MidWestOne Financial Group, Inc. Reports Financial Results for the First Quarter of 2024
- Net income of $3.3 million, or $0.21 per diluted common share.
- Revenue of $44.5 million, comprised of net interest income of $34.7 million and noninterest income of $9.8 million.
- Credit loss expense of $4.7 million, including a day 1 credit loss expense of $3.2 million related to the DNVB acquisition.
- 11 bps expansion in net interest margin to 2.33%.
- Annualized adjusted loan growth of 8%.
- CEO Chip Reeves highlighted successful integration of Denver Bankshares and strategic realignment initiatives.
- Continued momentum in wealth management with revenue growth of 10%.
- Noninterest expense increased $3.4 million from the linked quarter, driven by higher compensation and merger-related expenses.
- Nonperforming loans and nonperforming assets ratios remained stable, with slight increases from the previous quarter.
- Credit loss expense of $4.7 million reflected day 1 credit loss expense related to the DNVB acquisition and reserves for organic loan growth.
Insights
MidWestOne Financial Group's acquisition of Denver Bankshares, inclusive of a core banking system conversion and office closure, creates both immediate financial implications and strategic considerations for investors. Notably, the reported net income of
The
From an expense viewpoint, the noninterest expense increase of
Investors should take note of the company's momentum in Wealth Management with a reported revenue growth of
While the nonperforming assets ratio has remained stable at
Furthermore, the planned divestiture in Florida, expected to close in June 2024, suggests a strategic re-alignment that could potentially optimize the company's asset mix and concentrate on more profitable markets. This should be seen as a strategic move to streamline operations and focus on areas with the strongest growth prospects.
The relatively low net charge-off ratio of
However, the acquisition introduces
In assessing the credit quality, the special mention/watch list's increase by
IOWA CITY, Iowa, April 25, 2024 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported results for the first quarter of 2024.
First Quarter 2024 Summary1
- Completed acquisition of Denver Bankshares, Inc. ("DNVB"), the related core banking system conversion, and closure of the legacy MidWestOne Denver banking office.
- Net income of
$3.3 million , or$0.21 per diluted common share.- Revenue was
$44.5 million , comprised of net interest income of$34.7 million and noninterest income of$9.8 million , which included a negative MSR valuation adjustment of$368 thousand . - Credit loss expense of
$4.7 million , which included day 1 credit loss expense of$3.2 million related to the DNVB acquisition. - Noninterest Expense of
$35.6 million , which included merger-related costs of$1.3 million , OREO write-down expense of$311 thousand , and non-acquisition related severance expense of$261 thousand .
- Revenue was
- Net interest margin (tax equivalent) expanded 11 bps to
2.33% 2. - Annualized adjusted loan growth (excluding acquired DNVB loan balances) of
8% . - Continued momentum in Wealth Management with revenue growth of
10% . - Nonperforming assets ratio remained stable at
0.49% ; net charge-off ratio was0.02% .
CEO Commentary
Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, “We are very pleased with the underlying strength of the first quarter as we continue to execute on our strategic initiatives. During the quarter we closed and integrated Denver Bankshares, the front end of our geographic realignment announced in late September 2023, and our Florida divestiture remains on track for a June 2024 closing.
Importantly, our net interest margin expanded this quarter, rising 11 bps, with net interest income increasing
In Commercial Banking and Wealth Management, our customer and banker acquisition strategies led to robust balance sheet, assets under management, and revenue gains, and we will continue to invest in these critical business lines. Even amidst significant talent, platform, and product investments, we have been able to re-allocate resources to maintain expense discipline.
We welcome our new Bank of Denver team members, and I am proud of our entire MidWestOne team for their commitment to our customers and execution of our strategic plan."
__________________________________ 1 First Quarter Summary compares to the fourth quarter of 2023 (the "linked quarter") 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 | ||||||||||||
(Dollars in thousands, except per share amounts and as noted) | March 31, | December 31, | March 31, | |||||||||
2024 | 2023 | 2023 | ||||||||||
Financial Results | ||||||||||||
Revenue | $ | 44,481 | $ | 36,421 | $ | 36,030 | ||||||
Credit loss expense | 4,689 | 1,768 | 933 | |||||||||
Noninterest expense | 35,565 | 32,131 | 33,319 | |||||||||
Net income | 3,269 | 2,730 | 1,397 | |||||||||
Per Common Share | ||||||||||||
Diluted earnings per share | $ | 0.21 | $ | 0.17 | $ | 0.09 | ||||||
Book value | 33.53 | 33.41 | 31.94 | |||||||||
Tangible book value(1) | 27.14 | 27.90 | 26.13 | |||||||||
Balance Sheet & Credit Quality | ||||||||||||
Loans In millions | $ | 4,414.6 | $ | 4,126.9 | $ | 3,919.4 | ||||||
Investment securities In millions | 1,862.2 | 1,870.3 | 2,071.8 | |||||||||
Deposits In millions | 5,585.2 | 5,395.7 | 5,555.2 | |||||||||
Net loan charge-offs In millions | 0.2 | 2.1 | 0.3 | |||||||||
Allowance for credit losses ratio | 1.27 | % | 1.25 | % | 1.27 | % | ||||||
Selected Ratios | ||||||||||||
Return on average assets | 0.20 | % | 0.17 | % | 0.09 | % | ||||||
Net interest margin, tax equivalent(1) | 2.33 | % | 2.22 | % | 2.75 | % | ||||||
Return on average equity | 2.49 | % | 2.12 | % | 1.14 | % | ||||||
Return on average tangible equity(1) | 4.18 | % | 3.57 | % | 2.70 | % | ||||||
Efficiency ratio(1) | 71.28 | % | 70.16 | % | 62.32 | % | ||||||
(1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. |
DENVER BANKSHARES, INC. ACQUISITION
On January 31, 2024, we completed our acquisition of Denver Bankshares, Inc, and its wholly-owned banking subsidiary, the Bank of Denver. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of the January 31, 2024 acquisition date, net of any applicable tax effects. The Company considers all purchase accounting estimates provisional and fair values are subject to refinement for up to one year after the close date.
