MidWestOne Financial Group, Inc. Reports Financial Results for the Second Quarter of 2023
IOWA CITY, Iowa, Aug. 01, 2023 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported results for the second quarter of 2023.
Second Quarter 2023 Highlights1
- Net income of
$7.6 million , or$0.48 per diluted common share, compared to net income of$1.4 million , or$0.09 per diluted common share, for the linked quarter. - Annualized loan growth of
10.6% . - Expenses of
$34.9 million included$1.4 million of costs stemming from a voluntary early retirement program and executive relocation. - Nonperforming assets ratio improved 1 basis point (“bps”) to
0.22% ; net charge-off ratio was0.09% .
Subsequent Events
- On July 25, 2023, the Board of Directors declared a cash dividend of
$0.24 25 per common share.
CEO COMMENTARY
Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, “On our first quarter earnings call, we introduced a comprehensive strategic plan designed to transform our operations and become a higher performing bank over the medium term. Though we are facing a challenging operating environment driven by rising interest rates, we have made solid progress across the five pillars of our plan highlighted by
Mr. Reeves concluded, “I’m very pleased with the early results that we are achieving as we execute our strategic plan. We are beginning to make investments in talent and our platform to drive growth, while keeping our noninterest expense relatively steady from the first quarter. We are driving significant change across our organization, and I would like to thank our employees for their hard work and dedication to our Company, customers, and communities. Our results would not be possible without their tireless efforts. I remain confident that we are on a strong path to significantly improved financial results.”
_____________________
1 Second Quarter Summary compares to the first quarter of 2023 (the “linked quarter”) unless noted.
As of or for the quarter ended | Six Months Ended | ||||||||||||||||||
(Dollars in thousands, except per share amounts and as noted) | June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Financial Results | |||||||||||||||||||
Revenue | $ | 45,708 | $ | 36,030 | $ | 52,072 | $ | 81,738 | $ | 101,052 | |||||||||
Credit loss expense | 1,597 | 933 | 3,282 | 2,530 | 3,282 | ||||||||||||||
Noninterest expense | 34,919 | 33,319 | 32,082 | 68,238 | 63,725 | ||||||||||||||
Net income | 7,594 | 1,397 | 12,621 | 8,991 | 26,516 | ||||||||||||||
Per Common Share | |||||||||||||||||||
Diluted earnings per share | $ | 0.48 | $ | 0.09 | $ | 0.80 | $ | 0.57 | $ | 1.69 | |||||||||
Book value | 31.96 | 31.94 | 31.26 | 31.96 | 31.26 | ||||||||||||||
Tangible book value(1) | 26.26 | 26.13 | 25.10 | 26.26 | 25.10 | ||||||||||||||
Balance Sheet & Credit Quality | |||||||||||||||||||
Loans In millions | $ | 4,018.6 | $ | 3,919.4 | $ | 3,611.2 | $ | 4,018.6 | $ | 3,611.2 | |||||||||
Investment securities In millions | 2,003.1 | 2,071.8 | 2,402.8 | 2,003.1 | 2,402.8 | ||||||||||||||
Deposits In millions | 5,445.4 | 5,555.2 | 5,537.4 | 5,445.4 | 5,537.4 | ||||||||||||||
Net loan charge-offs In millions | 0.9 | 0.3 | 0.3 | 1.2 | 2.5 | ||||||||||||||
Allowance for credit losses ratio | 1.25 | % | 1.27 | % | 1.45 | % | 1.25 | % | 1.45 | % | |||||||||
Selected Ratios | |||||||||||||||||||
Return on average assets | 0.47 | % | 0.09 | % | 0.83 | % | 0.28 | % | 0.89 | % | |||||||||
Net interest margin, tax equivalent(1) | 2.52 | % | 2.75 | % | 2.87 | % | 2.63 | % | 2.83 | % | |||||||||
Return on average equity | 6.03 | % | 1.14 | % | 10.14 | % | 3.61 | % | 10.44 | % | |||||||||
Return on average tangible equity(1) | 8.50 | % | 2.70 | % | 13.13 | % | 5.65 | % | 13.35 | % | |||||||||
Efficiency ratio(1) | 71.13 | % | 62.32 | % | 56.57 | % | 66.56 | % | 58.46 | % | |||||||||
(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 | |||||||||||
2Q23 vs | 2Q23 vs | ||||||||||||
(Dollars in thousands) | 2Q23 | 1Q23 | 2Q22 | 1Q23 | 2Q22 | ||||||||
Net interest income | $ | 36,962 | $ | 40,076 | $ | 39,725 | (8 | )% | (7 | )% | |||
Noninterest income (loss) | 8,746 | (4,046 | ) | 12,347 | n / m | (29 | )% | ||||||
Total revenue, net of interest expense | $ | 45,708 | $ | 36,030 | $ | 52,072 | 27 | % | (12 | )% | |||
Results are not meaningful (n/m) |
Total revenue for the second quarter of 2023 increased
Net interest income of
The Company’s tax equivalent net interest margin was
The tax equivalent net interest margin was
Noninterest Income (Loss) | Change | Change | ||||||||||||||
2Q23 vs | 2Q23 vs | |||||||||||||||
(In thousands) | 2Q23 | 1Q23 | 2Q22 | 1Q23 | 2Q22 | |||||||||||
Investment services and trust activities | $ | 3,119 | $ | 2,933 | $ | 2,670 | 6 | % | 17 | % | ||||||
Service charges and fees | 2,047 | 2,008 | 1,717 | 2 | % | 19 | % | |||||||||
Card revenue | 1,847 | 1,748 | 1,878 | 6 | % | (2 | )% | |||||||||
Loan revenue | 909 | 1,420 | 3,523 | (36 | )% | (74 | )% | |||||||||
Bank-owned life insurance | 616 | 602 | 558 | 2 | % | 10 | % | |||||||||
Investment securities (losses) gains, net | (2 | ) | (13,170 | ) | 395 | n / m | (101 | )% | ||||||||
