of intangibles | 1,470 | 1,593 | 1,637 | 1,441 | 1,460 | 4,700 | 4,806 | |||||||||||||||||
FDIC insurance | 923 | 1,051 | 942 | 900 | 783 | 2,916 | 2,394 | |||||||||||||||||
Communications | 159 | 191 | 196 | 183 | 206 | 546 | 727 | |||||||||||||||||
Foreclosed assets, net | 330 | 138 | 358 | 45 | 2 | 826 | (32 | ) | ||||||||||||||||
Other | 3,584 | 2,304 | 2,072 | 2,548 | 2,043 | 7,960 | 6,488 | |||||||||||||||||
Total noninterest expense | 35,798 | 35,761 | 35,565 | 32,131 | 31,544 | 107,124 | 99,782 | |||||||||||||||||
(Loss) income before income tax expense | (130,200 | ) | 20,873 | 4,227 | 2,522 | 11,341 | (105,100 | ) | 22,311 | |||||||||||||||
Income tax (benefit) expense | (34,493 | ) | 5,054 | 958 | (208 | ) | 2,203 | (28,481 | ) | 4,182 | ||||||||||||||
Net (loss) income | $ | (95,707 | ) | $ | 15,819 | $ | 3,269 | $ | 2,730 | $ | 9,138 | $ | (76,619 | ) | $ | 18,129 | ||||||||
Earnings (loss) per common share | ||||||||||||||||||||||||
Basic | $ | (6.05 | ) | $ | 1.00 | $ | 0.21 | $ | 0.17 | $ | 0.58 | $ | (4.86 | ) | $ | 1.16 | ||||||||
Diluted | $ | (6.05 | ) | $ | 1.00 | $ | 0.21 | $ | 0.17 | $ | 0.58 | $ | (4.86 | ) | $ | 1.15 | ||||||||
Weighted average basic common shares outstanding | 15,829 | 15,763 | 15,723 | 15,693 | 15,689 | 15,772 | 15,673 | |||||||||||||||||
Weighted average diluted common shares outstanding | 15,829 | 15,781 | 15,774 | 15,756 | 15,711 | 15,772 | 15,696 | |||||||||||||||||
Dividends paid per common share | $ | 0.2425 | $ | 0.2425 | $ | 0.2425 | $ | 0.2425 | $ | 0.2425 | $ | 0.7275 | $ | 0.7275 |
MIDWESTONE FINANCIAL GROUP, INC.
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) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
Earnings: | |||||||||||||||||||
Net interest income | $ | 37,521 | $ | 36,347 | $ | 34,575 | $ | 108,599 | $ | 111,613 | |||||||||
Noninterest (loss) income | (130,388 | ) | 21,554 | 9,861 | (99,084 | ) | 14,561 | ||||||||||||
Total revenue, net of interest expense | (92,867 | ) | 57,901 | 44,436 | 9,515 | 126,174 | |||||||||||||
Credit loss expense | 1,535 | 1,267 | 1,551 | 7,491 | 4,081 | ||||||||||||||
Noninterest expense | 35,798 | 35,761 | 31,544 | 107,124 | 99,782 | ||||||||||||||
(Loss) income before income tax expense | (130,200 | ) | 20,873 | 11,341 | (105,100 | ) | 22,311 | ||||||||||||
Income tax (benefit) expense | (34,493 | ) | 5,054 | 2,203 | (28,481 | ) | 4,182 | ||||||||||||
Net (loss) income | $ | (95,707 | ) | $ | 15,819 | $ | 9,138 | $ | (76,619 | ) | $ | 18,129 | |||||||
Adjusted earnings(1) | $ | 9,141 | $ | 8,132 | $ | 8,875 | $ | 21,762 | $ | 28,046 | |||||||||
Per Share Data: | |||||||||||||||||||
Diluted (loss) earnings | $ | (6.05 | ) | $ | 1.00 | $ | 0.58 | $ | (4.86 | ) | $ | 1.15 | |||||||
Adjusted earnings(1) | 0.58 | 0.52 | 0.56 | 1.38 | 1.79 | ||||||||||||||
Book value | 27.06 | 34.44 | 32.21 | 27.06 | 32.21 | ||||||||||||||
Tangible book value(1) | 22.43 | 28.27 | 26.60 | 22.43 | 26.60 | ||||||||||||||