The table below summarizes the amounts recognized at the acquisition date for each major class of assets acquired and liabilities assumed:
(In thousands) | As of January 31, 2024 | |||
Merger consideration | ||||
Cash consideration | $ | 32,600 | ||
Identifiable net assets acquired, at fair value | ||||
Assets acquired | ||||
Cash and due from banks | 462 | |||
Interest earning deposits in banks | 3,517 | |||
Debt securities | 52,493 | |||
Loans held for investment | 207,095 | |||
Premises and equipment | 13,470 | |||
Core deposit intangible | 7,100 | |||
Other assets | 4,987 | |||
Total assets acquired | 289,124 | |||
Liabilities assumed | ||||
Deposits | (224,248 | ) | ||
Short-term borrowings | (37,500 | ) | ||
Other liabilities | (3,417 | ) | ||
Total liabilities assumed | (265,165 | ) | ||
Identifiable net assets acquired, at fair value | 23,959 | |||
Goodwill | $ | 8,641 |
REVENUE REVIEW
Revenue | Change | Change | ||||||||||||||
1Q24 vs | 1Q24 vs | |||||||||||||||
(Dollars in thousands) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||
Net interest income | $ | 34,731 | $ | 32,559 | $ | 40,076 | 7 | % | (13 | )% | ||||||
Noninterest income | 9,750 | 3,862 | (4,046 | ) | 152 | % | n/m | |||||||||
Total revenue, net of interest expense | $ | 44,481 | $ | 36,421 | $ | 36,030 | 22 | % | 23 | % | ||||||
Results are not meaningful (n/m) |
Total revenue for the first quarter of 2024 increased
Net interest income of
The Company's tax equivalent net interest margin was
The Company's tax equivalent net interest margin was
Noninterest Income (Loss) | Change | Change | ||||||||||||||||
1Q24 vs | 1Q24 vs | |||||||||||||||||
(In thousands) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||||
Investment services and trust activities | $ | 3,503 | $ | 3,193 | $ | 2,933 | 10 | % | 19 | % | ||||||||
Service charges and fees | 2,144 | 2,148 | 2,008 | — | % | 7 | % | |||||||||||
Card revenue | 1,943 | 1,802 | 1,748 | 8 | % | 11 | % | |||||||||||
Loan revenue | 856 | 909 | 1,420 | (6 | )% | (40 | )% | |||||||||||
Bank-owned life insurance | 660 | 656 | 602 | 1 | % | 10 | % | |||||||||||
Investment securities gains (losses), net | 36 | (5,696 | ) | (13,170 | ) | n/m | n/m | |||||||||||
Other | 608 | 850 | 413 | (28 | )% | 47 | % | |||||||||||
Total noninterest income (loss) | $ | 9,750 | $ | 3,862 | $ | (4,046 | ) | 152 | % | n/m | ||||||||
MSR Valuation Adjustment (included in loan revenue) | (368 | ) | (105 | ) | 315 | 250 | % | (217 | )% | |||||||||
Results are not meaningful (n/m) | ||||||||||||||||||
______________________________________ 3 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. |
Noninterest income for the first quarter of 2024 increased
Noninterest income for the first quarter of 2024 increased
EXPENSE REVIEW
Noninterest Expense | Change | Change | ||||||||||||||
1Q24 vs | 1Q24 vs | |||||||||||||||
(In thousands) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||||
Compensation and employee benefits | $ | 20,930 | $ | 17,859 | $ | 19,607 | 17 | % | 7 | % | ||||||
Occupancy expense of premises, net | 2,813 | 2,309 | 2,746 | 22 | % | 2 | % | |||||||||
Equipment | 2,600 | 2,466 | 2,171 | 5 | % | 20 | % | |||||||||
Legal and professional | 2,059 | 2,269 | 1,736 | (9 | )% | 19 | % | |||||||||
Data processing | 1,360 | 1,411 | 1,363 | (4 | )% | — | % | |||||||||
Marketing | 598 | 700 | 986 | (15 | )% | (39 | )% | |||||||||
Amortization of intangibles | 1,637 | 1,441 | 1,752 | 14 | % | (7 | )% | |||||||||
FDIC insurance | 942 | 900 | 749 | 5 | % | 26 | % | |||||||||
Communications | 196 | 183 | 261 | 7 | % | (25 | )% | |||||||||
Foreclosed assets, net | 358 | 45 | (28 | ) | 696 | % | n/m | |||||||||
Other | 2,072 | 2,548 | 1,976 | (19 | )% | 5 | % | |||||||||
Total noninterest expense | $ | 35,565 | $ | 32,131 | $ | 33,319 | 11 | % | 7 | % | ||||||
Results are not meaningful (n/m) |
Merger-related Expenses | |||||||||
(In thousands) | 1Q24 | 4Q23 | 1Q23 | ||||||
Compensation and employee benefits | $ | 241 | $ | — | $ | 70 | |||
Occupancy expense of premises, net | 152 | — | — | ||||||
Equipment | 149 | — | — | ||||||
Legal and professional | 573 | 180 | — | ||||||
Data processing | 61 | — | 65 | ||||||
Marketing | 32 | 38 | — | ||||||
Communications | 1 | — | — | ||||||
Other | 105 | 27 | 1 | ||||||
Total merger-related expenses | $ | 1,314 | $ | 245 | $ | 136 |
Noninterest expense for the first quarter of 2024 increased