Other | 210 | 413 | 1,606 | (49 | )% | (87 | )% | |||||||||
Total noninterest income (loss) | $ | 8,746 | $ | (4,046 | ) | $ | 12,347 | n / m | (29 | )% | ||||||
Noninterest income for the second quarter of 2023 increased
EXPENSE REVIEW
Noninterest Expense | Change | Change | ||||||||||
2Q23 vs | 2Q23 vs | |||||||||||
(In thousands) | 2Q23 | 1Q23 | 2Q22 | 1Q23 | 2Q22 | |||||||
Compensation and employee benefits | $ | 20,386 | $ | 19,607 | $ | 18,955 | 4 | % | 8 | % | ||
Occupancy expense of premises, net | 2,574 | 2,746 | 2,253 | (6 | )% | 14 | % | |||||
Equipment | 2,435 | 2,171 | 2,107 | 12 | % | 16 | % | |||||
Legal and professional | 1,682 | 1,736 | 2,435 | (3 | )% | (31 | )% | |||||
Data processing | 1,521 | 1,363 | 1,237 | 12 | % | 23 | % | |||||
Marketing | 1,142 | 986 | 1,157 | 16 | % | (1 | )% | |||||
Amortization of intangibles | 1,594 | 1,752 | 1,283 | (9 | )% | 24 | % | |||||
FDIC insurance | 862 | 749 | 420 | 15 | % | 105 | % | |||||
Communications | 260 | 261 | 266 | — | % | (2 | )% | |||||
Foreclosed assets, net | (6 | ) | (28 | ) | 4 | (79 | )% | (250 | )% | |||
Other | 2,469 | 1,976 | 1,965 | 25 | % | 26 | % | |||||
Total noninterest expense | $ | 34,919 | $ | 33,319 | $ | 32,082 | 5 | % | 9 | % |
Merger-related Expenses | ||||||||
(In thousands) | 2Q23 | 1Q23 | 2Q22 | |||||
Compensation and employee benefits | $ | — | $ | 70 | $ | 150 | ||
Occupancy expense of premises, net | — | — | 1 | |||||
Equipment | — | — | 6 | |||||
Legal and professional | — | — | 638 | |||||
Data processing | — | 65 | 38 | |||||
Marketing | — | — | 65 | |||||
Communications | — | — | 2 | |||||
Other | — | 1 | 1 | |||||
Total merger-related expenses | $ | — | $ | 136 | $ | 901 |
Noninterest expense for the second quarter of 2023 increased
Noninterest expense for the second quarter of 2023 increased
The Company’s effective income tax rate decreased to
BALANCE SHEET REVIEW
Total assets were
Loans Held for Investment | June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||
Commercial and industrial | $ | 1,089,269 | 27.1 | % | $ | 1,080,514 | 27.6 | % | $ | 986,137 | 27.3 | % | |||
Agricultural | 106,148 | 2.6 | 106,641 | 2.7 | 110,263 | 3.1 | |||||||||
Commercial real estate | |||||||||||||||
Construction and development | 313,836 | 7.8 | 320,924 | 8.2 | 224,470 | 6.2 | |||||||||
Farmland | 183,378 | 4.6 | 182,528 | 4.7 | 181,820 | 5.0 | |||||||||
Multifamily | 305,519 | 7.6 | 255,065 | 6.5 | 239,676 | 6.6 | |||||||||
Other | 1,331,886 | 33.1 | 1,290,454 | 33.0 | 1,213,974 | 33.7 | |||||||||
Total commercial real estate | 2,134,619 | 53.1 | 2,048,971 | 52.4 | 1,859,940 | 51.5 | |||||||||
Residential real estate | |||||||||||||||
One-to-four family first liens | 448,096 | 11.2 | 448,459 | 11.4 | 430,157 | 11.9 | |||||||||
One-to-four family junior liens | 168,755 | 4.2 | 162,403 | 4.1 | 148,647 | 4.1 | |||||||||
Total residential real estate | 616,851 | 15.4 | 610,862 | 15.5 | 578,804 | 16.0 | |||||||||
Consumer | 71,762 | 1.8 | 72,377 | 1.8 | 76,008 | 2.1 | |||||||||
Loans held for investment, net of unearned income | $ | 4,018,649 | 100.0 | % | $ | 3,919,365 | 100.0 | % | $ | 3,611,152 | 100.0 | % | |||
Total commitments to extend credit | $ | 1,296,719 | $ | 1,205,902 | $ | 1,117,754 |
Loans held for investment, net of unearned income, increased
Investment Securities | June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||
Available for sale | $ | 903,520 | 45.1 | % | $ | 954,074 | 46.1 | % | $ | 1,234,789 | 51.4 | % | |||
Held to maturity | 1,099,569 | 54.9 | % | 1,117,709 | 53.9 | % | 1,168,042 | 48.6 | % | ||||||
Total investment securities | $ | 2,003,089 | $ | 2,071,783 | $ | 2,402,831 |
Investment securities at June 30, 2023 were
Deposits | June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||
Noninterest bearing deposits | $ | 897,923 | 16.5 | % | $ | 989,469 | 17.8 | % | $ | 1,114,825 | 20.1 | % | |||
Interest checking deposits | 1,397,276 | 25.7 | 1,476,948 | 26.6 | 1,749,748 | 31.7 | |||||||||
Money market deposits | 1,096,432 | 20.1 | 969,238 | 17.4 | 1,070,912 | 19.3 | |||||||||
Savings deposits | 585,967 | 10.8 | 631,811 | 11.4 | 715,829 | 12.9 | |||||||||
Time deposits of | 648,586 | 11.9 | 599,302 | 10.8 | 547,427 | 9.9 | |||||||||
Total core deposits | 4,626,184 | 85.0 | 4,666,768 | 84.0 | 5,198,741 | 93.9 | |||||||||
Brokered time deposits | 365,623 | 6.7 | 366,539 | 6.6 | — | — | |||||||||
Time deposits over | 453,640 | 8.3 | 521,846 | 9.4 | 338,700 | 6.1 | |||||||||
Total deposits | $ | 5,445,447 | 100.0 | % | $ | 5,555,153 | 100.0 | % | $ | 5,537,441 | 100.0 | % |
Total deposits declined
Borrowed Funds | June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||
(Dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||
Short-term borrowings | $ | 362,054 | 74.2 | % | $ | 143,981 | 51.1 | % | $ | 193,894 | 54.9 | % | |||
Long-term debt | 125,752 | 25.8 | % | 137,981 | 48.9 | % | 159,168 | 45.1 | % | ||||||
Total borrowed funds | $ | 487,806 | $ | 281,962 | $ | 353,062 |
Total borrowed funds were
Capital | June 30, | March 31, | June 30, | ||||||||
(Dollars in thousands) | 2023 (1) | 2023 | 2022 | ||||||||
Total shareholders’ equity | $ | 501,341 | $ | 500,650 | $ | 488,832 | |||||