Ending Balance Sheet: | |||||||||||||||||||
Total assets | $ | 6,552,482 | $ | 6,581,658 | $ | 6,467,818 | $ | 6,552,482 | $ | 6,467,818 | |||||||||
Loans held for investment, net of unearned income | 4,328,756 | 4,287,232 | 4,065,969 | 4,328,756 | 4,065,969 | ||||||||||||||
Total securities | 1,623,104 | 1,824,114 | 1,958,521 | 1,623,104 | 1,958,521 | ||||||||||||||
Total deposits | 5,368,727 | 5,412,419 | 5,363,324 | 5,368,727 | 5,363,324 | ||||||||||||||
Short-term borrowings | 410,630 | 414,684 | 373,956 | 410,630 | 373,956 | ||||||||||||||
Long-term debt | 115,051 | 114,839 | 124,526 | 115,051 | 124,526 | ||||||||||||||
Total shareholders' equity | 562,238 | 543,286 | 505,411 | 562,238 | 505,411 | ||||||||||||||
Average Balance Sheet: | |||||||||||||||||||
Average total assets | $ | 6,583,404 | $ | 6,713,573 | $ | 6,452,815 | $ | 6,643,897 | $ | 6,480,636 | |||||||||
Average total loans | 4,311,693 | 4,419,697 | 4,019,852 | 4,343,087 | 3,964,119 | ||||||||||||||
Average total deposits | 5,402,634 | 5,514,924 | 5,379,871 | 5,465,993 | 5,459,749 | ||||||||||||||
Financial Ratios: | |||||||||||||||||||
Return on average assets | (5.78 | )% | 0.95 | % | 0.56 | % | (1.54 | )% | 0.37 | % | |||||||||
Return on average equity | (69.05 | )% | 11.91 | % | 7.14 | % | (19.03 | )% | 4.81 | % | |||||||||
Return on average tangible equity(1) | (82.78 | )% | 15.74 | % | 9.68 | % | (22.17 | )% | 7.03 | % | |||||||||
Efficiency ratio(1) | 70.32 | % | 56.29 | % | 66.06 | % | 65.20 | % | 66.40 | % | |||||||||
Net interest margin, tax equivalent(1) | 2.51 | % | 2.41 | % | 2.35 | % | 2.42 | % | 2.54 | % | |||||||||
Loans to deposits ratio | 80.63 | % | 79.21 | % | 75.81 | % | 80.63 | % | 75.81 | % | |||||||||
Common equity ratio | 8.58 | % | 8.25 | % | 7.81 | % | 8.58 | % | 7.81 | % | |||||||||
Tangible common equity ratio(1) | 7.22 | % | 6.88 | % | 6.54 | % | 7.22 | % | 6.54 | % | |||||||||
Credit Risk Profile: | |||||||||||||||||||
Total nonperforming loans | $ | 21,954 | $ | 25,128 | $ | 28,987 | $ | 21,954 | $ | 28,987 | |||||||||
Nonperforming loans ratio | 0.51 | % | 0.59 | % | 0.71 | % | 0.51 | % | 0.71 | % | |||||||||
Total nonperforming assets | $ | 25,537 | $ | 31,181 | $ | 28,987 | $ | 25,537 | $ | 28,987 | |||||||||
Nonperforming assets ratio | 0.39 | % | 0.47 | % | 0.45 | % | 0.39 | % | 0.45 | % | |||||||||
Net charge-offs | $ | 1,735 | $ | 524 | $ | 451 | $ | 2,448 | $ | 1,681 | |||||||||
Net charge-off ratio | 0.16 | % | 0.05 | % | 0.04 | % | 0.08 | % | 0.06 | % | |||||||||
Allowance for credit losses | $ | 54,000 | $ | 53,900 | $ | 51,600 | $ | 54,000 | $ | 51,600 | |||||||||
Allowance for credit losses ratio | 1.25 | % | 1.26 | % | 1.27 | % | 1.25 | % | 1.27 | % | |||||||||
Allowance for credit losses to nonaccrual ratio | 260.84 | % | 218.26 | % | 178.63 | % | 260.84 | % | 178.63 | % | |||||||||
(1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. |
MIDWESTONE FINANCIAL GROUP, INC.