Noninterest expense for the first quarter of 2024 increased
The Company's effective tax rate was
BALANCE SHEET REVIEW
Total assets were
Loans Held for Investment | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | ||||||||||
Commercial and industrial | $ | 1,105,718 | 25.0 | % | $ | 1,075,003 | 26.0 | % | $ | 1,080,514 | 27.6 | % | ||||
Agricultural | 113,029 | 2.6 | 118,414 | 2.9 | 106,641 | 2.7 | ||||||||||
Commercial real estate | ||||||||||||||||
Construction and development | 403,571 | 9.1 | 323,195 | 7.8 | 320,924 | 8.2 | ||||||||||
Farmland | 184,109 | 4.2 | 184,955 | 4.5 | 182,528 | 4.7 | ||||||||||
Multifamily | 409,504 | 9.3 | 383,178 | 9.3 | 255,065 | 6.5 | ||||||||||
Other | 1,440,645 | 32.7 | 1,333,982 | 32.4 | 1,290,454 | 33.0 | ||||||||||
Total commercial real estate | 2,437,829 | 55.3 | 2,225,310 | 54.0 | 2,048,971 | 52.4 | ||||||||||
Residential real estate | ||||||||||||||||
One-to-four family first liens | 495,408 | 11.2 | 459,798 | 11.1 | 448,459 | 11.4 | ||||||||||
One-to-four family junior liens | 182,001 | 4.1 | 180,639 | 4.4 | 162,403 | 4.1 | ||||||||||
Total residential real estate | 677,409 | 15.3 | 640,437 | 15.5 | 610,862 | 15.5 | ||||||||||
Consumer | 80,661 | 1.8 | 67,783 | 1.6 | 72,377 | 1.8 | ||||||||||
Loans held for investment, net of unearned income | $ | 4,414,646 | 100.0 | % | $ | 4,126,947 | 100.0 | % | $ | 3,919,365 | 100.0 | % | ||||
Total commitments to extend credit | $ | 1,230,612 | $ | 1,210,796 | $ | 1,205,902 |
Loans held for investment, net of unearned income, increased
Investment Securities | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | ||||||||||
Available for sale | $ | 797,230 | 42.8 | % | $ | 795,134 | 42.5 | % | $ | 954,074 | 46.1 | % | ||||
Held to maturity | 1,064,939 | 57.2 | % | 1,075,190 | 57.5 | % | 1,117,709 | 53.9 | % | |||||||
Total investment securities | $ | 1,862,169 | $ | 1,870,324 | $ | 2,071,783 |
Investment securities at March 31, 2024 were
Deposits | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | ||||||||||
Noninterest bearing deposits | $ | 920,764 | 16.5 | % | $ | 897,053 | 16.6 | % | $ | 989,469 | 17.8 | % | ||||
Interest checking deposits | 1,349,823 | 24.2 | 1,320,435 | 24.5 | 1,476,948 | 26.6 | ||||||||||
Money market deposits | 1,122,717 | 20.1 | 1,105,493 | 20.5 | 969,238 | 17.4 | ||||||||||
Savings deposits | 728,276 | 13.0 | 650,655 | 12.1 | 631,811 | 11.4 | ||||||||||
Time deposits of | 787,851 | 14.1 | 752,214 | 13.9 | 599,302 | 10.8 | ||||||||||
Total core deposits | 4,909,431 | 87.9 | 4,725,850 | 87.6 | 4,666,768 | 84.0 | ||||||||||
Brokered time deposits | 205,000 | 3.7 | 221,039 | 4.1 | 366,539 | 6.6 | ||||||||||
Time deposits over | 470,805 | 8.4 | 448,784 | 8.3 | 521,846 | 9.4 | ||||||||||
Total deposits | $ | 5,585,236 | 100.0 | % | $ | 5,395,673 | 100.0 | % | $ | 5,555,153 | 100.0 | % |
Deposits increased
Borrowed Funds | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | ||||||||||
Short-term borrowings | $ | 422,988 | 77.6 | % | $ | 300,264 | 70.9 | % | $ | 143,981 | 51.1 | % | ||||
Long-term debt | 122,066 | 22.4 | % | 123,296 | 29.1 | % | 137,981 | 48.9 | % | |||||||
Total borrowed funds | $ | 545,054 | $ | 423,560 | $ | 281,962 |
Borrowed funds were
Capital | March 31, | December 31, | March 31, | |||||||||
(Dollars in thousands) | 2024(1) | 2023 | 2023 | |||||||||
Total shareholders' equity | $ | 528,040 | $ | 524,378 | $ | 500,650 | ||||||
Accumulated other comprehensive loss | (60,804 | ) | (64,899 | ) | (78,885 | ) | ||||||
MidWestOne Financial Group, Inc. Consolidated | ||||||||||||
Tier 1 leverage to average assets ratio | 8.16 | % | 8.58 | % | 8.30 | % | ||||||
Common equity tier 1 capital to risk-weighted assets ratio | 8.98 | % | 9.59 | % | 9.39 | % | ||||||
Tier 1 capital to risk-weighted assets ratio | 9.75 | % | 10.38 | % | 10.18 | % | ||||||
Total capital to risk-weighted assets ratio | 11.97 | % | 12.53 | % | 12.31 | % | ||||||
MidWestOne Bank | ||||||||||||
Tier 1 leverage to average assets ratio | 9.36 | % | 9.39 | % | 9.28 | % | ||||||
Common equity tier 1 capital to risk-weighted assets ratio | 11.20 | % | 11.54 | % | 11.40 | % | ||||||
Tier 1 capital to risk-weighted assets ratio | 11.20 | % | 11.54 | % | 11.40 | % | ||||||
Total capital to risk-weighted assets ratio | 12.25 | % | 12.49 | % | 12.31 | % | ||||||
(1) Regulatory capital ratios for March 31, 2024 are preliminary |
