MidWestOne Financial Group, Inc. (Nasdaq - MOFG) (“we”, “our”, or
“the Company”) today reported its financial results for the first
quarter of 2019. Net income for the first quarter of 2019 was $7.3
million, or $0.60 per diluted common share, compared to net income
of $7.6 million, or $0.62 per diluted common share, for the fourth
quarter of 2018 (the “linked quarter”). Merger-related costs
reduced diluted earnings per share by $0.01 for the first quarter
of 2019, and $0.02 for the linked quarter.
FINANCIAL HIGHLIGHTS
| |
As of or For the Three Months
Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
| |
2019 |
|
2018 |
|
2018 |
| |
|
| |
(Dollars in thousands, except per share
amounts) |
| Net income |
$ |
7,285 |
|
|
$ |
7,624 |
|
|
$ |
7,793 |
|
| Diluted earnings per
share |
$ |
0.60 |
|
|
$ |
0.62 |
|
|
$ |
0.64 |
|
| Return on average
assets |
0.89 |
% |
|
0.92 |
% |
|
0.98 |
% |
| Return on average
equity |
8.22 |
% |
|
8.61 |
% |
|
9.28 |
% |
| Return on average
tangible equity (1) |
10.85 |
% |
|
11.47 |
% |
|
12.70 |
% |
| |
|
|
|
|
|
| Net interest margin
(tax equivalent)(1) |
3.56 |
% |
|
3.59 |
% |
|
3.69 |
% |
| Yield on average loans
(tax equivalent)(1) |
4.93 |
% |
|
4.85 |
% |
|
4.72 |
% |
| Cost of average total
deposits |
0.88 |
% |
|
0.78 |
% |
|
0.55 |
% |
| Efficiency
ratio(1) |
63.00 |
% |
|
58.43 |
% |
|
60.24 |
% |
| |
|
|
|
|
|
| Total assets |
$ |
3,308,975 |
|
|
$ |
3,291,480 |
|
|
$ |
3,241,642 |
|
| Loans held for
investment, net of unearned income |
$ |
2,403,759 |
|
|
$ |
2,398,779 |
|
|
$ |
2,326,158 |
|
| Total deposits |
$ |
2,684,827 |
|
|
$ |
2,612,929 |
|
|
$ |
2,631,921 |
|
| |
|
|
|
|
|
| Equity to assets
ratio |
11.00 |
% |
|
10.85 |
% |
|
10.53 |
% |
| Tangible
equity/tangible assets(1) |
8.97 |
% |
|
8.80 |
% |
|
8.41 |
% |
| Book value per
share |
$ |
29.94 |
|
|
$ |
29.32 |
|
|
$ |
27.95 |
|
| Tangible book value per
share(1) |
$ |
23.89 |
|
|
$ |
23.25 |
|
|
$ |
21.81 |
|
| Gross loans held for
investment to deposit ratio |
89.74 |
% |
|
91.80 |
% |
|
88.38 |
% |
| |
|
|
|
|
|
| (1)
Non-GAAP measure. See pages 13-14 for a detailed explanation. |
Charles Funk, President and CEO commented,
”Better than expected deposit growth - some of which is seasonal,
was a highlight of the first quarter of 2019. The quarter’s results
were adversely affected by a larger than anticipated loan loss
provision of $1.6 million. However, we remain comfortable with our
prior guidance of $4 to $6 million for the loan loss provision for
the year of 2019.”
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income decreased in the first
quarter of 2019 to $26.0 million from $26.6 million in the linked
quarter due primarily to the cost of deposits rising faster than
asset yields. The loan yield was 4.93% for the first quarter of
2019 compared to 4.85% for the linked quarter. The increased loan
yield reflected higher coupon interest and an increase in discount
accretion on acquired loans. Discount accretion on acquired loans
increased to $586 thousand in the current quarter compared to $454
thousand in the linked quarter. The total remaining acquired loan
discount as of March 31, 2019 was $5.2 million. The linked
quarter also included $89 thousand in interest reversals from
nonaccrual loans compared to $160 thousand in the first quarter of
2019.
The tax equivalent net interest margin (NIM)
decreased to 3.56% for the first quarter of 2019 from 3.59% in the
linked quarter. The decrease in the NIM was due primarily to higher
yields on average loans being more than offset by higher deposit
and borrowing costs. Loan purchase discount accretion added 8 bps
to the NIM in the current quarter compared to 6 bps in the linked
quarter.
The cost of average total deposits in the first
quarter of 2019 was 0.88% compared to 0.78% in the linked quarter.
The increase reflects the higher rates paid to attract and retain
deposits in light of recent market rate increases and the
competitive market for deposits.
Noninterest Income
Noninterest income for the first quarter of 2019
decreased $386 thousand, or 7%, from the linked quarter. The
decrease was primarily due to a decrease of $491 thousand in loan
revenue, of which $253 thousand was related to the valuation of our
mortgage servicing rights, with the remainder attributable
primarily to lower mortgage and SBA loan activity. Service charges
and fees decreased $114 thousand, or 7%, in the first quarter of
2019 compared to the linked quarter mainly due to lower
nonsufficient funds charges. Insurance commissions increased $160
thousand, or 62%, between the two periods due primarily to an
increase in commission and contingency income.
“Investment services and trust as well as our
insurance unit are off to a strong start,” stated Mr. Funk. “Our
residential mortgage originations were adversely affected by, among
other things, the extremely cold weather in most of our footprint
during the first quarter. We are already seeing significant
improvement in April in terms of the loan pipeline.”
The following table presents details of
noninterest income for the periods indicated:
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
| Noninterest
Income |
2019 |
|
2018 |
|
2018 |
| |
|
| |
(In thousands) |
| Investment services and
trust activities |
$ |
1,390 |
|
|
$ |
1,274 |
|
|
$ |
1,239 |
|
| Service charges and
fees |
1,442 |
|
|
1,556 |
|
|
1,571 |
|
| Card revenue |
998 |
|
|
1,095 |
|
|
966 |
|
| Loan revenue |
393 |
|
|
884 |
|
|
941 |
|
| Bank-owned life
insurance |
392 |
|
|
381 |
|
|
433 |
|
| Insurance
commissions |
420 |
|
|
260 |
|
|
401 |
|
| Investment securities
gains (losses), net |
17 |
|
|
(4 |
) |
|
9 |
|
| Other |
358 |
|
|
350 |
|
|
121 |
|
| Total
noninterest income |
$ |
5,410 |
|
|
$ |
5,796 |
|
|
$ |
5,681 |
|
Noninterest Expense
Noninterest expense for the first quarter of
2019 increased $0.8 million, or 4.2%, from the linked quarter. The
increase was driven by occupancy expense of premises, net, and
salaries and employee benefits. Occupancy expense of premises, net,
increased $0.7 million, as the linked quarter included a $743 gain
on the sale of a former bank administration building.