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
Three Months Ended | ||||||||||||||||||||||||||
September 30, 2024 | June 30, 2024 | September 30, 2023 | ||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest Income/ Expense | Average Yield/ Cost | Average Balance | Interest Income/ Expense | Average Yield/ Cost | Average Balance | Interest Income/ Expense | Average Yield/ Cost | |||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Loans, including fees (1)(2)(3) | $ | 4,311,693 | $ | 63,472 | 5.86 | % | $ | 4,419,697 | $ | 62,581 | 5.69 | % | $ | 4,019,852 | $ | 52,605 | 5.19 | % | ||||||||
Taxable investment securities | 1,489,843 | 8,779 | 2.34 | % | 1,520,253 | 9,228 | 2.44 | % | 1,637,259 | 9,526 | 2.31 | % | ||||||||||||||
Tax-exempt investment securities (2)(4) | 313,935 | 1,976 | 2.50 | % | 322,092 | 2,040 | 2.55 | % | 341,330 | 2,234 | 2.60 | % | ||||||||||||||
Total securities held for investment(2) | 1,803,778 | 10,755 | 2.37 | % | 1,842,345 | 11,268 | 2.46 | % | 1,978,589 | 11,760 | 2.36 | % | ||||||||||||||
Other | 52,054 | 785 | 6.00 | % | 20,452 | 242 | 4.76 | % | 34,195 | 374 | 4.34 | % | ||||||||||||||
Total interest earning assets(2) | $ | 6,167,525 | $ | 75,012 | 4.84 | % | $ | 6,282,494 | $ | 74,091 | 4.74 | % | $ | 6,032,636 | $ | 64,739 | 4.26 | % | ||||||||
Other assets | 415,879 | 431,079 | 420,179 | |||||||||||||||||||||||
Total assets | $ | 6,583,404 | $ | 6,713,573 | $ | 6,452,815 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Interest checking deposits | $ | 1,243,327 | $ | 3,041 | 0.97 | % | $ | 1,297,356 | $ | 3,145 | 0.97 | % | $ | 1,354,597 | $ | 2,179 | 0.64 | % | ||||||||
Money market deposits | 1,047,081 | 7,758 | 2.95 | % | 1,072,688 | 7,821 | 2.93 | % | 1,112,149 | 7,402 | 2.64 | % | ||||||||||||||
Savings deposits | 761,922 | 3,128 | 1.63 | % | 738,773 | 2,673 | 1.46 | % | 603,628 | 749 | 0.49 | % | ||||||||||||||
Time deposits | 1,430,723 | 15,190 | 4.22 | % | 1,470,956 | 15,303 | 4.18 | % | 1,403,504 | 12,798 | 3.62 | % | ||||||||||||||
Total interest bearing deposits | 4,483,053 | 29,117 | 2.58 | % | 4,579,773 | 28,942 | 2.54 | % | 4,473,878 | 23,128 | 2.05 | % | ||||||||||||||
Securities sold under agreements to repurchase | 5,812 | 12 | 0.82 | % | 5,300 | 10 | 0.76 | % | 66,020 | 85 | 0.51 | % | ||||||||||||||
Other short-term borrowings | 415,961 | 5,031 | 4.81 | % | 442,546 | 5,399 | 4.91 | % | 277,713 | 3,634 | 5.19 | % | ||||||||||||||
Total short-term borrowings | 421,773 | 5,043 | 4.76 | % | 447,846 | 5,409 | 4.86 | % | 343,733 | 3,719 | 4.29 | % | ||||||||||||||
Long-term debt | 116,032 | 2,015 | 6.91 | % | 120,256 | 2,078 | 6.95 | % | 125,737 | 2,150 | 6.78 | % | ||||||||||||||
Total borrowed funds | 537,805 | 7,058 | 5.22 | % | 568,102 | 7,487 | 5.30 | % | 469,470 | 5,869 | 4.96 | % | ||||||||||||||
Total interest bearing liabilities | $ | 5,020,858 | $ | 36,175 | 2.87 | % | $ | 5,147,875 | $ | 36,429 | 2.85 | % | $ | 4,943,348 | $ | 28,997 | 2.33 | % | ||||||||