Total shareholders' equity at March 31, 2024 increased
Accumulated other comprehensive loss at March 31, 2024 decreased
On April 25, 2024, the Board of Directors of the Company declared a cash dividend of
No common shares were repurchased by the Company during the period December 31, 2023 through March 31, 2024 or for the subsequent period through April 25, 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 | |||||||||||
March 31, | December 31, | March 31, | ||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | |||||||||
Credit loss expense related to loans | $ | 4,589 | $ | 1,968 | $ | 933 | ||||||
Net charge-offs | 189 | 2,068 | 333 | |||||||||
Allowance for credit losses | 55,900 | 51,500 | 49,800 | |||||||||
Pass | $ | 4,098,102 | $ | 3,846,012 | $ | 3,728,522 | ||||||
Special Mention / Watch | 152,604 | 113,029 | 92,075 | |||||||||
Classified | 163,940 | 167,906 | 98,768 | |||||||||
Loans greater than 30 days past due and accruing | $ | 8,772 | $ | 10,778 | $ | 4,932 | ||||||
Nonperforming loans | $ | 29,267 | $ | 26,359 | $ | 14,442 | ||||||
Nonperforming assets | 33,164 | 30,288 | 14,442 | |||||||||
Net charge-off ratio(1) | 0.02 | % | 0.20 | % | 0.03 | % | ||||||
Classified loans ratio(2) | 3.71 | % | 4.07 | % | 2.52 | % | ||||||
Nonperforming loans ratio(3) | 0.66 | % | 0.64 | % | 0.37 | % | ||||||
Nonperforming assets ratio(4) | 0.49 | % | 0.47 | % | 0.23 | % | ||||||
Allowance for credit losses ratio(5) | 1.27 | % | 1.25 | % | 1.27 | % | ||||||
Allowance for credit losses to nonaccrual loans ratio(6) | 197.53 | % | 198.91 | % | 344.88 | % | ||||||
(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 remained stable, with slight increases in both ratios of 2 bps, to
As of March 31, 2024, the allowance for credit losses was
Nonperforming Loans Roll Forward (Dollars in thousands) | Nonaccrual | 90+ Days Past Due & Still Accruing | Total | |||||||||
Balance at December 31, 2023 | $ | 25,891 | $ | 468 | $ | 26,359 | ||||||
Loans placed on nonaccrual or 90+ days past due & still accruing | 3,509 | 1,034 | 4,543 | |||||||||
Acquired loan portfolio | 6 | 164 | 170 | |||||||||
Proceeds related to repayment or sale | (306 | ) | (1 | ) | (307 | ) | ||||||
Loans returned to accrual status or no longer past due | (352 | ) | (293 | ) | (645 | ) | ||||||
Charge-offs | (183 | ) | (353 | ) | (536 | ) | ||||||
Transfers to foreclosed assets | (265 | ) | (16 | ) | (281 | ) | ||||||
Transfer to nonaccrual | — | (36 | ) | (36 | ) | |||||||
Balance at March 31, 2024 | $ | 28,300 | $ | 967 | $ | 29,267 |
CONFERENCE CALL DETAILS
The Company will host a conference call for investors at 11:00 a.m. CT on Friday, April 26, 2024. To participate, you may pre-register for this call utilizing the following link: https://www.netroadshow.com/events/login?show=0114d1d0&confId=63215. 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 891090 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until July 25, 2024 by calling 1-866-813-9403 and using the replay access code of 561214. 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 the sale of our Florida branches and the recent 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 significant increases in inflation and interest rates since 2020, 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
MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
(In thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 68,430 | $ | 76,237 | $ | 71,015 | $ | 75,955 | $ | 63,945 | ||||||||||
Interest earning deposits in banks | 29,328 | 5,479 | 3,773 | 68,603 | 5,273 | |||||||||||||||
Federal funds sold | 4 | 11 | — | — | — | |||||||||||||||
Total cash and cash equivalents | 97,762 | 81,727 | 74,788 | 144,558 | 69,218 | |||||||||||||||
Debt securities available for sale at fair value | 797,230 | 795,134 | 872,770 | 903,520 | 954,074 | |||||||||||||||
Held to maturity securities at amortized cost | 1,064,939 | 1,075,190 | 1,085,751 | 1,099,569 | 1,117,709 | |||||||||||||||
Total securities | 1,862,169 | 1,870,324 | 1,958,521 | 2,003,089 | 2,071,783 | |||||||||||||||
Loans held for sale | 2,329 | 1,045 | 2,528 | 2,821 | 2,553 | |||||||||||||||
Gross loans held for investment | 4,433,258 | 4,138,352 | 4,078,060 | 4,031,377 | 3,932,900 | |||||||||||||||
Unearned income, net | (18,612 | ) | (11,405 | ) | (12,091 | ) | (12,728 | ) | (13,535 | ) | ||||||||||