Accumulated other comprehensive loss | (82,704 | ) | (78,885 | ) | (65,231 | ) | |||||
MidWestOne Financial Group, Inc. Consolidated | |||||||||||
Tier 1 leverage to average assets ratio | 8.47 | % | 8.30 | % | 8.51 | % | |||||
Common equity tier 1 capital to risk-weighted assets ratio | 9.36 | % | 9.39 | % | 8.82 | % | |||||
Tier 1 capital to risk-weighted assets ratio | 10.15 | % | 10.18 | % | 9.61 | % | |||||
Total capital to risk-weighted assets ratio | 12.26 | % | 12.31 | % | 11.73 | % | |||||
MidWestOne Bank | |||||||||||
Tier 1 leverage to average assets ratio | 9.42 | % | 9.28 | % | 9.70 | % | |||||
Common equity tier 1 capital to risk-weighted assets ratio | 11.31 | % | 11.40 | % | 10.99 | % | |||||
Tier 1 capital to risk-weighted assets ratio | 11.31 | % | 11.40 | % | 10.99 | % | |||||
Total capital to risk-weighted assets ratio | 12.22 | % | 12.31 | % | 11.90 | % | |||||
(1) Regulatory capital ratios for June 30, 2023 are preliminary |
Total shareholders’ equity at June 30, 2023 increased
Accumulated other comprehensive loss at June 30, 2023 increased
On July 25, 2023, the Board of Directors of the Company declared a cash dividend of
No common shares were repurchased by the Company during the period March 31, 2023 through June 30, 2023 or for the subsequent period through August 1, 2023. 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 | ||||||||||
June 30, | March 31, | June 30, | |||||||||
(Dollars in thousands) | 2023 | 2023 | 2022 | ||||||||
Credit loss expense related to loans | $ | 1,497 | $ | 933 | $ | 3,060 | |||||
Net charge-offs | 897 | 333 | 281 | ||||||||
Allowance for credit losses | 50,400 | 49,800 | 52,350 | ||||||||
Pass | $ | 3,769,309 | $ | 3,728,522 | $ | 3,402,508 | |||||
Special Mention / Watch | 133,904 | 92,075 | 111,893 | ||||||||
Classified | 115,436 | 98,768 | 96,751 | ||||||||
Loans greater than 30 days past due and accruing | $ | 6,201 | $ | 4,932 | $ | 12,349 | |||||
Nonperforming loans | $ | 14,448 | $ | 14,442 | $ | 27,337 | |||||
Nonperforming assets | 14,448 | 14,442 | 27,621 | ||||||||
Net charge-off ratio(1) | 0.09 | % | 0.03 | % | 0.03 | % | |||||
Classified loans ratio(2) | 2.87 | % | 2.52 | % | 2.68 | % | |||||
Nonperforming loans ratio(3) | 0.36 | % | 0.37 | % | 0.76 | % | |||||
Nonperforming assets ratio(4) | 0.22 | % | 0.23 | % | 0.43 | % | |||||
Allowance for credit losses ratio(5) | 1.25 | % | 1.27 | % | 1.45 | % | |||||
Allowance for credit losses to nonaccrual loans ratio(6) | 355.03 | % | 344.88 | % | 201.52 | % | |||||
(1) Net charge-off ratio is calculated as annualized net charge-offs divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, during the period. | |||||||||||
(2) Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period. | |||||||||||
(3) Nonperforming loans ratio is calculated as nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period. | |||||||||||
(4) Nonperforming assets ratio is calculated as nonperforming assets divided by total assets at the end of the period. | |||||||||||
(5) Allowance for credit losses ratio is calculated as allowance for credit losses divided by loans held for investment, net of unearned income, at the end of the period. | |||||||||||
(6)Allowance for credit losses to nonaccrual loans ratio is calculated as allowance for credit losses divided by nonaccrual loans at the end of the period. | |||||||||||
Compared to the linked quarter, nonperforming loans and nonperforming assets ratios remained stable and improved from the prior year period. The nonperforming loans ratio declined 1 bps from the linked quarter and 40 bps from the prior year to
As of June 30, 2023, the allowance for credit losses was
Nonperforming Loans Roll Forward | |||||||||||
(Dollars in thousands) | Nonaccrual | 90+ Days Past Due & Still Accruing | Total | ||||||||
Balance at March 31, 2023 | $ | 14,440 | $ | 2 | $ | 14,442 | |||||
Loans placed on nonaccrual or 90+ days past due & still accruing | 1,828 | 333 | 2,161 | ||||||||
Proceeds related to repayment or sale | (1,054 | ) | — | (1,054 | ) | ||||||
Loans returned to accrual status or no longer past due | (45 | ) | — | (45 | ) | ||||||
Charge-offs | (973 | ) | (80 | ) | (1,053 | ) | |||||
Transfer to nonaccrual | — | (3 | ) | (3 | ) | ||||||
Balance at June 30, 2023 | $ | 14,196 | $ | 252 | $ | 14,448 |
CONFERENCE CALL DETAILS
The Company will host a conference call for investors at 11:00 a.m. CT on Tuesday, August 1, 2023. To participate, you may pre-register for this call utilizing the following link: https://www.netroadshow.com/events/login?show=c7140c96&confId=51647. 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 231141 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until October 26, 2023, by calling 1-866-813-9403 and using the replay access code of 868948. 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 (including with IOFB), 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 actual and expected increases in inflation and interest rates, including on our net income and the value of our securities portfolio; (4) changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing; (5) fluctuations in the value of our investment securities; (6) governmental monetary and fiscal policies; (7) changes in and uncertainty related to benchmark interest rates used to price loans and deposits; (8) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators, including the new