Noninterest bearing deposits | 919,581 | 935,151 | 905,993 | |||||||||||||||||||||||
Other liabilities | 91,551 | 96,553 | 95,408 | |||||||||||||||||||||||
Shareholders’ equity | 551,414 | 533,994 | 508,066 | |||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,583,404 | $ | 6,713,573 | $ | 6,452,815 | ||||||||||||||||||||
Net interest income(2) | $ | 38,837 | $ | 37,662 | $ | 35,742 | ||||||||||||||||||||
Net interest spread(2) | 1.97 | % | 1.89 | % | 1.93 | % | ||||||||||||||||||||
Net interest margin(2) | 2.51 | % | 2.41 | % | 2.35 | % | ||||||||||||||||||||
Total deposits(5) | $ | 5,402,634 | $ | 29,117 | 2.14 | % | $ | 5,514,924 | $ | 28,942 | 2.11 | % | $ | 5,379,871 | $ | 23,128 | 1.71 | % | ||||||||
Cost of funds(6) | 2.42 | % | 2.41 | % | 1.97 | % | ||||||||||||||||||||
(1) Average balance includes nonaccrual loans. | ||||||||||||||||||||||||||
(2) Tax equivalent. The federal statutory tax rate utilized was | ||||||||||||||||||||||||||
(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were | ||||||||||||||||||||||||||
(4) Interest income includes tax equivalent adjustments of | ||||||||||||||||||||||||||
(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.
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
Nine Months Ended | |||||||||||||||||
September 30, 2024 | September 30, 2023 | ||||||||||||||||
(Dollars in thousands) | Average Balance | Interest Income/ Expense | Average Yield/ Cost | Average Balance | Interest Income/ Expense | Average Yield/ Cost | |||||||||||
ASSETS | |||||||||||||||||
Loans, including fees (1)(2)(3) | $ | 4,343,087 | $ | 184,920 | 5.69 | % | $ | 3,964,119 | $ | 150,250 | 5.07 | % | |||||
Taxable investment securities | 1,522,447 | 27,467 | 2.41 | % | 1,714,912 | 29,704 | 2.32 | % | |||||||||
Tax-exempt investment securities (2)(4) | 321,560 | 6,113 | 2.54 | % | 361,254 | 7,136 | 2.64 | % | |||||||||
Total securities held for investment(2) | 1,844,007 | 33,580 | 2.43 | % | 2,076,166 | 36,840 | 2.37 | % | |||||||||
Other | 34,435 | 1,445 | 5.61 | % | 22,741 | 686 | 4.03 | % | |||||||||
Total interest earning assets(2) | $ | 6,221,529 | $ | 219,945 | 4.72 | % | $ | 6,063,026 | $ | 187,776 | 4.14 | % | |||||
Other assets | 422,368 | 417,610 | |||||||||||||||
Total assets | $ | 6,643,897 | $ | 6,480,636 | |||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||
Interest checking deposits | $ | 1,280,581 | $ | 9,076 | 0.95 | % | $ | 1,429,804 | $ | 5,999 | 0.56 | % | |||||
Money market deposits | 1,074,006 | 23,644 | 2.94 | % | 1,014,708 | 15,970 | 2.10 | % | |||||||||
Savings deposits | 731,724 | 7,848 | 1.43 | % | 620,011 | 1,309 | 0.28 | % | |||||||||
Time deposits | 1,449,485 | 45,217 | 4.17 | % | 1,437,122 | 35,286 | 3.28 | % | |||||||||
Total interest bearing deposits | 4,535,796 | 85,785 | 2.53 | % | 4,501,645 | 58,564 | 1.74 | % | |||||||||