Loans held for investment, net of unearned income | 4,414,646 | 4,126,947 | 4,065,969 | 4,018,649 | 3,919,365 | |||||||||||||||
Allowance for credit losses | (55,900 | ) | (51,500 | ) | (51,600 | ) | (50,400 | ) | (49,800 | ) | ||||||||||
Total loans held for investment, net | 4,358,746 | 4,075,447 | 4,014,369 | 3,968,249 | 3,869,565 | |||||||||||||||
Premises and equipment, net | 95,986 | 85,742 | 85,589 | 85,831 | 86,208 | |||||||||||||||
Goodwill | 71,118 | 62,477 | 62,477 | 62,477 | 62,477 | |||||||||||||||
Other intangible assets, net | 29,531 | 24,069 | 25,510 | 26,969 | 28,563 | |||||||||||||||
Foreclosed assets, net | 3,897 | 3,929 | — | — | — | |||||||||||||||
Other assets | 226,477 | 222,780 | 244,036 | 227,495 | 219,585 | |||||||||||||||
Total assets | $ | 6,748,015 | $ | 6,427,540 | $ | 6,467,818 | $ | 6,521,489 | $ | 6,409,952 | ||||||||||
LIABILITIES | ||||||||||||||||||||
Noninterest bearing deposits | $ | 920,764 | $ | 897,053 | $ | 924,213 | $ | 897,923 | $ | 989,469 | ||||||||||
Interest bearing deposits | 4,664,472 | 4,498,620 | 4,439,111 | 4,547,524 | 4,565,684 | |||||||||||||||
Total deposits | 5,585,236 | 5,395,673 | 5,363,324 | 5,445,447 | 5,555,153 | |||||||||||||||
Short-term borrowings | 422,988 | 300,264 | 373,956 | 362,054 | 143,981 | |||||||||||||||
Long-term debt | 122,066 | 123,296 | 124,526 | 125,752 | 137,981 | |||||||||||||||
Other liabilities | 89,685 | 83,929 | 100,601 | 86,895 | 72,187 | |||||||||||||||
Total liabilities | 6,219,975 | 5,903,162 | 5,962,407 | 6,020,148 | 5,909,302 | |||||||||||||||
SHAREHOLDERS' EQUITY | ||||||||||||||||||||
Common stock | 16,581 | 16,581 | 16,581 | 16,581 | 16,581 | |||||||||||||||
Additional paid-in capital | 300,845 | 302,157 | 301,889 | 301,424 | 300,966 | |||||||||||||||
Retained earnings | 294,066 | 294,784 | 295,862 | 290,548 | 286,767 | |||||||||||||||
Treasury stock | (22,648 | ) | (24,245 | ) | (24,315 | ) | (24,508 | ) | (24,779 | ) | ||||||||||
Accumulated other comprehensive loss | (60,804 | ) | (64,899 | ) | (84,606 | ) | (82,704 | ) | (78,885 | ) | ||||||||||
Total shareholders' equity | 528,040 | 524,378 | 505,411 | 501,341 | 500,650 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 6,748,015 | $ | 6,427,540 | $ | 6,467,818 | $ | 6,521,489 | $ | 6,409,952 |
MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended | ||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
(In thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||
Interest income | ||||||||||||||||||
Loans, including fees | $ | 57,947 | $ | 54,093 | $ | 51,870 | $ | 49,726 | $ | 46,490 | ||||||||
Taxable investment securities | 9,460 | 9,274 | 9,526 | 9,734 | 10,444 | |||||||||||||
Tax-exempt investment securities | 1,710 | 1,789 | 1,802 | 1,822 | 2,127 | |||||||||||||
Other | 418 | 230 | 374 | 68 | 244 | |||||||||||||
Total interest income | 69,535 | 65,386 | 63,572 | 61,350 | 59,305 | |||||||||||||
Interest expense | ||||||||||||||||||
Deposits | 27,726 | 27,200 | 23,128 | 20,117 | 15,319 | |||||||||||||
Short-term borrowings | 4,975 | 3,496 | 3,719 | 2,118 | 1,786 | |||||||||||||
Long-term debt | 2,103 | 2,131 | 2,150 | 2,153 | 2,124 | |||||||||||||
Total interest expense | 34,804 | 32,827 | 28,997 | 24,388 | 19,229 | |||||||||||||
Net interest income | 34,731 | 32,559 | 34,575 | 36,962 | 40,076 | |||||||||||||
Credit loss expense | 4,689 | 1,768 | 1,551 | 1,597 | 933 | |||||||||||||
Net interest income after credit loss expense | 30,042 | 30,791 | 33,024 | 35,365 | 39,143 | |||||||||||||
Noninterest income (loss) | ||||||||||||||||||
Investment services and trust activities | 3,503 | 3,193 | 3,004 | 3,119 | 2,933 | |||||||||||||
Service charges and fees | 2,144 | 2,148 | 2,146 | 2,047 | 2,008 | |||||||||||||
Card revenue | 1,943 | 1,802 | 1,817 | 1,847 | 1,748 | |||||||||||||
Loan revenue | 856 | 909 | 1,462 | 909 | 1,420 | |||||||||||||
Bank-owned life insurance | 660 | 656 | 626 | 616 | 602 | |||||||||||||
Investment securities gains (losses), net | 36 | (5,696 | ) | 79 | (2 | ) | (13,170 | ) | ||||||||||
Other | 608 | 850 | 727 | 210 | 413 | |||||||||||||
Total noninterest income (loss) | 9,750 | 3,862 | 9,861 | 8,746 | (4,046 | ) | ||||||||||||
Noninterest expense | ||||||||||||||||||
Compensation and employee benefits | 20,930 | 17,859 | 18,558 | 20,386 | 19,607 | |||||||||||||
Occupancy expense of premises, net | 2,813 | 2,309 | 2,405 | 2,574 | 2,746 | |||||||||||||
Equipment | 2,600 | 2,466 | 2,123 | 2,435 | 2,171 | |||||||||||||