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
(In thousands) | 2023 | 2023 | 2022 | 2022 | 2022 | ||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 75,955 | $ | 63,945 | $ | 83,990 | $ | 77,513 | $ | 60,622 | |||||||||
Interest earning deposits in banks | 68,603 | 5,273 | 2,445 | 1,001 | 23,242 | ||||||||||||||
Total cash and cash equivalents | 144,558 | 69,218 | 86,435 | 78,514 | 83,864 | ||||||||||||||
Debt securities available for sale at fair value | 903,520 | 954,074 | 1,153,547 | 1,153,304 | 1,234,789 | ||||||||||||||
Held to maturity securities at amortized cost | 1,099,569 | 1,117,709 | 1,129,421 | 1,146,583 | 1,168,042 | ||||||||||||||
Total securities | 2,003,089 | 2,071,783 | 2,282,968 | 2,299,887 | 2,402,831 | ||||||||||||||
Loans held for sale | 2,821 | 2,553 | 612 | 2,320 | 4,991 | ||||||||||||||
Gross loans held for investment | 4,031,377 | 3,932,900 | 3,854,791 | 3,761,664 | 3,627,728 | ||||||||||||||
Unearned income, net | (12,728 | ) | (13,535 | ) | (14,267 | ) | (15,375 | ) | (16,576 | ) | |||||||||
Loans held for investment, net of unearned income | 4,018,649 | 3,919,365 | 3,840,524 | 3,746,289 | 3,611,152 | ||||||||||||||
Allowance for credit losses | (50,400 | ) | (49,800 | ) | (49,200 | ) | (52,100 | ) | (52,350 | ) | |||||||||
Total loans held for investment, net | 3,968,249 | 3,869,565 | 3,791,324 | 3,694,189 | 3,558,802 | ||||||||||||||
Premises and equipment, net | 85,831 | 86,208 | 87,125 | 87,732 | 89,048 | ||||||||||||||
Goodwill | 62,477 | 62,477 | 62,477 | 62,477 | 62,477 | ||||||||||||||
Other intangible assets, net | 26,969 | 28,563 | 30,315 | 32,086 | 33,874 | ||||||||||||||
Foreclosed assets, net | — | — | 103 | 103 | 284 | ||||||||||||||
Other assets | 227,495 | 219,585 | 236,517 | 233,753 | 206,320 | ||||||||||||||
Total assets | $ | 6,521,489 | $ | 6,409,952 | $ | 6,577,876 | $ | 6,491,061 | $ | 6,442,491 | |||||||||
LIABILITIES | |||||||||||||||||||
Noninterest bearing deposits | $ | 897,923 | $ | 989,469 | $ | 1,053,450 | $ | 1,139,694 | $ | 1,114,825 | |||||||||
Interest bearing deposits | 4,547,524 | 4,565,684 | 4,415,492 | 4,337,088 | 4,422,616 | ||||||||||||||
Total deposits | 5,445,447 | 5,555,153 | 5,468,942 | 5,476,782 | 5,537,441 | ||||||||||||||
Short-term borrowings | 362,054 | 143,981 | 391,873 | 304,536 | 193,894 | ||||||||||||||
Long-term debt | 125,752 | 137,981 | 139,210 | 154,190 | 159,168 | ||||||||||||||
Other liabilities | 86,895 | 72,187 | 85,058 | 83,324 | 63,156 | ||||||||||||||
Total liabilities | 6,020,148 | 5,909,302 | 6,085,083 | 6,018,832 | 5,953,659 | ||||||||||||||
SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Common stock | 16,581 | 16,581 | 16,581 | 16,581 | 16,581 | ||||||||||||||
Additional paid-in capital | 301,424 | 300,966 | 302,085 | 301,418 | 300,859 | ||||||||||||||
Retained earnings | 290,548 | 286,767 | 289,289 | 276,998 | 262,395 | ||||||||||||||
Treasury stock | (24,508 | ) | (24,779 | ) | (26,115 | ) | (26,145 | ) | (25,772 | ) | |||||||||
Accumulated other comprehensive loss | (82,704 | ) | (78,885 | ) | (89,047 | ) | (96,623 | ) | (65,231 | ) | |||||||||
Total shareholders’ equity | 501,341 | 500,650 | 492,793 | 472,229 | 488,832 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,521,489 | $ | 6,409,952 | $ | 6,577,876 | $ | 6,491,061 | $ | 6,442,491 | |||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER AND YEAR TO DATE CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||
(In thousands, except per share data) | 2023 | 2023 | 2022 | 2022 | 2022 | 2023 | 2022 | |||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Loans, including fees | $ | 49,726 | $ | 46,490 | $ | 43,769 | $ | 40,451 | $ | 32,746 | $ | 96,216 | $ | 64,064 | ||||||||||||
Taxable investment securities | 9,734 | 10,444 | 10,685 | 10,635 | 9,576 | 20,178 | 17,699 | |||||||||||||||||||
Tax-exempt investment securities | 1,822 | 2,127 | 2,303 | 2,326 | 2,367 | 3,949 | 4,750 | |||||||||||||||||||
Other | 68 | 244 | — | 9 | 40 | 312 | 68 | |||||||||||||||||||
Total interest income | 61,350 | 59,305 | 56,757 | 53,421 | 44,729 | 120,655 | 86,581 | |||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Deposits | 20,117 | 15,319 | 9,127 | 5,035 | 3,173 | 35,436 | 6,083 | |||||||||||||||||||
Short-term borrowings | 2,118 | 1,786 | 1,955 | 767 | 229 | 3,904 | 348 | |||||||||||||||||||
Long-term debt | 2,153 | 2,124 | 2,111 | 1,886 | 1,602 | 4,277 | 3,089 | |||||||||||||||||||
Total interest expense | 24,388 | 19,229 | 13,193 | 7,688 | 5,004 | 43,617 | 9,520 | |||||||||||||||||||
Net interest income | 36,962 | 40,076 | 43,564 | 45,733 | 39,725 | 77,038 | 77,061 | |||||||||||||||||||
Credit loss expense | 1,597 | 933 | 572 | 638 | 3,282 | 2,530 | 3,282 | |||||||||||||||||||
Net interest income after credit loss expense | 35,365 | 39,143 | 42,992 | 45,095 | 36,443 | 74,508 | 73,779 | |||||||||||||||||||