Salaries and employee benefits increased $468 thousand primarily
from normal annual salary and benefit cost adjustments. Most other
noninterest expense categories experienced a decline compared to
the linked quarter.
The following table presents details of
noninterest expense for the periods indicated:
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
| Noninterest
Expense |
2019 |
|
2018 |
|
2018 |
| |
|
| |
(In thousands) |
| Compensation and
employee benefits |
$ |
12,579 |
|
|
$ |
12,111 |
|
|
$ |
12,371 |
|
| Occupancy expense of
premises, net |
1,879 |
|
|
1,166 |
|
|
1,906 |
|
| Equipment |
1,371 |
|
|
1,433 |
|
|
1,383 |
|
| Legal and
professional |
965 |
|
|
1,027 |
|
|
794 |
|
| Data processing |
845 |
|
|
875 |
|
|
688 |
|
| Marketing |
606 |
|
|
678 |
|
|
620 |
|
| Amortization of
intangibles |
452 |
|
|
503 |
|
|
657 |
|
| FDIC insurance |
370 |
|
|
429 |
|
|
319 |
|
| Communications |
342 |
|
|
342 |
|
|
329 |
|
| Foreclosed assets,
net |
58 |
|
|
46 |
|
|
(39 |
) |
| Other |
1,150 |
|
|
1,169 |
|
|
1,200 |
|
| Total
noninterest expense |
$ |
20,617 |
|
|
$ |
19,779 |
|
|
$ |
20,228 |
|
The following table presents details of merger-related costs for
the periods indicated:
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
| Merger-related
Expenses |
2019 |
|
2018 |
| |
|
| |
(In thousands) |
| Compensation and
employee benefits |
$ |
10 |
|
|
$ |
— |
|
| Occupancy expense of
premises, net |
— |
|
|
2 |
|
| Legal and
professional |
126 |
|
|
89 |
|
| Data processing |
5 |
|
|
100 |
|
| Other |
26 |
|
|
15 |
|
| Total
merger-related costs |
$ |
167 |
|
|
$ |
206 |
|
Income Taxes
The effective income tax rate was 20.6% for the
first quarter of 2019 and 18.2% for the linked quarter. The
effective tax rate for the first quarter of 2019 was higher due
primarily to certain tax credits recognized during the linked
quarter.
BALANCE SHEET HIGHLIGHTS
Loans Held for Investment
Loans held for investment, net of unearned
income, increased $5.0 million, or 0.2%, to $2.40 billion at
March 31, 2019. Loan portfolio segments experiencing the
largest increases were commercial real estate and commercial and
industrial. As of March 31, 2019, commercial real estate loans
comprised approximately 53% of the loan portfolio. Commercial and
industrial loans was the next largest category at 22% of total
loans, followed by residential real estate loans at 19%,
agricultural loans at 4%, and consumer loans at 2%.
Mr. Funk continued, ”Overall loan originations
were decent in the first quarter of 2019, but we experienced a
higher than normal level of loan pay-offs, which kept loan growth
in check.”
The following table presents the composition of
loans held for investment, net of unearned income, as of the dates
indicated:
| |
March 31, |
|
December 31, |
|
March 31, |
| Loans Held for
Investment |
2019 |
|
2018 |
|
2018 |
| |
|
| |
(In thousands) |
| Commercial and
industrial |
$ |
535,878 |
|
|
$ |
533,188 |
|
|
$ |
513,778 |
|
| Agricultural |
96,766 |
|
|
96,956 |
|
|
111,975 |
|
| Commercial real
estate |
|
|
|
|
|
|
Construction and development |
187,906 |
|
|
217,617 |
|
|
194,712 |
|
|
Farmland |
86,648 |
|
|
88,807 |
|
|
87,030 |
|
|
Multifamily |
161,067 |
|
|
134,741 |
|
|
126,802 |
|
|
Other |
843,817 |
|
|
826,163 |
|
|
789,902 |
|
| Total
commercial real estate |
1,279,438 |
|
|
1,267,328 |
|
|
1,198,446 |
|
| Residential real
estate |
|
|
|
|
|
|
One-to-four family first liens |
333,220 |
|
|
341,830 |
|
|
349,742 |
|
|
One-to-four family junior liens |
121,793 |
|
|
120,049 |
|
|
116,187 |
|
| Total
residential real estate |
455,013 |
|
|
461,879 |
|
|
465,929 |
|
| Consumer |
36,664 |
|
|
39,428 |
|
|
36,030 |
|
|
Loans held for investment, net of unearned income |
$ |
2,403,759 |
|
|
$ |
2,398,779 |
|
|
$ |
2,326,158 |
|
Provision and Allowance for Loan
Losses
For the first quarter of 2019, the provision for
loan losses was $1.6 million, a decrease of $1.7 million from the
linked quarter. The provision for loan losses for the first quarter
of 2019 resulted from net charge-offs experienced during the period
and the recognition of small impairments on several credit
relationships.
The following table shows the activity in the
allowance for loan losses for the periods indicated:
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
March 31, |
| Allowance for
Loan Losses Roll Forward |
2019 |
|
2018 |
|
2018 |
| |
|
| |
(In thousands) |
| Beginning balance |
$ |
29,307 |
|
|
$ |
31,278 |
|
|
$ |
28,059 |
|
|
Charge-offs |
(1,355 |
) |
|
(5,456 |
) |
|
(476 |
) |
|
Recoveries |
106 |
|
|
235 |
|
|
238 |
|
| Net
charge-offs |
(1,249 |
) |
|
(5,221 |
) |
|
(238 |
) |
| Provision
for loan losses |
1,594 |
|
|
3,250 |
|
|
1,850 |
|
| Ending balance |
$ |
29,652 |
|
|
$ |
29,307 |
|
|
$ |
29,671 |
|
Deposits
Total deposits at March 31, 2019, were
$2.68 billion, an increase of $71.9 million from December 31,
2018. The mix of deposits reflected increases between
December 31, 2018 and March 31, 2019 of $6.9 million, or
0.9%, in time deposits, $74.0 million, or 13.3% in money market
deposits, and $12.9 million, or 1.9%, in interest checking
deposits. These increases were partially offset by a decrease,
between the two dates, of $12.4 million, or 2.8%, in noninterest
bearing deposits, and $9.4 million, or 4.5%, in savings
deposits.