Legal and professional | 2,059 | 2,269 | 1,678 | 1,682 | 1,736 | |||||||||||||
Data processing | 1,360 | 1,411 | 1,504 | 1,521 | 1,363 | |||||||||||||
Marketing | 598 | 700 | 782 | 1,142 | 986 | |||||||||||||
Amortization of intangibles | 1,637 | 1,441 | 1,460 | 1,594 | 1,752 | |||||||||||||
FDIC insurance | 942 | 900 | 783 | 862 | 749 | |||||||||||||
Communications | 196 | 183 | 206 | 260 | 261 | |||||||||||||
Foreclosed assets, net | 358 | 45 | 2 | (6 | ) | (28 | ) | |||||||||||
Other | 2,072 | 2,548 | 2,043 | 2,469 | 1,976 | |||||||||||||
Total noninterest expense | 35,565 | 32,131 | 31,544 | 34,919 | 33,319 | |||||||||||||
Income before income tax expense | 4,227 | 2,522 | 11,341 | 9,192 | 1,778 | |||||||||||||
Income tax expense (benefit) | 958 | (208 | ) | 2,203 | 1,598 | 381 | ||||||||||||
Net income | $ | 3,269 | $ | 2,730 | $ | 9,138 | $ | 7,594 | $ | 1,397 | ||||||||
Earnings per common share | ||||||||||||||||||
Basic | $ | 0.21 | $ | 0.17 | $ | 0.58 | $ | 0.48 | $ | 0.09 | ||||||||
Diluted | $ | 0.21 | $ | 0.17 | $ | 0.58 | $ | 0.48 | $ | 0.09 | ||||||||
Weighted average basic common shares outstanding | 15,723 | 15,693 | 15,689 | 15,680 | 15,650 | |||||||||||||
Weighted average diluted common shares outstanding | 15,774 | 15,756 | 15,711 | 15,689 | 15,691 | |||||||||||||
Dividends paid per common share | $ | 0.2425 | $ | 0.2425 | $ | 0.2425 | $ | 0.2425 | $ | 0.2425 |
MIDWESTONE FINANCIAL GROUP, INC.
FINANCIAL STATISTICS
As of or for the Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
(Dollars in thousands, except per share amounts) | 2024 | 2023 | 2023 | |||||||||
Earnings: | ||||||||||||
Net interest income | $ | 34,731 | $ | 32,559 | $ | 40,076 | ||||||
Noninterest income | 9,750 | 3,862 | (4,046 | ) | ||||||||
Total revenue, net of interest expense | 44,481 | 36,421 | 36,030 | |||||||||
Credit loss expense | 4,689 | 1,768 | 933 | |||||||||
Noninterest expense | 35,565 | 32,131 | 33,319 | |||||||||
Income before income tax expense | 4,227 | 2,522 | 1,778 | |||||||||
Income tax expense (benefit) | 958 | (208 | ) | 381 | ||||||||
Net income | $ | 3,269 | $ | 2,730 | $ | 1,397 | ||||||
Per Share Data: | ||||||||||||
Diluted earnings | $ | 0.21 | $ | 0.17 | $ | 0.09 | ||||||
Book value | 33.53 | 33.41 | 31.94 | |||||||||
Tangible book value(1) | 27.14 | 27.90 | 26.13 | |||||||||
Ending Balance Sheet: | ||||||||||||
Total assets | $ | 6,748,015 | $ | 6,427,540 | $ | 6,409,952 | ||||||
Loans held for investment, net of unearned income | 4,414,646 | 4,126,947 | 3,919,365 | |||||||||
Total securities | 1,862,169 | 1,870,324 | 2,071,783 | |||||||||
Total deposits | 5,585,236 | 5,395,673 | 5,555,153 | |||||||||
Short-term borrowings | 422,988 | 300,264 | 143,981 | |||||||||
Long-term debt | 122,066 | 123,296 | 137,981 | |||||||||
Total shareholders' equity | 528,040 | 524,378 | 500,650 | |||||||||
Average Balance Sheet: | ||||||||||||
Average total assets | $ | 6,635,379 | $ | 6,459,705 | $ | 6,524,065 | ||||||
Average total loans | 4,298,216 | 4,080,243 | 3,867,110 | |||||||||
Average total deposits | 5,481,114 | 5,443,323 | 5,546,694 | |||||||||
Financial Ratios: | ||||||||||||
Return on average assets | 0.20 | % | 0.17 | % | 0.09 | % | ||||||
Return on average equity | 2.49 | % | 2.12 | % | 1.14 | % | ||||||
Return on average tangible equity(1) | 4.18 | % | 3.57 | % | 2.70 | % | ||||||
Efficiency ratio(1) | 71.28 | % | 70.16 | % | 62.32 | % | ||||||
Net interest margin, tax equivalent(1) | 2.33 | % | 2.22 | % | 2.75 | % | ||||||
Loans to deposits ratio | 79.04 | % | 76.49 | % | 70.55 | % | ||||||
Common equity ratio | 7.83 | % | 8.16 | % | 7.81 | % | ||||||
Tangible common equity ratio(1) | 6.43 | % | 6.90 | % | 6.48 | % | ||||||
Credit Risk Profile: | ||||||||||||
Total nonperforming loans | $ | 29,267 | $ | 26,359 | $ | 14,442 | ||||||
Nonperforming loans ratio | 0.66 | % | 0.64 | % | 0.37 | % | ||||||
Total nonperforming assets | $ | 33,164 | $ | 30,288 | $ | 14,442 | ||||||
Nonperforming assets ratio | 0.49 | % | 0.47 | % | 0.23 | % | ||||||
Net charge-offs | $ | 189 | $ | 2,068 | $ | 333 | ||||||
Net charge-off ratio | 0.02 | % | 0.20 | % | 0.03 | % | ||||||
Allowance for credit losses | $ | 55,900 | $ | 51,500 | $ | 49,800 | ||||||
Allowance for credit losses ratio | 1.27 | % | 1.25 | % | 1.27 | % | ||||||
Allowance for credit losses to nonaccrual ratio | 197.53 | % | 198.91 | % | 344.88 | % | ||||||