Securities sold under agreements to repurchase | 5,482 | 33 | 0.80 | % | 123,512 | 958 | 1.04 | % | |||||||||
Other short-term borrowings | 422,653 | 15,394 | 4.87 | % | 174,448 | 6,665 | 5.11 | % | |||||||||
Total short-term borrowings | 428,135 | 15,427 | 4.81 | % | 297,960 | 7,623 | 3.42 | % | |||||||||
Long-term debt | 119,837 | 6,196 | 6.91 | % | 133,375 | 6,427 | 6.44 | % | |||||||||
Total borrowed funds | 547,972 | 21,623 | 5.27 | % | 431,335 | 14,050 | 4.36 | % | |||||||||
Total interest bearing liabilities | $ | 5,083,768 | $ | 107,408 | 2.82 | % | $ | 4,932,980 | $ | 72,614 | 1.97 | % | |||||
Noninterest bearing deposits | 930,197 | 958,104 | |||||||||||||||
Other liabilities | 92,235 | 85,650 | |||||||||||||||
Shareholders’ equity | 537,697 | 503,902 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,643,897 | $ | 6,480,636 | |||||||||||||
Net interest income(2) | $ | 112,537 | $ | 115,162 | |||||||||||||
Net interest spread(2) | 1.90 | % | 2.17 | % | |||||||||||||
Net interest margin(2) | 2.42 | % | 2.54 | % | |||||||||||||
Total deposits(5) | $ | 5,465,993 | $ | 85,785 | 2.10 | % | $ | 5,459,749 | $ | 58,564 | 1.43 | % | |||||
Cost of funds(6) | 2.39 | % | 1.65 | % | |||||||||||||
(1) Average balance includes nonaccrual loans. | |||||||||||||||||
(2) Tax equivalent. The federal statutory tax rate utilized was | |||||||||||||||||
(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were | |||||||||||||||||
(4) Interest income includes tax equivalent adjustments of | |||||||||||||||||
(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, adjusted earnings, and adjusted earnings per share. 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) | 2024 | 2024 | 2024 | 2023 | 2023 | |||||||||||||||
Total shareholders’ equity | $ | 562,238 | $ | 543,286 | $ | 528,040 | $ | 524,378 | $ | 505,411 | ||||||||||
Intangible assets, net | (96,257 | ) | (97,327 | ) | (100,649 | ) | (86,546 | ) | (87,987 | ) | ||||||||||
Tangible common equity | $ | 465,981 | $ | 445,959 | $ | 427,391 | $ | 437,832 | $ | 417,424 | ||||||||||
Total assets | $ | 6,552,482 | $ | 6,581,658 | $ | 6,748,015 | $ | 6,427,540 | $ | 6,467,818 | ||||||||||
Intangible assets, net | (96,257 | ) | (97,327 | ) | (100,649 | ) | (86,546 | ) | (87,987 | ) | ||||||||||
Tangible assets | $ | 6,456,225 | $ | 6,484,331 | $ | 6,647,366 | $ | 6,340,994 | $ | 6,379,831 | ||||||||||
Book value per share | $ | 27.06 | $ | 34.44 | $ | 33.53 | $ | 33.41 | $ | 32.21 | ||||||||||
Tangible book value per share(1) | $ | 22.43 | $ | 28.27 | $ | 27.14 | $ | 27.90 | $ | 26.60 | ||||||||||
Shares outstanding | 20,774,919 | 15,773,468 | 15,750,471 | 15,694,306 | 15,691,738 | |||||||||||||||
Common equity ratio | 8.58 | % | 8.25 | % | 7.83 | % | 8.16 | % | 7.81 | % | ||||||||||
Tangible common equity ratio(2) | 7.22 | % | 6.88 | % | 6.43 | % | 6.90 | % | 6.54 | % | ||||||||||
(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) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