The following table presents the composition of
our deposit portfolio as of the dates indicated:
| |
March 31, |
|
December 31, |
|
March 31, |
| Deposit
Composition |
2019 |
|
2018 |
|
2018 |
| |
|
| |
(In thousands) |
| Noninterest bearing
demand |
$ |
426,729 |
|
|
$ |
439,133 |
|
|
$ |
450,168 |
|
| Interest checking |
696,760 |
|
|
683,894 |
|
|
698,895 |
|
| Money market |
629,838 |
|
|
555,839 |
|
|
541,313 |
|
| Savings |
200,998 |
|
|
210,416 |
|
|
215,940 |
|
| Total
non-maturity deposits |
1,954,325 |
|
|
1,889,282 |
|
|
1,906,316 |
|
| Time deposits less than
$100,000 |
358,436 |
|
|
352,631 |
|
|
332,727 |
|
| Time deposits of
$100,000 to $250,000 |
182,874 |
|
|
179,764 |
|
|
170,742 |
|
| Time deposits of
$250,000 and over |
189,192 |
|
|
191,252 |
|
|
222,136 |
|
| Total
time deposits |
730,502 |
|
|
723,647 |
|
|
725,605 |
|
| Total
deposits |
$ |
2,684,827 |
|
|
$ |
2,612,929 |
|
|
$ |
2,631,921 |
|
CREDIT QUALITY
Nonaccrual loans increased $1.4 million between
December 31, 2018 and March 31, 2019, primarily due to
$5.5 million being added to nonaccrual status, partially offset by
$2.1 million of payments, net charge-offs of $1.0 million, $0.8
million coming out of nonaccrual status, and $0.2 million
transferred to foreclosed assets, net. The balance of loans
modified in a troubled debt restructuring (“TDRs”) decreased $0.1
million from year-end 2018, primarily due to payments of $0.2
million, partially offset by $0.1 being added to TDR status. Loans
90 days or more past due and still accruing interest decreased $157
thousand between December 31, 2018, and March 31, 2019.
At March 31, 2019, net foreclosed assets totaled $336
thousand, down from $535 thousand at December 31, 2018. As of
March 31, 2019, the allowance for loan losses was $29.7
million, or 1.23% of loans held for investment, net of unearned
income, compared with $29.3 million, or 1.28% at December 31,
2018.
The following table presents selected loan
credit quality metrics as of the dates indicated:
| |
March 31, |
|
December 31, |
|
March 31, |
| Credit Quality
Metrics |
2019 |
|
2018 |
|
2018 |
| |
|
| |
(dollars in thousands) |
| Nonaccrual loans held
for investment |
$ |
21,274 |
|
|
$ |
19,924 |
|
|
$ |
13,566 |
|
| Performing troubled
debt restructured loans held for investment |
5,161 |
|
|
5,284 |
|
|
9,623 |
|
| Accruing loans
contractually past due 90 days or more |
208 |
|
|
365 |
|
|
116 |
|
| Foreclosed assets,
net |
336 |
|
|
535 |
|
|
1,001 |
|
| Total
nonperforming assets |
$ |
26,979 |
|
|
$ |
26,108 |
|
|
$ |
24,306 |
|
| Allowance for loan
losses |
29,652 |
|
|
29,307 |
|
|
29,671 |
|
| Provision for loan
losses (for the quarter) |
1,594 |
|
|
3,250 |
|
|
1,850 |
|
| Net charge-offs (for
the quarter) |
1,249 |
|
|
5,221 |
|
|
238 |
|
| Net charge-offs to
average loans held for investment (for the quarter) |
0.21 |
% |
|
0.86 |
% |
|
0.04 |
% |
| Allowance for loan
losses to loans held for investment, net of unearned income |
1.23 |
% |
|
1.22 |
% |
|
1.28 |
% |
| Allowance for loan
losses to nonaccrual loans held for investment, net of unearned
income |
139.38 |
% |
|
147.09 |
% |
|
218.72 |
% |
| Nonaccrual loans held
for investment to loans held for investment, net of unearned
income |
0.89 |
% |
|
0.83 |
% |
|
0.58 |
% |
“Our loan loss allowance covers 139.4% of our
total nonaccrual loans and we believe this reflects a strong
position,” noted Mr. Funk. “We are continuing to work on lowering
our level of nonperforming loans.”
CORPORATE UPDATE
Share Repurchase Program
During the first quarter of 2019 the Company
repurchased 49,216 shares at an average price of $26.41 and a total
cost of $1.3 million. At March 31, 2019, $2.7 million remained
available to repurchase shares under the Company’s current share
repurchase program.
Quarterly Cash Dividend
Declared
On April 18, 2019, the Company’s board of
directors declared a quarterly cash dividend of $0.2025 per common
share, the same as the dividend paid in the previous quarter. The
dividend is payable June 17, 2019, to shareholders of record
at the close of business on April 29, 2019. At this quarterly
rate, the indicated annual cash dividend is equal to $0.81 per
common share.
CONFERENCE CALL DETAILS
The Company will host a conference call for
investors at 11:00 a.m., CDT, on Friday, April 26, 2019. To
participate, please dial 866-233-3483 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 26, 2019, by calling
877-344-7529 and using the replay access code of 10126189. A
transcript of the call will also be available on the company’s web
site (www.midwestone.com) within three business days of the
event.
ABOUT MIDWESTONE FINANCIAL GROUP,
INC.