Noninterest income (loss) | ||||||||||||||||||||||||||
Investment services and trust activities | 3,119 | 2,933 | 2,666 | 2,876 | 2,670 | 6,052 | 5,681 | |||||||||||||||||||
Service charges and fees | 2,047 | 2,008 | 2,028 | 2,075 | 1,717 | 4,055 | 3,374 | |||||||||||||||||||
Card revenue | 1,847 | 1,748 | 1,784 | 1,898 | 1,878 | 3,595 | 3,528 | |||||||||||||||||||
Loan revenue | 909 | 1,420 | 966 | 1,722 | 3,523 | 2,329 | 7,816 | |||||||||||||||||||
Bank-owned life insurance | 616 | 602 | 637 | 579 | 558 | 1,218 | 1,089 | |||||||||||||||||||
Investment securities (losses) gains, net | (2 | ) | (13,170 | ) | (1 | ) | (163 | ) | 395 | (13,172 | ) | 435 | ||||||||||||||
Other | 210 | 413 | 2,860 | 3,601 | 1,606 | 623 | 2,068 | |||||||||||||||||||
Total noninterest income (loss) | 8,746 | (4,046 | ) | 10,940 | 12,588 | 12,347 | 4,700 | 23,991 | ||||||||||||||||||
Noninterest expense | ||||||||||||||||||||||||||
Compensation and employee benefits | 20,386 | 19,607 | 20,438 | 20,046 | 18,955 | 39,993 | 37,619 | |||||||||||||||||||
Occupancy expense of premises, net | 2,574 | 2,746 | 2,663 | 2,577 | 2,253 | 5,320 | 5,032 | |||||||||||||||||||
Equipment | 2,435 | 2,171 | 2,327 | 2,358 | 2,107 | 4,606 | 4,008 | |||||||||||||||||||
Legal and professional | 1,682 | 1,736 | 1,846 | 2,012 | 2,435 | 3,418 | 4,788 | |||||||||||||||||||
Data processing | 1,521 | 1,363 | 1,375 | 1,731 | 1,237 | 2,884 | 2,468 | |||||||||||||||||||
Marketing | 1,142 | 986 | 947 | 1,139 | 1,157 | 2,128 | 2,186 | |||||||||||||||||||
Amortization of intangibles | 1,594 | 1,752 | 1,770 | 1,789 | 1,283 | 3,346 | 2,510 | |||||||||||||||||||
FDIC insurance | 862 | 749 | 405 | 415 | 420 | 1,611 | 840 | |||||||||||||||||||
Communications | 260 | 261 | 285 | 302 | 266 | 521 | 538 | |||||||||||||||||||
Foreclosed assets, net | (6 | ) | (28 | ) | 48 | 42 | 4 | (34 | ) | (108 | ) | |||||||||||||||
Other | 2,469 | 1,976 | 2,336 | 2,212 | 1,965 | 4,445 | 3,844 | |||||||||||||||||||
Total noninterest expense | 34,919 | 33,319 | 34,440 | 34,623 | 32,082 | 68,238 | 63,725 | |||||||||||||||||||
Income before income tax expense | 9,192 | 1,778 | 19,492 | 23,060 | 16,708 | 10,970 | 34,045 | |||||||||||||||||||
Income tax expense | 1,598 | 381 | 3,490 | 4,743 | 4,087 | 1,979 | 7,529 | |||||||||||||||||||
Net income | $ | 7,594 | $ | 1,397 | $ | 16,002 | $ | 18,317 | $ | 12,621 | $ | 8,991 | $ | 26,516 | ||||||||||||
Earnings per common share | ||||||||||||||||||||||||||
Basic | $ | 0.48 | $ | 0.09 | $ | 1.02 | $ | 1.17 | $ | 0.81 | $ | 0.57 | $ | 1.69 | ||||||||||||
Diluted | $ | 0.48 | $ | 0.09 | $ | 1.02 | $ | 1.17 | $ | 0.80 | $ | 0.57 | $ | 1.69 | ||||||||||||
Weighted average basic common shares outstanding | 15,680 | 15,650 | 15,624 | 15,623 | 15,668 | 15,665 | 15,675 | |||||||||||||||||||
Weighted average diluted common shares outstanding | 15,689 | 15,691 | 15,693 | 15,654 | 15,688 | 15,688 | 15,703 | |||||||||||||||||||
Dividends paid per common share | $ | 0.2425 | $ | 0.2425 | $ | 0.2375 | $ | 0.2375 | $ | 0.2375 | $ | 0.4850 | $ | 0.4750 | ||||||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL STATISTICS
As of or for the Three Months Ended | As of or for the Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
(Dollars in thousands, except per share amounts) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Earnings: | |||||||||||||||||||
Net interest income | $ | 36,962 | $ | 40,076 | $ | 39,725 | $ | 77,038 | $ | 77,061 | |||||||||
Noninterest (loss) income | 8,746 | (4,046 | ) | 12,347 | 4,700 | 23,991 | |||||||||||||
Total revenue, net of interest expense | 45,708 | 36,030 | 52,072 | 81,738 | 101,052 | ||||||||||||||
Credit loss expense | 1,597 | 933 | 3,282 | 2,530 | 3,282 | ||||||||||||||
Noninterest expense | 34,919 | 33,319 | 32,082 | 68,238 | 63,725 | ||||||||||||||
Income before income tax expense | 9,192 | 1,778 | 16,708 | 10,970 | 34,045 | ||||||||||||||
Income tax expense | 1,598 | 381 | 4,087 | 1,979 | 7,529 | ||||||||||||||
Net income | $ | 7,594 | $ | 1,397 | $ | 12,621 | $ | 8,991 | $ | 26,516 | |||||||||
Per Share Data: | |||||||||||||||||||
Diluted earnings | $ | 0.48 | $ | 0.09 | $ | 0.80 | $ | 0.57 | $ | 1.69 | |||||||||
Book value | 31.96 | 31.94 | 31.26 | 31.96 | 31.26 | ||||||||||||||
Tangible book value(1) | 26.26 | 26.13 | 25.10 | 26.26 | 25.10 | ||||||||||||||
Ending Balance Sheet: | |||||||||||||||||||
Total assets | $ | 6,521,489 | $ | 6,409,952 | $ | 6,442,491 | $ | 6,521,489 | $ | 6,442,491 | |||||||||
Loans held for investment, net of unearned income | 4,018,649 | 3,919,365 | 3,611,152 | 4,018,649 | 3,611,152 | ||||||||||||||
Total securities | 2,003,089 | 2,071,783 | 2,402,831 | 2,003,089 | 2,402,831 | ||||||||||||||
Total deposits | 5,445,447 | 5,555,153 | 5,537,441 | 5,445,447 | 5,537,441 | ||||||||||||||
Short-term borrowings | 362,054 | 143,981 | 193,894 | 362,054 | 193,894 | ||||||||||||||
Long-term debt | 125,752 | 137,981 | 159,168 | 125,752 | 159,168 | ||||||||||||||
Total shareholders’ equity | 501,341 | 500,650 | 488,832 | 501,341 | 488,832 | ||||||||||||||
Average Balance Sheet: | |||||||||||||||||||