Net (loss) income | $ | (95,707 | ) | $ | 15,819 | $ | 9,138 | $ | (76,619 | ) | $ | 18,129 | ||||||||
Intangible amortization, net of tax(1) | 1,090 | 1,195 | 1,095 | 3,487 | 3,605 | |||||||||||||||
Tangible net (loss) income | $ | (94,617 | ) | $ | 17,014 | $ | 10,233 | $ | (73,132 | ) | $ | 21,734 | ||||||||
Average shareholders’ equity | $ | 551,414 | $ | 533,994 | $ | 508,066 | $ | 537,697 | $ | 503,902 | ||||||||||
Average intangible assets, net | (96,706 | ) | (99,309 | ) | (88,699 | ) | (97,102 | ) | (90,308 | ) | ||||||||||
Average tangible equity | $ | 454,708 | $ | 434,685 | $ | 419,367 | $ | 440,595 | $ | 413,594 | ||||||||||
Return on average equity | (69.05 | )% | 11.91 | % | 7.14 | % | (19.03 | )% | 4.81 | % | ||||||||||
Return on average tangible equity(2) | (82.78 | )% | 15.74 | % | 9.68 | % | (22.17 | )% | 7.03 | % | ||||||||||
(1) The income tax rate utilized was the blended marginal tax rate. | ||||||||||||||||||||
(2) Annualized tangible net income divided by average tangible equity. |
Net Interest Margin, Tax Equivalent/ Core Net Interest Margin | Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
(Dollars in thousands) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
Net interest income | $ | 37,521 | $ | 36,347 | $ | 34,575 | $ | 108,599 | $ | 111,613 | ||||||||||
Tax equivalent adjustments: | ||||||||||||||||||||
Loans(1) | 951 | 938 | 735 | 2,809 | 2,164 | |||||||||||||||
Securities(1) | 365 | 377 | 432 | 1,129 | 1,385 | |||||||||||||||
Net interest income, tax equivalent | $ | 38,837 | $ | 37,662 | $ | 35,742 | $ | 112,537 | $ | 115,162 | ||||||||||
Loan purchase discount accretion | (1,426 | ) | (1,261 | ) | (791 | ) | (3,839 | ) | (2,964 | ) | ||||||||||
Core net interest income | $ | 37,411 | $ | 36,401 | $ | 34,951 | $ | 108,698 | $ | 112,198 | ||||||||||
Net interest margin | 2.42 | % | 2.33 | % | 2.27 | % | 2.33 | % | 2.46 | % | ||||||||||
Net interest margin, tax equivalent(2) | 2.51 | % | 2.41 | % | 2.35 | % | 2.42 | % | 2.54 | % | ||||||||||
Core net interest margin(3) | 2.41 | % | 2.33 | % | 2.30 | % | 2.33 | % | 2.47 | % | ||||||||||
Average interest earning assets | $ | 6,167,525 | $ | 6,282,494 | $ | 6,032,636 | $ | 6,221,529 | $ | 6,063,026 | ||||||||||
(1) The federal statutory tax rate utilized was | ||||||||||||||||||||
(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) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
Loan interest income, including fees | $ | 62,521 | $ | 61,643 | $ | 51,870 | $ | 182,111 | $ | 148,086 | ||||||||||
Tax equivalent adjustment(1) | 951 | 938 | 735 | 2,809 | 2,164 | |||||||||||||||
Tax equivalent loan interest income | $ | 63,472 | $ | 62,581 | $ | 52,605 | $ | 184,920 | $ | 150,250 | ||||||||||
Loan purchase discount accretion | (1,426 | ) | (1,261 | ) | (791 | ) | (3,839 | ) | (2,964 | ) | ||||||||||
Core loan interest income | $ | 62,046 | $ | 61,320 | $ | 51,814 | $ | 181,081 | $ | 147,286 | ||||||||||