MidWestOne Financial Group, Inc. is a financial
holding company headquartered in Iowa City, Iowa. MidWestOne
Financial 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.com. MidWestOne Financial
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) credit quality
deterioration or pronounced and sustained reduction in real estate
market values causing an increase in the allowance for credit
losses, an increase in the provision for loan losses, and a
reduction in net earnings; (2) the risks related to mergers,
including our pending merger with ATBancorp, 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; (3) our management’s
ability to reduce and effectively manage interest rate risk and the
impact of interest rates in general on the volatility of our net
interest income; (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)
legislative and regulatory changes, including changes in banking,
securities, trade, and tax laws and regulations and their
application by our regulators and changes in the scope and cost of
Federal Deposit Insurance Corporation insurance and other
coverages; (8) the ability to attract and retain key executives and
employees experienced in banking and financial services; (9) the
sufficiency of the allowance for loan losses to absorb the amount
of actual losses inherent in our existing loan portfolio; (10) our
ability to adapt successfully to technological changes to compete
effectively in the marketplace; (11) credit risks and risks from
concentrations (by geographic area and by industry) within our loan
portfolio; (12) the effects of competition from other commercial
banks, thrifts, mortgage banking firms, consumer finance companies,
credit unions, securities brokerage firms, insurance companies,
money market and other mutual funds, and other financial
institutions operating in our markets or elsewhere or providing
services similar to ours; (13) the failure of assumptions
underlying the establishment of allowances for loan losses and
estimation of values of collateral and various financial assets and
liabilities; (14) volatility of rate-sensitive deposits; (15)
operational risks, including data processing system failures or
fraud; (16) asset/liability matching risks and liquidity risks;
(17) the costs, effects and outcomes of existing or future
litigation; (18) changes in general economic or industry
conditions, nationally, internationally or in the communities in
which we conduct business; (19) changes in accounting policies and
practices, as may be adopted by state and federal regulatory
agencies and the Financial Accounting Standards Board; (20) war or
terrorist activities which may cause further deterioration in the
economy or cause instability in credit markets; (21) cyber-attacks;
(22) the imposition of tariffs or other domestic or international
governmental policies impacting the value of the agricultural or
other products of our borrowers; and (23) other risk factors
detailed from time to time in Securities and Exchange Commission
filings made by the Company.
MIDWESTONE FINANCIAL GROUP, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS
| |
March 31, |
|
December 31, |
| |
2019 |
|
2018 |
| |
|
| |
(In thousands) |
|
ASSETS |
|
|
|
| Cash and due from
banks |
$ |
40,002 |
|
|
$ |
43,787 |
|
| Interest
earning deposits in banks |
2,969 |
|
|
1,693 |
|
| Total
cash and cash equivalents |
42,971 |
|
|
45,480 |
|
| Debt
securities available for sale at fair value |
432,979 |
|
|
414,101 |
|
| Held to
maturity securities at amortized cost |
195,033 |
|
|
195,822 |
|
| Total
securities held for investment |
628,012 |
|
|
609,923 |
|
| Loans
held for sale |
309 |
|
|
666 |
|
| Gross
loans held for investment |
2,409,333 |
|
|
2,405,001 |
|
| Unearned
income, net |
(5,574 |
) |
|
(6,222 |
) |
| Loans
held for investment, net of unearned income |
2,403,759 |
|
|
2,398,779 |
|
| Allowance
for loan losses |
(29,652 |
) |
|
(29,307 |
) |
| Total
loans held for investment, net |
2,374,107 |
|
|
2,369,472 |
|
| Premises
and equipment, net |
75,200 |
|
|
75,773 |
|
|
Goodwill |
64,654 |
|
|
64,654 |
|
| Other
intangible assets, net |
9,423 |
|
|
9,875 |
|
|
Foreclosed assets, net |
336 |
|
|
535 |
|
| Other
assets |
113,963 |
|
|
115,102 |
|
| Total
assets |
$ |
3,308,975 |
|
|
$ |
3,291,480 |
|
|
LIABILITIES |
|
|
|
|
Noninterest bearing deposits |
$ |
426,729 |
|
|
$ |
439,133 |
|
| Interest
bearing deposits |
2,258,098 |
|
|
2,173,796 |
|
| Total
deposits |
2,684,827 |
|
|
2,612,929 |
|
|
Short-term borrowings |
76,066 |
|
|
131,422 |
|
| Long-term
debt |
162,471 |
|
|
168,726 |
|
| Other
liabilities |
21,762 |
|
|
21,336 |
|
| Total
liabilities |
2,945,126 |
|
|
2,934,413 |
|
| SHAREHOLDERS'
EQUITY |
|
|
|
| Common
stock |
12,463 |
|
|
12,463 |
|
|
Additional paid-in capital |
187,535 |
|
|
187,813 |
|
| Retained
earnings |
173,771 |
|
|
168,951 |
|
| Treasury
stock |
(7,297 |
) |
|
(6,499 |
) |
|
Accumulated other comprehensive loss |
(2,623 |
) |
|
(5,661 |
) |
| Total
shareholders' equity |
363,849 |
|
|
357,067 |
|
| Total
liabilities and shareholders' equity |
$ |
3,308,975 |
|
|
$ |
3,291,480 |
|
Certain reclassifications have been made to
prior periods’ consolidated financial statements to present them on
a basis comparable with the current period’s consolidated financial
statements.