Average total assets | $ | 6,465,810 | $ | 6,524,065 | $ | 6,078,950 | $ | 6,494,777 | $ | 5,997,231 | |||||||||
Average total loans | 4,003,717 | 3,867,110 | 3,326,269 | 3,935,791 | 3,286,083 | ||||||||||||||
Average total deposits | 5,454,517 | 5,546,694 | 5,181,927 | 5,500,350 | 5,113,368 | ||||||||||||||
Financial Ratios: | |||||||||||||||||||
Return on average assets | 0.47 | % | 0.09 | % | 0.83 | % | 0.28 | % | 0.89 | % | |||||||||
Return on average equity | 6.03 | % | 1.14 | % | 10.14 | % | 3.61 | % | 10.44 | % | |||||||||
Return on average tangible equity(1) | 8.50 | % | 2.70 | % | 13.13 | % | 5.65 | % | 13.35 | % | |||||||||
Efficiency ratio(1) | 71.13 | % | 62.32 | % | 56.57 | % | 66.56 | % | 58.46 | % | |||||||||
Net interest margin, tax equivalent(1) | 2.52 | % | 2.75 | % | 2.87 | % | 2.63 | % | 2.83 | % | |||||||||
Loans to deposits ratio | 73.80 | % | 70.55 | % | 65.21 | % | 73.80 | % | 65.21 | % | |||||||||
Uninsured deposits excluding collateralized municipal deposits ratio | 20.05 | % | 18.54 | % | 24.11 | % | 20.05 | % | 24.11 | % | |||||||||
Common equity ratio | 7.69 | % | 7.81 | % | 7.59 | % | 7.69 | % | 7.59 | % | |||||||||
Tangible common equity ratio(1) | 6.40 | % | 6.48 | % | 6.18 | % | 6.40 | % | 6.18 | % | |||||||||
Credit Risk Profile: | |||||||||||||||||||
Total nonperforming loans | $ | 14,448 | $ | 14,442 | $ | 27,337 | $ | 14,448 | $ | 27,337 | |||||||||
Nonperforming loans ratio | 0.36 | % | 0.37 | % | 0.76 | % | 0.36 | % | 0.76 | % | |||||||||
Total nonperforming assets | $ | 14,448 | $ | 14,442 | $ | 27,621 | $ | 14,448 | $ | 27,621 | |||||||||
Nonperforming assets ratio | 0.22 | % | 0.23 | % | 0.43 | % | 0.22 | % | 0.43 | % | |||||||||
Net charge-offs | $ | 897 | $ | 333 | $ | 281 | $ | 1,230 | $ | 2,503 | |||||||||
Net charge-off ratio | 0.09 | % | 0.03 | % | 0.03 | % | 0.06 | % | 0.15 | % | |||||||||
Allowance for credit losses | $ | 50,400 | $ | 49,800 | $ | 52,350 | $ | 50,400 | $ | 52,350 | |||||||||
Allowance for credit losses ratio | 1.25 | % | 1.27 | % | 1.45 | % | 1.25 | % | 1.45 | % | |||||||||
Allowance for credit losses to nonaccrual ratio | 355.03 | % | 344.88 | % | 201.52 | % | 355.03 | % | 201.52 | % | |||||||||
(1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. | |||||||||||||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
Three Months Ended | ||||||||||||||||||||||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | ||||||||||||||||||||||||
(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) | $ | 4,003,717 | $ | 50,439 | 5.05 | % | $ | 3,867,110 | $ | 47,206 | 4.95 | % | $ | 3,326,269 | $ | 33,315 | 4.02 | % | ||||||||
Taxable investment securities | 1,698,003 | 9,734 | 2.30 | % | 1,811,388 | 10,444 | 2.34 | % | 1,923,155 | 9,576 | 2.00 | % | ||||||||||||||
Tax-exempt investment securities (2)(4) | 345,934 | 2,253 | 2.61 | % | 397,110 | 2,649 | 2.71 | % | 439,385 | 2,975 | 2.72 | % | ||||||||||||||
Total securities held for investment(2) | 2,043,937 | 11,987 | 2.35 | % | 2,208,498 | 13,093 | 2.40 | % | 2,362,540 | 12,551 | 2.13 | % | ||||||||||||||
Other | 9,078 | 68 | 3.00 | % | 24,848 | 244 | 3.98 | % | 30,016 | 40 | 0.53 | % | ||||||||||||||
Total interest earning assets(2) | $ | 6,056,732 | $ | 62,494 | 4.14 | % | $ | 6,100,456 | $ | 60,543 | 4.02 | % | $ | 5,718,825 | $ | 45,906 | 3.22 | % | ||||||||
Other assets | 409,078 | 423,609 | 360,125 | |||||||||||||||||||||||
Total assets | $ | 6,465,810 | $ | 6,524,065 | $ | 6,078,950 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Interest checking deposits | $ | 1,420,741 | $ | 1,971 | 0.56 | % | $ | 1,515,845 | $ | 1,849 | 0.49 | % | $ | 1,641,337 | $ | 1,189 | 0.29 | % | ||||||||
Money market deposits | 999,436 | 5,299 | 2.13 | % | 930,543 | 3,269 | 1.42 | % | 1,003,386 | 571 | 0.23 | % | ||||||||||||||
Savings deposits | 603,905 | 288 | 0.19 | % | 653,043 | 272 | 0.17 | % | 662,449 | 287 | 0.17 | % | ||||||||||||||
Time deposits | 1,490,332 | 12,559 | 3.38 | % | 1,417,688 | 9,929 | 2.84 | % | 836,143 | 1,126 | 0.54 | % | ||||||||||||||
Total interest bearing deposits | 4,514,414 | 20,117 | 1.79 | % | 4,517,119 | 15,319 | 1.38 | % | 4,143,315 | 3,173 | 0.31 | % | ||||||||||||||
Securities sold under agreements to repurchase | 159,583 | 423 | 1.06 | % | 145,809 | 450 | 1.25 | % | 154,107 | 111 | 0.29 | % | ||||||||||||||
Other short-term borrowings | 132,495 | 1,695 | 5.13 | % | 111,306 | 1,336 | 4.87 | % | 41,859 | 118 | 1.13 | % | ||||||||||||||
Short-term borrowings | 292,078 | 2,118 | 2.91 | % | 257,115 | 1,786 | 2.82 | % | 195,966 | 229 | 0.47 | % | ||||||||||||||
Long-term debt | 135,329 | 2,153 | 6.38 | % | 139,208 | 2,124 | 6.19 | % | 144,440 | 1,602 | 4.45 | % | ||||||||||||||
Total borrowed funds | 427,407 | 4,271 | 4.01 | % | 396,323 | 3,910 | 4.00 | % | 340,406 | 1,831 | 2.16 | % | ||||||||||||||
Total interest bearing liabilities | $ | 4,941,821 | $ | 24,388 | 1.98 | % | $ | 4,913,442 | $ | 19,229 | 1.59 | % | $ | 4,483,721 | $ | 5,004 | 0.45 | % | ||||||||
Noninterest bearing deposits | 940,103 | 1,029,575 | 1,038,612 | |||||||||||||||||||||||
Other liabilities | 78,898 | 82,501 | 57,157 | |||||||||||||||||||||||