(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 | |||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | March 31, 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) | $ | 4,298,216 | $ | 58,867 | 5.51 | % | $ | 4,080,243 | $ | 54,939 | 5.34 | % | $ | 3,867,110 | $ | 47,206 | 4.95 | % | |||||||||
Taxable investment securities | 1,557,603 | 9,460 | 2.44 | % | 1,593,699 | 9,274 | 2.31 | % | 1,811,388 | 10,444 | 2.34 | % | |||||||||||||||
Tax-exempt investment securities (2)(4) | 328,736 | 2,097 | 2.57 | % | 338,243 | 2,217 | 2.60 | % | 397,110 | 2,649 | 2.71 | % | |||||||||||||||
Total securities held for investment(2) | 1,886,339 | 11,557 | 2.46 | % | 1,931,942 | 11,491 | 2.36 | % | 2,208,498 | 13,093 | 2.40 | % | |||||||||||||||
Other | 30,605 | 418 | 5.49 | % | 22,937 | 230 | 3.98 | % | 24,848 | 244 | 3.98 | % | |||||||||||||||
Total interest earning assets(2) | $ | 6,215,160 | $ | 70,842 | 4.58 | % | $ | 6,035,122 | $ | 66,660 | 4.38 | % | $ | 6,100,456 | $ | 60,543 | 4.02 | % | |||||||||
Other assets | 420,219 | 424,583 | 423,609 | ||||||||||||||||||||||||
Total assets | $ | 6,635,379 | $ | 6,459,705 | $ | 6,524,065 | |||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||
Interest checking deposits | $ | 1,301,470 | $ | 2,890 | 0.89 | % | $ | 1,305,759 | $ | 2,991 | 0.91 | % | $ | 1,515,845 | $ | 1,849 | 0.49 | % | |||||||||
Money market deposits | 1,102,543 | 8,065 | 2.94 | % | 1,103,637 | 7,954 | 2.86 | % | 930,543 | 3,269 | 1.42 | % | |||||||||||||||
Savings deposits | 694,143 | 2,047 | 1.19 | % | 639,766 | 1,493 | 0.93 | % | 653,043 | 272 | 0.17 | % | |||||||||||||||
Time deposits | 1,446,981 | 14,724 | 4.09 | % | 1,463,498 | 14,762 | 4.00 | % | 1,417,688 | 9,929 | 2.84 | % | |||||||||||||||
Total interest bearing deposits | 4,545,137 | 27,726 | 2.45 | % | 4,512,660 | 27,200 | 2.39 | % | 4,517,119 | 15,319 | 1.38 | % | |||||||||||||||
Securities sold under agreements to repurchase | 5,330 | 11 | 0.83 | % | 8,661 | 17 | 0.78 | % | 145,809 | 450 | 1.25 | % | |||||||||||||||
Other short-term borrowings | 409,525 | 4,964 | 4.88 | % | 273,963 | 3,479 | 5.04 | % | 111,306 | 1,336 | 4.87 | % | |||||||||||||||
Short-term borrowings | 414,855 | 4,975 | 4.82 | % | 282,624 | 3,496 | 4.91 | % | 257,115 | 1,786 | 2.82 | % | |||||||||||||||
Long-term debt | 123,266 | 2,103 | 6.86 | % | 124,495 | 2,131 | 6.79 | % | 139,208 | 2,124 | 6.19 | % | |||||||||||||||
Total borrowed funds | 538,121 | 7,078 | 5.29 | % | 407,119 | 5,627 | 5.48 | % | 396,323 | 3,910 | 4.00 | % | |||||||||||||||
Total interest bearing liabilities | $ | 5,083,258 | $ | 34,804 | 2.75 | % | $ | 4,919,779 | $ | 32,827 | 2.65 | % | $ | 4,913,442 | $ | 19,229 | 1.59 | % | |||||||||
Noninterest bearing deposits | 935,977 | 930,663 | 1,029,575 | ||||||||||||||||||||||||
Other liabilities | 88,611 | 98,027 | 82,501 | ||||||||||||||||||||||||
Shareholders’ equity | 527,533 | 511,236 | 498,547 | ||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,635,379 | $ | 6,459,705 | $ | 6,524,065 | |||||||||||||||||||||
Net interest income(2) | $ | 36,038 | $ | 33,833 | $ | 41,314 | |||||||||||||||||||||
Net interest spread(2) | 1.83 | % | 1.73 | % | 2.43 | % | |||||||||||||||||||||
Net interest margin(2) | 2.33 | % | 2.22 | % | 2.75 | % | |||||||||||||||||||||
Total deposits(5) | $ | 5,481,114 | $ | 27,726 | 2.03 | % | $ | 5,443,323 | $ | 27,200 | 1.98 | % | $ | 5,546,694 | $ | 15,319 | 1.12 | % | |||||||||
Cost of funds(6) | 2.33 | % | 2.23 | % | 1.31 | % | |||||||||||||||||||||
(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, 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 | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(Dollars in thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
Total shareholders’ equity | $ | 528,040 | $ | 524,378 | $ | 505,411 | $ | 501,341 | $ | 500,650 | ||||||||||
Intangible assets, net | (100,649 | ) | (86,546 | ) | (87,987 | ) | (89,446 | ) | (91,040 | ) | ||||||||||
Tangible common equity | $ | 427,391 | $ | 437,832 | $ | 417,424 | $ | 411,895 | $ | 409,610 | ||||||||||
Total assets | $ | 6,748,015 | $ | 6,427,540 | $ | 6,467,818 | $ | 6,521,489 | $ | 6,409,952 | ||||||||||
Intangible assets, net | (100,649 | ) | (86,546 | ) | (87,987 | ) | (89,446 | ) | (91,040 | ) | ||||||||||
Tangible assets | $ | 6,647,366 | $ | 6,340,994 | $ | 6,379,831 | $ | 6,432,043 | $ | 6,318,912 | ||||||||||