MIDWESTONE FINANCIAL GROUP, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME
| |
|
Three Months Ended |
| |
|
March 31, |
|
December 31, |
|
March 31, |
| |
|
2019 |
|
2018 (1) |
|
2018 (1) |
| |
|
|
| |
|
(In thousands, except per share
data) |
| Interest
income |
|
|
|
|
|
|
| Loans, including
fees |
|
$ |
29,035 |
|
|
$ |
29,052 |
|
|
$ |
26,567 |
|
| Taxable
investment securities |
|
2,927 |
|
|
2,774 |
|
|
2,748 |
|
|
Tax-exempt investment securities |
|
1,406 |
|
|
1,375 |
|
|
1,529 |
|
|
Other |
|
20 |
|
|
23 |
|
|
9 |
|
| Total
interest income |
|
33,388 |
|
|
33,224 |
|
|
30,853 |
|
| Interest
expense |
|
|
|
|
|
|
|
Deposits |
|
5,695 |
|
|
5,161 |
|
|
3,536 |
|
|
Short-term borrowings |
|
457 |
|
|
374 |
|
|
261 |
|
| Long-term
debt |
|
1,260 |
|
|
1,136 |
|
|
882 |
|
| Total
interest expense |
|
7,412 |
|
|
6,671 |
|
|
4,679 |
|
| Net
interest income |
|
25,976 |
|
|
26,553 |
|
|
26,174 |
|
| Provision for
loan losses |
|
1,594 |
|
|
3,250 |
|
|
1,850 |
|
| Net
interest income after provision for loan losses |
|
24,382 |
|
|
23,303 |
|
|
24,324 |
|
| Noninterest
income |
|
|
|
|
|
|
|
Investment services and trust activities |
|
1,390 |
|
|
1,274 |
|
|
1,239 |
|
| Service
charges and fees |
|
1,442 |
|
|
1,556 |
|
|
1,571 |
|
| Card
revenue |
|
998 |
|
|
1,095 |
|
|
966 |
|
| Loan
revenue |
|
393 |
|
|
884 |
|
|
941 |
|
|
Bank-owned life insurance |
|
392 |
|
|
381 |
|
|
433 |
|
| Insurance
commissions |
|
420 |
|
|
260 |
|
|
401 |
|
|
Investment securities gains (losses), net |
|
17 |
|
|
(4 |
) |
|
9 |
|
|
Other |
|
358 |
|
|
350 |
|
|
121 |
|
| Total
noninterest income |
|
5,410 |
|
|
5,796 |
|
|
5,681 |
|
| Noninterest
expense |
|
|
|
|
|
|
|
Compensation and employee benefits |
|
12,579 |
|
|
12,111 |
|
|
12,371 |
|
| Occupancy
expense of premises, net |
|
1,879 |
|
|
1,166 |
|
|
1,906 |
|
|
Equipment |
|
1,371 |
|
|
1,433 |
|
|
1,383 |
|
| Legal and
professional |
|
965 |
|
|
1,027 |
|
|
794 |
|
| Data
processing |
|
845 |
|
|
875 |
|
|
688 |
|
|
Marketing |
|
606 |
|
|
678 |
|
|
620 |
|
|
Amortization of intangibles |
|
452 |
|
|
503 |
|
|
657 |
|
| FDIC
insurance |
|
370 |
|
|
429 |
|
|
319 |
|
|
Communications |
|
342 |
|
|
342 |
|
|
329 |
|
|
Foreclosed assets, net |
|
58 |
|
|
46 |
|
|
(39 |
) |
|
Other |
|
1,150 |
|
|
1,169 |
|
|
1,200 |
|
| Total
noninterest expense |
|
20,617 |
|
|
19,779 |
|
|
20,228 |
|
| Income
before income tax expense |
|
9,175 |
|
|
9,320 |
|
|
9,777 |
|
| Income tax expense |
|
1,890 |
|
|
1,696 |
|
|
1,984 |
|
|
Net income |
|
$ |
7,285 |
|
|
$ |
7,624 |
|
|
$ |
7,793 |
|
| Earnings per
common share |
|
|
|
|
|
|
|
Basic |
|
$ |
0.60 |
|
|
$ |
0.62 |
|
|
$ |
0.64 |
|
|
Diluted |
|
$ |
0.60 |
|
|
$ |
0.62 |
|
|
$ |
0.64 |
|
| Weighted average basic
common shares outstanding |
|
12,164 |
|
|
12,217 |
|
|
12,223 |
|
| Weighted average
diluted common shares outstanding |
|
12,177 |
|
|
12,235 |
|
|
12,242 |
|
| Dividends paid per
common share |
|
$ |
0.2025 |
|
|
$ |
0.195 |
|
|
$ |
0.195 |
|
(1) Reclassified to conform to the current
period’s presentation.
MIDWESTONE FINANCIAL GROUP, INC. AND
SUBSIDIARIESFIVE QUARTER CONSOLIDATED BALANCE
SHEETS
| |
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
| |
|
| |
(In thousands) |
|
ASSETS |
|
|
|
|
|
|
|
|
|
| Cash and due from
banks |
$ |
40,002 |
|
|
$ |
43,787 |
|
|
$ |
49,229 |
|
|
$ |
41,547 |
|
|
$ |
39,929 |
|
| Interest
earning deposits in banks |
2,969 |
|
|
1,693 |
|
|
4,150 |
|
|
1,717 |
|
|
2,467 |
|
| Total
cash and cash equivalents |
42,971 |
|
|
45,480 |
|
|
53,379 |
|
|
43,264 |
|
|
42,396 |
|
| Debt
securities available for sale at fair value |
432,979 |
|
|
414,101 |
|
|
407,766 |
|
|
438,312 |
|
|
446,087 |
|
| Held to
maturity securities at amortized cost |
195,033 |
|
|
195,822 |
|
|
191,733 |
|
|
192,896 |
|
|
194,617 |
|
| Total
securities held for investment |
628,012 |
|
|
609,923 |
|
|
599,499 |
|
|
631,208 |
|
|
640,704 |
|
| Loans
held for sale |
309 |
|
|
666 |
|
|
1,124 |
|
|
1,528 |
|
|
870 |
|
| Gross
loans held for investment |
2,409,333 |
|
|
2,405,001 |
|
|
2,384,459 |
|
|
2,371,406 |
|
|
2,334,074 |
|
| Unearned
income, net |
(5,574 |
) |
|
(6,222 |
) |
|
(6,810 |
) |
|
(7,371 |
) |
|
(7,916 |
) |
| Loans
held for investment, net of unearned income |
2,403,759 |
|
|
2,398,779 |
|
|
2,377,649 |
|
|
2,364,035 |
|
|
2,326,158 |
|
| Allowance
for loan losses |
(29,652 |
) |
|
(29,307 |
) |
|
(31,278 |
) |
|
(30,800 |
) |
|
(29,671 |
) |
| Total