Yield on loans | 5.77 | % | 5.61 | % | 5.12 | % | 5.60 | % | 4.99 | % | ||||||||||
Yield on loans, tax equivalent(2) | 5.86 | % | 5.69 | % | 5.19 | % | 5.69 | % | 5.07 | % | ||||||||||
Core yield on loans(3) | 5.72 | % | 5.58 | % | 5.11 | % | 5.57 | % | 4.97 | % | ||||||||||
Average loans | $ | 4,311,693 | $ | 4,419,697 | $ | 4,019,852 | $ | 4,343,087 | $ | 3,964,119 | ||||||||||
(1) The federal statutory tax rate utilized was | ||||||||||||||||||||
(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) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
Total noninterest expense | $ | 35,798 | $ | 35,761 | $ | 31,544 | $ | 107,124 | $ | 99,782 | ||||||||||
Amortization of intangibles | (1,470 | ) | (1,593 | ) | (1,460 | ) | (4,700 | ) | (4,806 | ) | ||||||||||
Merger-related expenses | (133 | ) | (854 | ) | (11 | ) | (2,301 | ) | (147 | ) | ||||||||||
Noninterest expense used for efficiency ratio | $ | 34,195 | $ | 33,314 | $ | 30,073 | $ | 100,123 | $ | 94,829 | ||||||||||
Net interest income, tax equivalent(1) | $ | 38,837 | $ | 37,662 | $ | 35,742 | $ | 112,537 | $ | 115,162 | ||||||||||
Plus: Noninterest (loss) income | (130,388 | ) | 21,554 | 9,861 | (99,084 | ) | 14,561 | |||||||||||||
Less: Investment securities (losses) gains, net | (140,182 | ) | 33 | 79 | (140,113 | ) | (13,093 | ) | ||||||||||||
Net revenues used for efficiency ratio | $ | 48,631 | $ | 59,183 | $ | 45,524 | $ | 153,566 | $ | 142,816 | ||||||||||
Efficiency ratio (2) | 70.32 | % | 56.29 | % | 66.06 | % | 65.20 | % | 66.40 | % | ||||||||||
(1) The federal statutory tax rate utilized was | ||||||||||||||||||||
(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) | 2024 | 2024 | 2023 | 2024 | 2023 | |||||||||||||
Net (loss) income | $ | (95,707 | ) | $ | 15,819 | $ | 9,138 | $ | (76,619 | ) | $ | 18,129 | ||||||
Less: Investment securities (losses) gains, net of tax(1) | (103,988 | ) | 24 | 59 | (103,937 | ) | (9,820 | ) | ||||||||||
Less: Mortgage servicing rights (loss) gain, net of tax(1) | (761 | ) | 96 | 212 | (938 | ) | 13 | |||||||||||
Plus: Merger-related expenses, net of tax(1) | 99 | 634 | 8 | 1,707 | 110 | |||||||||||||
Less: Gain on branch sale, net of tax(1) | — | 8,201 | — | 8,201 | — | |||||||||||||
Adjusted earnings | $ | 9,141 | $ | 8,132 | $ | 8,875 | $ | 21,762 | $ | 28,046 | ||||||||
Weighted average diluted common shares outstanding | 15,829 | 15,781 | 15,711 | 15,772 | 15,696 | |||||||||||||
Earnings per common share - diluted | $ | (6.05 | ) | $ | 1.00 | $ | 0.58 | $ | (4.86 | ) | $ | 1.15 | ||||||
Adjusted earnings per common share(2) | $ | 0.58 | $ | 0.52 | $ | 0.56 | $ | 1.38 | $ | 1.79 | ||||||||
(1) The income tax rate utilized was the blended marginal tax rate. | ||||||||||||||||||
(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 |
FAQ
What was MidWestOne Financial Group's (MOFG) net loss in Q3 2024?
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