Shareholders’ equity | 504,988 | 498,547 | 499,460 | |||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,465,810 | $ | 6,524,065 | $ | 6,078,950 | ||||||||||||||||||||
Net interest income(2) | $ | 38,106 | $ | 41,314 | $ | 40,902 | ||||||||||||||||||||
Net interest spread(2) | 2.16 | % | 2.43 | % | 2.77 | % | ||||||||||||||||||||
Net interest margin(2) | 2.52 | % | 2.75 | % | 2.87 | % | ||||||||||||||||||||
Total deposits(5) | $ | 5,454,517 | $ | 20,117 | 1.48 | % | $ | 5,546,694 | $ | 15,319 | 1.12 | % | $ | 5,181,927 | $ | 3,173 | 0.25 | % | ||||||||
Cost of funds(6) | 1.66 | % | 1.31 | % | 0.36 | % |
(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. AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
Six Months Ended | |||||||||||||||||
June 30, 2023 | June 30, 2022 | ||||||||||||||||
(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) | $ | 3,935,791 | $ | 97,645 | 5.00 | % | $ | 3,286,083 | $ | 65,173 | 4.00 | % | |||||
Taxable investment securities | 1,754,382 | 20,178 | 2.32 | % | 1,879,773 | 17,699 | 1.90 | % | |||||||||
Tax-exempt investment securities (2)(4) | 371,381 | 4,902 | 2.66 | % | 444,936 | 5,973 | 2.71 | % | |||||||||
Total securities held for investment(2) | 2,125,763 | 25,080 | 2.38 | % | 2,324,709 | 23,672 | 2.05 | % | |||||||||
Other | 16,919 | 312 | 3.72 | % | 42,983 | 68 | 0.32 | % | |||||||||
Total interest earning assets(2) | $ | 6,078,473 | $ | 123,037 | 4.08 | % | $ | 5,653,775 | $ | 88,913 | 3.17 | % | |||||
Other assets | 416,304 | 343,456 | |||||||||||||||
Total assets | $ | 6,494,777 | $ | 5,997,231 | |||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||
Interest checking deposits | $ | 1,468,030 | $ | 3,820 | 0.52 | % | $ | 1,601,093 | $ | 2,250 | 0.28 | % | |||||
Money market deposits | 965,180 | 8,568 | 1.79 | % | 978,801 | 1,070 | 0.22 | % | |||||||||
Savings deposits | 628,338 | 560 | 0.18 | % | 652,134 | 566 | 0.18 | % | |||||||||
Time deposits | 1,454,210 | 22,488 | 3.12 | % | 859,938 | 2,197 | 0.52 | % | |||||||||
Total interest bearing deposits | 4,515,758 | 35,436 | 1.58 | % | 4,091,966 | 6,083 | 0.30 | % | |||||||||
Securities sold under agreements to repurchase | 152,734 | 873 | 1.15 | % | 156,747 | 207 | 0.27 | % | |||||||||
Other short-term borrowings | 121,959 | 3,031 | 5.01 | % | 22,551 | 141 | 1.26 | % | |||||||||
Short-term borrowings | 274,693 | 3,904 | 2.87 | % | 179,298 | 348 | 0.39 | % | |||||||||
Long-term debt | 137,258 | 4,277 | 6.28 | % | 142,426 | 3,089 | 4.37 | % | |||||||||
Total borrowed funds | 411,951 | 8,181 | 4.00 | % | 321,724 | 3,437 | 2.15 | % | |||||||||
Total interest bearing liabilities | $ | 4,927,709 | $ | 43,617 | 1.78 | % | $ | 4,413,690 | $ | 9,520 | 0.43 | % | |||||
Noninterest bearing deposits | 984,592 | 1,021,402 | |||||||||||||||
Other liabilities | 80,690 | 50,054 | |||||||||||||||
Shareholders’ equity | 501,786 | 512,085 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,494,777 | $ | 5,997,231 | |||||||||||||
Net interest income(2) | $ | 79,420 | $ | 79,393 | |||||||||||||
Net interest spread(2) | 2.30 | % | 2.74 | % | |||||||||||||
Net interest margin(2) | 2.63 | % | 2.83 | % | |||||||||||||
Total deposits(5) | $ | 5,500,350 | $ | 35,436 | 1.30 | % | $ | 5,113,368 | $ | 6,083 | 0.24 | % | |||||
Cost of funds(6) | 1.49 | % | 0.35 | % |
(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, and adjusted earnings. Management believes these measures provide investors with useful information regarding the Company’s profitability, financial condition and capital adequacy, consistent with how management evaluates the Company’s financial performance. The following tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP measure.
Tangible Common Equity/Tangible Book Value | ||||||||||||||||||||
per Share/Tangible Common Equity Ratio | June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||
(Dollars in thousands, except per share data) | 2023 | 2023 | 2022 | 2022 | 2022 | |||||||||||||||
Total shareholders’ equity | $ | 501,341 | $ | 500,650 | $ | 492,793 | $ | 472,229 | $ | 488,832 | ||||||||||
Intangible assets, net | (89,446 | ) | (91,040 | ) | (92,792 | ) | (94,563 | ) | (96,351 | ) | ||||||||||
Tangible common equity | $ | 411,895 | $ | 409,610 | $ | 400,001 | $ | 377,666 | $ | 392,481 | ||||||||||
Total assets | $ | 6,521,489 | $ | 6,409,952 | $ | 6,577,876 | $ | 6,491,061 | $ | 6,442,491 | ||||||||||
Intangible assets, net | (89,446 | ) | (91,040 | ) | (92,792 | ) | (94,563 | ) | (96,351 | ) | ||||||||||
Tangible assets | $ | 6,432,043 | $ | 6,318,912 | $ | 6,485,084 | $ | 6,396,498 | $ | 6,346,140 | ||||||||||
Book value per share | $ | 31.96 | $ | 31.94 | $ | 31.54 | $ | 30.23 | $ | 31.26 | ||||||||||
Tangible book value per share(1) | $ | 26.26 | $ | 26.13 | $ | 25.60 | $ | 24.17 | $ | 25.10 | ||||||||||
Shares outstanding | 15,685,123 | 15,675,325 | 15,623,977 | 15,622,825 | 15,635,131 | |||||||||||||||
Common equity ratio | 7.69 | % | 7.81 | % | 7.49 | % | 7.28 | % | 7.59 | % | ||||||||||
Tangible common equity ratio(2) | 6.40 | % | 6.48 | % | 6.17 | % | 5.90 | % | 6.18 | % |
(1) Tangible common equity divided by shares outstanding.
(2) Tangible common equity divided by tangible assets.