loans held for investment, net |
2,374,107 |
|
|
2,369,472 |
|
|
2,346,371 |
|
|
2,333,235 |
|
|
2,296,487 |
|
| Premises
and equipment, net |
75,200 |
|
|
75,773 |
|
|
76,497 |
|
|
78,106 |
|
|
77,552 |
|
|
Goodwill |
64,654 |
|
|
64,654 |
|
|
64,654 |
|
|
64,654 |
|
|
64,654 |
|
| Other
intangible assets, net |
9,423 |
|
|
9,875 |
|
|
10,378 |
|
|
10,925 |
|
|
11,389 |
|
|
Foreclosed assets, net |
336 |
|
|
535 |
|
|
549 |
|
|
676 |
|
|
1,001 |
|
| Other
assets |
113,963 |
|
|
115,102 |
|
|
115,514 |
|
|
112,681 |
|
|
106,589 |
|
| Total
assets |
$ |
3,308,975 |
|
|
$ |
3,291,480 |
|
|
$ |
3,267,965 |
|
|
$ |
3,276,277 |
|
|
$ |
3,241,642 |
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Noninterest bearing deposits |
$ |
426,729 |
|
|
$ |
439,133 |
|
|
$ |
458,576 |
|
|
$ |
469,862 |
|
|
$ |
450,168 |
|
| Interest
bearing deposits |
2,258,098 |
|
|
2,173,796 |
|
|
2,173,683 |
|
|
2,134,339 |
|
|
2,181,753 |
|
| Total
deposits |
2,684,827 |
|
|
2,612,929 |
|
|
2,632,259 |
|
|
2,604,201 |
|
|
2,631,921 |
|
|
Short-term borrowings |
76,066 |
|
|
131,422 |
|
|
87,978 |
|
|
127,467 |
|
|
93,311 |
|
| Long-term
debt |
162,471 |
|
|
168,726 |
|
|
176,979 |
|
|
178,083 |
|
|
159,335 |
|
| Other
liabilities |
21,762 |
|
|
21,336 |
|
|
21,560 |
|
|
20,325 |
|
|
15,698 |
|
| Total
liabilities |
2,945,126 |
|
|
2,934,413 |
|
|
2,918,776 |
|
|
2,930,076 |
|
|
2,900,265 |
|
| SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
| Common
stock |
$ |
12,463 |
|
|
$ |
12,463 |
|
|
$ |
12,463 |
|
|
$ |
12,463 |
|
|
$ |
12,463 |
|
|
Additional paid-in capital |
187,535 |
|
|
187,813 |
|
|
187,581 |
|
|
187,304 |
|
|
187,188 |
|
| Retained
earnings |
173,771 |
|
|
168,951 |
|
|
163,709 |
|
|
159,315 |
|
|
153,542 |
|
| Treasury
stock |
(7,297 |
) |
|
(6,499 |
) |
|
(5,474 |
) |
|
(5,474 |
) |
|
(5,612 |
) |
|
Accumulated other comprehensive loss |
(2,623 |
) |
|
(5,661 |
) |
|
(9,090 |
) |
|
(7,407 |
) |
|
(6,204 |
) |
| Total
shareholders' equity |
363,849 |
|
|
357,067 |
|
|
349,189 |
|
|
346,201 |
|
|
341,377 |
|
| Total
liabilities and shareholders' equity |
$ |
3,308,975 |
|
|
$ |
3,291,480 |
|
|
$ |
3,267,965 |
|
|
$ |
3,276,277 |
|
|
$ |
3,241,642 |
|
Certain reclassifications have been made to
prior periods’ consolidated financial statements to present them on
a basis comparable with the current period’s consolidated financial
statements.
MIDWESTONE FINANCIAL GROUP, INC. AND
SUBSIDIARIESFIVE QUARTER CONSOLIDATED STATEMENTS
OF INCOME
| |
Three Months Ended |
| |
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| |
2019 |
|
2018 (1) |
|
2018 (1) |
|
2018 (1) |
|
2018 (1) |
| |
|
| |
(In thousands, except per share
data) |
| Interest
income |
|
|
|
|
|
|
|
|
|
| Loans, including
fees |
$ |
29,035 |
|
|
$ |
29,052 |
|
|
$ |
28,088 |
|
|
$ |
27,486 |
|
|
$ |
26,567 |
|
| Taxable
investment securities |
2,927 |
|
|
2,774 |
|
|
2,715 |
|
|
2,790 |
|
|
2,748 |
|
|
Tax-exempt investment securities |
1,406 |
|
|
1,375 |
|
|
1,395 |
|
|
1,528 |
|
|
1,529 |
|
|
Other |
20 |
|
|
23 |
|
|
12 |
|
|
18 |
|
|
9 |
|
| Total
interest income |
33,388 |
|
|
33,224 |
|
|
32,210 |
|
|
31,822 |
|
|
30,853 |
|
| Interest
expense |
|
|
|
|
|
|
|
|
|
|
Deposits |
5,695 |
|
|
5,161 |
|
|
4,625 |
|
|
4,009 |
|
|
3,536 |
|
|
Short-term borrowings |
457 |
|
|
374 |
|
|
321 |
|
|
359 |
|
|
261 |
|
| Long-term
debt |
1,260 |
|
|
1,136 |
|
|
1,153 |
|
|
1,024 |
|
|
882 |
|
| Total
interest expense |
7,412 |
|
|
6,671 |
|
|
6,099 |
|
|
5,392 |
|
|
4,679 |
|
| Net
interest income |
25,976 |
|
|
26,553 |
|
|
26,111 |
|
|
26,430 |
|
|
26,174 |
|
| Provision for
loan losses |
1,594 |
|
|
3,250 |
|
|
950 |
|
|
1,250 |
|
|
1,850 |
|
| Net
interest income after provision for loan losses |
24,382 |
|
|
23,303 |
|
|
25,161 |
|
|
25,180 |
|
|
24,324 |
|
| Noninterest
income |
|
|
|
|
|
|
|
|
|
|
Investment services and trust activities |
1,390 |
|
|
1,274 |
|
|
1,222 |
|
|
1,218 |
|
|
1,239 |
|
| Service
charges and fees |
1,442 |
|
|
1,556 |
|
|
1,512 |
|
|
1,518 |
|
|
1,571 |
|
| Card
revenue |
998 |
|
|
1,095 |
|
|
1,069 |
|
|
1,093 |
|
|
966 |
|
| Loan
revenue |
393 |
|
|
884 |
|
|
891 |
|
|
906 |
|
|
941 |
|
|
Bank-owned life insurance |
392 |
|
|
381 |
|
|
399 |
|
|
397 |
|
|
433 |
|
| Insurance
commissions |
420 |
|
|
260 |
|
|
304 |
|
|
319 |
|
|
401 |
|
|
Investment securities gains (losses), net |
17 |
|
|
(4 |
) |
|
192 |
|
|
(4 |
) |
|
9 |
|
|
Other |
358 |
|
|
350 |
|
|
456 |
|
|
246 |
|
|
121 |
|
| Total
noninterest income |