Book value per share | $ | 33.53 | $ | 33.41 | $ | 32.21 | $ | 31.96 | $ | 31.94 | ||||||||||
Tangible book value per share(1) | $ | 27.14 | $ | 27.90 | $ | 26.60 | $ | 26.26 | $ | 26.13 | ||||||||||
Shares outstanding | 15,750,471 | 15,694,306 | 15,691,738 | 15,685,123 | 15,675,325 | |||||||||||||||
Common equity ratio | 7.83 | % | 8.16 | % | 7.81 | % | 7.69 | % | 7.81 | % | ||||||||||
Tangible common equity ratio(2) | 6.43 | % | 6.90 | % | 6.54 | % | 6.40 | % | 6.48 | % | ||||||||||
(1) Tangible common equity divided by shares outstanding. | ||||||||||||||||||||
(2) Tangible common equity divided by tangible assets. | ||||||||||||||||||||
Three Months Ended | ||||||||||||
Return on Average Tangible Equity | March 31, | December 31, | March 31, | |||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | |||||||||
Net income | $ | 3,269 | $ | 2,730 | $ | 1,397 | ||||||
Intangible amortization, net of tax(1) | 1,228 | 1,081 | 1,314 | |||||||||
Tangible net income | $ | 4,497 | $ | 3,811 | $ | 2,711 | ||||||
Average shareholders’ equity | $ | 527,533 | $ | 511,236 | $ | 498,547 | ||||||
Average intangible assets, net | (95,296 | ) | (87,258 | ) | (92,002 | ) | ||||||
Average tangible equity | $ | 432,237 | $ | 423,978 | $ | 406,545 | ||||||
Return on average equity | 2.49 | % | 2.12 | % | 1.14 | % | ||||||
Return on average tangible equity(2) | 4.18 | % | 3.57 | % | 2.70 | % | ||||||
(1) The combined income tax rate utilized was | ||||||||||||
(2) Annualized tangible net income divided by average tangible equity. | ||||||||||||
Net Interest Margin, Tax Equivalent/ Core Net Interest Margin | Three Months Ended | |||||||||||
March 31, | December 31, | March 31, | ||||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | |||||||||
Net interest income | $ | 34,731 | $ | 32,559 | $ | 40,076 | ||||||
Tax equivalent adjustments: | ||||||||||||
Loans(1) | 920 | 846 | 716 | |||||||||
Securities(1) | 387 | 428 | 522 | |||||||||
Net interest income, tax equivalent | $ | 36,038 | $ | 33,833 | $ | 41,314 | ||||||
Loan purchase discount accretion | (1,152 | ) | (765 | ) | (1,189 | ) | ||||||
Core net interest income | $ | 34,886 | $ | 33,068 | $ | 40,125 | ||||||
Net interest margin | 2.25 | % | 2.14 | % | 2.66 | % | ||||||
Net interest margin, tax equivalent(2) | 2.33 | % | 2.22 | % | 2.75 | % | ||||||
Core net interest margin(3) | 2.26 | % | 2.17 | % | 2.67 | % | ||||||
Average interest earning assets | $ | 6,215,160 | $ | 6,035,122 | $ | 6,100,456 | ||||||
(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 | ||||||||||||
Loan Yield, Tax Equivalent / Core Yield on Loans | March 31, | December 31, | March 31, | |||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | |||||||||
Loan interest income, including fees | $ | 57,947 | $ | 54,093 | $ | 46,490 | ||||||
Tax equivalent adjustment(1) | 920 | 846 | 716 | |||||||||
Tax equivalent loan interest income | $ | 58,867 | $ | 54,939 | $ | 47,206 | ||||||
Loan purchase discount accretion | (1,152 | ) | (765 | ) | (1,189 | ) | ||||||
Core loan interest income | $ | 57,715 | $ | 54,174 | $ | 46,017 | ||||||
Yield on loans | 5.42 | % | 5.26 | % | 4.88 | % | ||||||
Yield on loans, tax equivalent(2) | 5.51 | % | 5.34 | % | 4.95 | % | ||||||
Core yield on loans(3) | 5.40 | % | 5.27 | % | 4.83 | % | ||||||
Average loans | $ | 4,298,216 | $ | 4,080,243 | $ | 3,867,110 | ||||||
(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 | ||||||||||||
Efficiency Ratio | March 31, | December 31, | March 31, | |||||||||
(Dollars in thousands) | 2024 | 2023 | 2023 | |||||||||
Total noninterest expense | $ | 35,565 | $ | 32,131 | $ | 33,319 | ||||||
Amortization of intangibles | (1,637 | ) | (1,441 | ) | (1,752 | ) | ||||||
Merger-related expenses | (1,314 | ) | (245 | ) | (136 | ) | ||||||
Noninterest expense used for efficiency ratio | $ | 32,614 | $ | 30,445 | $ | 31,431 | ||||||
Net interest income, tax equivalent(1) | $ | 36,038 | $ | 33,833 | $ | 41,314 | ||||||
Plus: Noninterest income | 9,750 | 3,862 | (4,046 | ) | ||||||||
Less: Investment securities (losses) gains, net | 36 | (5,696 | ) | (13,170 | ) | |||||||
Net revenues used for efficiency ratio | $ | 45,752 | $ | 43,391 | $ | 50,438 | ||||||
Efficiency ratio (2) | 71.28 | % | 70.16 | % | 62.32 | % | ||||||
(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. | ||||||||||||
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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