Three Months Ended | Six Months Ended | |||||||||||||||||||
Return on Average Tangible Equity | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Net income | $ | 7,594 | $ | 1,397 | $ | 12,621 | $ | 8,991 | $ | 26,516 | ||||||||||
Intangible amortization, net of tax(1) | 1,196 | 1,314 | 962 | 2,510 | 1,883 | |||||||||||||||
Tangible net income | $ | 8,790 | $ | 2,711 | $ | 13,583 | $ | 11,501 | $ | 28,399 | ||||||||||
Average shareholders’ equity | $ | 504,988 | $ | 498,547 | $ | 499,460 | $ | 501,786 | $ | 512,085 | ||||||||||
Average intangible assets, net | (90,258 | ) | (92,002 | ) | (84,540 | ) | (91,125 | ) | (83,159 | ) | ||||||||||
Average tangible equity | $ | 414,730 | $ | 406,545 | $ | 414,920 | $ | 410,661 | $ | 428,926 | ||||||||||
Return on average equity | 6.03 | % | 1.14 | % | 10.14 | % | 3.61 | % | 10.44 | % | ||||||||||
Return on average tangible equity(2) | 8.50 | % | 2.70 | % | 13.13 | % | 5.65 | % | 13.35 | % |
(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 | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
(Dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Net interest income | $ | 36,962 | $ | 40,076 | $ | 39,725 | $ | 77,038 | $ | 77,061 | ||||||||||
Tax equivalent adjustments: | ||||||||||||||||||||
Loans(1) | 713 | 716 | 569 | 1,429 | 1,109 | |||||||||||||||
Securities(1) | 431 | 522 | 608 | 953 | 1,223 | |||||||||||||||
Net interest income, tax equivalent | $ | 38,106 | $ | 41,314 | $ | 40,902 | $ | 79,420 | $ | 79,393 | ||||||||||
Loan purchase discount accretion | (984 | ) | (1,189 | ) | (528 | ) | (2,173 | ) | (1,260 | ) | ||||||||||
Core net interest income | $ | 37,122 | $ | 40,125 | $ | 40,374 | $ | 77,247 | $ | 78,133 | ||||||||||
Net interest margin | 2.45 | % | 2.66 | % | 2.79 | % | 2.56 | % | 2.75 | % | ||||||||||
Net interest margin, tax equivalent(2) | 2.52 | % | 2.75 | % | 2.87 | % | 2.63 | % | 2.83 | % | ||||||||||
Core net interest margin(3) | 2.46 | % | 2.67 | % | 2.83 | % | 2.56 | % | 2.79 | % | ||||||||||
Average interest earning assets | $ | 6,056,732 | $ | 6,100,456 | $ | 5,718,825 | $ | 6,078,473 | $ | 5,653,775 |
(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 | Six Months Ended | |||||||||||||||||||
Loan Yield, Tax Equivalent / Core Yield on Loans | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Loan interest income, including fees | $ | 49,726 | $ | 46,490 | $ | 32,746 | $ | 96,216 | $ | 64,064 | ||||||||||
Tax equivalent adjustment(1) | 713 | 716 | 569 | 1,429 | 1,109 | |||||||||||||||
Tax equivalent loan interest income | $ | 50,439 | $ | 47,206 | $ | 33,315 | $ | 97,645 | $ | 65,173 | ||||||||||
Loan purchase discount accretion | (984 | ) | (1,189 | ) | (528 | ) | (2,173 | ) | (1,260 | ) | ||||||||||
Core loan interest income | $ | 49,455 | $ | 46,017 | $ | 32,787 | $ | 95,472 | $ | 63,913 | ||||||||||
Yield on loans | 4.98 | % | 4.88 | % | 3.95 | % | 4.93 | % | 3.93 | % | ||||||||||
Yield on loans, tax equivalent(2) | 5.05 | % | 4.95 | % | 4.02 | % | 5.00 | % | 4.00 | % | ||||||||||
Core yield on loans(3) | 4.95 | % | 4.83 | % | 3.95 | % | 4.89 | % | 3.92 | % | ||||||||||
Average loans | $ | 4,003,717 | $ | 3,867,110 | $ | 3,326,269 | $ | 3,935,791 | $ | 3,286,083 |
(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 | Six Months Ended | |||||||||||||||||||
Efficiency Ratio | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
(Dollars in thousands) | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Total noninterest expense | $ | 34,919 | $ | 33,319 | $ | 32,082 | $ | 68,238 | $ | 63,725 | ||||||||||
Amortization of intangibles | (1,594 | ) | (1,752 | ) | (1,283 | ) | (3,346 | ) | (2,510 | ) | ||||||||||
Merger-related expenses | — | (136 | ) | (901 | ) | (136 | ) | (1,029 | ) | |||||||||||
Noninterest expense used for efficiency ratio | $ | 33,325 | $ | 31,431 | $ | 29,898 | $ | 64,756 | $ | 60,186 | ||||||||||
Net interest income, tax equivalent(1) | $ | 38,106 | $ | 41,314 | $ | 40,902 | $ | 79,420 | $ | 79,393 | ||||||||||
Plus: Noninterest income | 8,746 | (4,046 | ) | 12,347 | 4,700 | 23,991 | ||||||||||||||
Less: Investment securities (losses) gains, net | (2 | ) | (13,170 | ) | 395 | (13,172 | ) | 435 | ||||||||||||
Net revenues used for efficiency ratio | $ | 46,854 | $ | 50,438 | $ | 52,854 | $ | 97,292 | $ | 102,949 | ||||||||||
Efficiency ratio (2) | 71.13 | % | 62.32 | % | 56.57 | % | 66.56 | % | 58.46 | % |
(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 | Six Months Ended | ||||||||||||||
Adjusted Earnings | June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||
(Dollars in thousands, except per share data) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||
Net income | $ | 7,594 | $ | 1,397 | $ | 12,621 | $ | 8,991 | $ | 26,516 | |||||
After tax loss on sale of debt securities(1) | — | 9,837 | — | 9,837 | — | ||||||||||
Adjusted earnings | $ | 7,594 | $ | 11,234 | $ | 12,621 | $ | 18,828 | $ | 26,516 | |||||
Weighted average diluted common shares outstanding | 15,689 | 15,691 | 15,688 | 15,688 | 15,703 | ||||||||||
Earnings per common share | |||||||||||||||
Earnings per common share - diluted | $ | 0.48 | $ | 0.09 | $ | 0.80 | $ | 0.57 | $ | 1.69 | |||||
Adjusted earnings per common share - diluted (2) | $ | 0.48 | $ | 0.72 | $ | 0.80 | $ | 1.20 | $ | 1.69 |
(1) The income tax rate utilized was
(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 |