5,410 |
|
|
5,796 |
|
|
6,045 |
|
|
5,693 |
|
|
5,681 |
|
| Noninterest
expense |
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
12,579 |
|
|
12,111 |
|
|
13,051 |
|
|
12,225 |
|
|
12,371 |
|
| Occupancy
expense of premises, net |
1,879 |
|
|
1,166 |
|
|
2,643 |
|
|
1,882 |
|
|
1,906 |
|
|
Equipment |
1,371 |
|
|
1,433 |
|
|
1,341 |
|
|
1,408 |
|
|
1,383 |
|
| Legal and
professional |
965 |
|
|
1,027 |
|
|
1,861 |
|
|
959 |
|
|
794 |
|
| Data
processing |
845 |
|
|
875 |
|
|
697 |
|
|
691 |
|
|
688 |
|
|
Marketing |
606 |
|
|
678 |
|
|
672 |
|
|
690 |
|
|
620 |
|
|
Amortization of intangibles |
452 |
|
|
503 |
|
|
547 |
|
|
589 |
|
|
657 |
|
| FDIC
insurance |
370 |
|
|
429 |
|
|
393 |
|
|
392 |
|
|
319 |
|
|
Communications |
342 |
|
|
342 |
|
|
341 |
|
|
341 |
|
|
329 |
|
|
Foreclosed assets, net |
58 |
|
|
46 |
|
|
(131 |
) |
|
145 |
|
|
(39 |
) |
|
Other |
1,150 |
|
|
1,169 |
|
|
1,207 |
|
|
1,264 |
|
|
1,200 |
|
| Total
noninterest expense |
20,617 |
|
|
19,779 |
|
|
22,622 |
|
|
20,586 |
|
|
20,228 |
|
| Income
before income tax expense |
9,175 |
|
|
9,320 |
|
|
8,584 |
|
|
10,287 |
|
|
9,777 |
|
| Income tax expense |
1,890 |
|
|
1,696 |
|
|
1,806 |
|
|
2,131 |
|
|
1,984 |
|
|
Net income |
$ |
7,285 |
|
|
$ |
7,624 |
|
|
$ |
6,778 |
|
|
$ |
8,156 |
|
|
$ |
7,793 |
|
| Earnings per
common share |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.60 |
|
|
$ |
0.62 |
|
|
$ |
0.55 |
|
|
$ |
0.67 |
|
|
$ |
0.64 |
|
|
Diluted |
$ |
0.60 |
|
|
$ |
0.62 |
|
|
$ |
0.55 |
|
|
$ |
0.67 |
|
|
$ |
0.64 |
|
| Weighted average basic
common shares outstanding |
12,164 |
|
|
12,217 |
|
|
12,221 |
|
|
12,218 |
|
|
12,223 |
|
| Weighted average
diluted common shares outstanding |
12,177 |
|
|
12,235 |
|
|
12,240 |
|
|
12,230 |
|
|
12,242 |
|
| Dividends paid per
common share |
$ |
0.2025 |
|
|
$ |
0.195 |
|
|
$ |
0.195 |
|
|
$ |
0.195 |
|
|
$ |
0.195 |
|
(1) Reclassified to conform to the current
period’s presentation.
MIDWESTONE FINANCIAL GROUP, INC. AND
SUBSIDIARIESAVERAGE BALANCE SHEET AND YIELD
ANALYSIS
| |
Three Months Ended |
| |
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
| |
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
|
Average Balance |
|
Interest Income/ Expense |
|
AverageYield/Cost |
|
AverageBalance |
|
InterestIncome/Expense |
|
AverageYield/Cost |
| |
|
| |
(Dollars in thousands) |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans, including fees
(1)(2) |
$ |
2,409,641 |
|
|
$ |
29,308 |
|
|
4.93 |
% |
|
$ |
2,398,859 |
|
|
$ |
29,330 |
|
|
4.85 |
% |
|
$ |
2,304,984 |
|
|
$ |
26,808 |
|
|
4.72 |
% |
| Taxable
investment securities |
414,986 |
|
|
2,927 |
|
|
2.86 |
% |
|
404,733 |
|
|
2,774 |
|
|
2.72 |
% |
|
423,991 |
|
|
2,748 |
|
|
2.63 |
% |
|
Tax-exempt investment securities (3) |
202,027 |
|
|
1,772 |
|
|
3.56 |
% |
|
198,073 |
|
|
1,732 |
|
|
3.47 |
% |
|
216,590 |
|
|
1,930 |
|
|
3.61 |
% |
|
Other |
3,053 |
|
|
20 |
|
|
2.66 |
% |
|
4,243 |
|
|
23 |
|
|
2.15 |
% |
|
2,421 |
|
|
9 |
|
|
1.51 |
% |
| Total
interest earning assets |
$ |
3,029,707 |
|
|
34,027 |
|
|
4.55 |
% |
|
$ |
3,005,908 |
|
|
33,859 |
|
|
4.47 |
% |
|
$ |
2,947,986 |
|
|
31,495 |
|
|
4.33 |
% |
| Other
assets |
271,390 |
|
|
|
|
|
|
272,218 |
|
|
|
|
|
|
268,032 |
|
|
|
|
|
| Total
assets |
$ |
3,301,097 |
|
|
|
|
|
|
$ |
3,278,126 |
|
|
|
|
|
|
$ |
3,216,018 |
|
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
checking deposits |
$ |
676,654 |
|
|
$ |
910 |
|
|
0.55 |
% |
|
$ |
680,971 |
|
|
$ |
899 |
|
|
0.52 |
% |
|
$ |
668,626 |
|
|
$ |
592 |
|
|
0.36 |
% |
| Money
market deposits |
599,695 |
|
|
1,334 |
|
|
0.90 |
% |
|
556,522 |
|
|
1,034 |
|
|
0.74 |
% |
|
528,484 |
|
|
493 |
|
|
0.38 |
% |
| Savings
deposits |
204,757 |
|
|
58 |
|
|
0.11 |
% |
|
210,106 |
|
|
65 |
|
|
0.12 |
% |
|
216,232 |
|
|
63 |
|
|
0.12 |
% |
| Time
deposits |
724,772 |
|
|
3,393 |
|
|
1.90 |
% |
|
724,973 |
|
|
3,163 |
|
|
1.73 |
% |
|
718,312 |
|
|
2,388 |
|
|
1.35 |
% |
| Total
interest bearing deposits |
2,205,878 |
|
|
5,695 |
|
|
1.05 |
% |
|
2,172,572 |
|
|
5,161 |
|
|
0.94 |
% |
|
2,131,654 |
|
|
3,536 |
|
|
0.67 |
% |
|
Short-term borrowings |
109,929 |
|
|
457 |
|
|
1.69 |
% |
|
104,710 |
|
|
374 |
|
|
1.42 |
% |
|
106,746 |
|
|
261 |
|
|
0.99 |
% |
| Long-term
debt |
179,515 |
|
|
1,260 |
|
|
2.85 |
% |
|
171,029 |
|
|
1,136 |
|
|
2.64 |
% |
|
161,203 |
|
|
882 |
|
|
2.22 |
% |
| Total
borrowed funds |
289,444 |
|
|
1,717 |
|
|
2.41 |
% |
|
275,739 |
|
|
1,510 |
|
|
2.17 |
% |
|
267,949 |
|
|
1,143 |
|
|
1.73 |
% |
| Total
interest bearing liabilities |
$ |
2,495,322 |
|
|
$ |
7,412 |
|
|
1.20 |
% |
|
$ |
2,448,311 |
|
|
$ |
6,671 |
|
|
1.08 |
% |
|
$ |
2,399,603 |
|
|
$ |
4,679 |
|
|
0.79 |
% |
|
Noninterest bearing deposits |
421,753 |
|
|
|
|
|
|
454,185 |
|
|
|
|
|
|
456,883 |
|
|
|
|
|
| Other
liabilities |
24,619 |
|
|
|
|
|
|
24,232 |
|
|
|
|
|
|
18,982 |
|
|
|
|
|
|
Shareholders’ equity |
359,403 |
|
|
|
|
|
|
351,398 |
|
|
|
|
|
|
340,550 |
|
|
|
|
|
| Total
liabilities and shareholders’ equity |
$ |
3,301,097 |
|
|
|
|
|
|
$ |
3,278,126 |
|
|
|
|
|
|
$ |
3,216,018 |
|
|
|
|
|
| Net interest
income(4) |
|
|
$ |
26,615 |
|
|
|
|
|
|
$ |
27,188 |
|
|
|
|
|
|
$ |
26,816 |
|
|
|
| Net interest
spread(4) |
|
|
|
|
3.35 |
% |
|
|
|
|
|
3.39 |
% |
|
|
|
|
|
3.54 |
% |
| Net interest
margin(4) |
|
|
|
|
3.56 |
% |
|
|
|
|
|
3.59 |
% |
|
|
|
|
|
3.69 |
% |
| Total deposits(5) |
$ |
2,627,631 |
|
|
$ |
5,695 |
|
|
0.88 |
% |
|
$ |
2,626,757 |
|
|
$ |
5,161 |
|
|
0.78 |
% |
|
$ |
2,588,537 |
|
|
$ |
3,536 |
|
|
0.55 |
% |
| Funding sources(6) |
$ |
2,917,075 |
|
|
$ |
7,412 |
|
|
1.03 |
% |
|
$ |
2,902,496 |
|
|
$ |
6,671 |
|
|
0.91 |
% |
|
$ |
2,856,486 |
|
|
$ |
4,679 |
|
|
0.66 |
% |
(1) Non-accrual loans have been included
in average loans, net of unearned income. Amortized net deferred
loans and net unearned discounts on acquired loans were included in
the interest income calculations. The amortization of net deferred
loans fees was $(150) thousand, $(67) thousand, and $(132) thousand
for the three months ended March 31, 2019, December 31,
2018, and March 31, 2018, respectively. Accretion of unearned
purchase discounts was $586 thousand, $454 thousand, and $878
thousand for the three months ended March 31, 2019,
December 31, 2018, and March 31, 2018, respectively.
(2) Includes tax-equivalent adjustments of $273
thousand, $278 thousand, and $241 thousand for the three months
ended March 31, 2019, December 31, 2018, and
March 31, 2018, respectively. The federal statutory tax
rate utilized was 21%.
(3) Includes tax-equivalent adjustments of $366
thousand, $357 thousand, and $401 thousand for the three months
ended March 31, 2019, December 31, 2018, and
March 31, 2018, respectively. The federal statutory tax
rate utilized was 21%.
(4) Tax equivalent.
(5) Total deposits is the sum of total
interest-bearing deposits and noninterest-bearing demand deposits.
The cost of total deposits is calculated as annualized interest
expense on deposits divided by average total deposits.
(6) Funding sources is the sum of total
interest-bearing liabilities and noninterest-bearing demand
deposits. The cost of funding sources is calculated as annualized
total interest expense divided by average funding sources.
Non-GAAP Presentations:
Certain non-GAAP ratios and amounts are provided
to evaluate and measure the Company’s operating performance and
financial condition, including tangible book value per share, the
tangible equity to tangible assets ratio, return on average
tangible equity, net interest margin, earnings per share exclusive
of merger expenses, and the efficiency ratio. Management believes
this data provides investors with pertinent information regarding
the Company’s profitability, financial condition and capital
adequacy and how management evaluates such metrics
internally. The following tables provide a reconciliation of
each non-GAAP measure to the most comparable GAAP equivalent.
| |
|
As of |
|
As of |
|
As of |
|
As of |
|
As of |
| |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
| (unaudited,
dollars in thousands, except per share data) |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
Tangible Equity |
|
|
|
|
|
|
|
|
|
|
| Total shareholders’
equity |
|
$ |
363,849 |
|
|
$ |
357,067 |
|
|
$ |
349,189 |
|
|
$ |
346,201 |
|
|
$ |
341,377 |
|
| Plus:
Deferred tax liability associated with intangibles |
|
546 |
|
|
660 |
|
|
786 |
|
|
924 |
|
|
1,073 |
|
| Less:
Intangible assets, net |
|
(74,077 |
) |
|
(74,529 |
) |
|
(75,032 |
) |
|
(75,579 |
) |
|
(76,043 |
) |
| Tangible
equity |
|
$ |
290,318 |
|
|
$ |
283,198 |
|
|
$ |
274,943 |
|
|
$ |
271,546 |
|
|
$ |
266,407 |
|
|
Tangible Assets |
|
|
|
|
|
|
|
|
|
|
| Total
assets |
|
$ |
3,308,975 |
|
|
$ |
3,291,480 |
|
|
$ |
3,267,965 |
|
|
$ |
3,276,277 |
|
|
$ |
3,241,642 |
|
| Plus:
Deferred tax liability associated with intangibles |
|
546 |
|
|
660 |
|
|
786 |
|
|
924 |
|
|
1,073 |
|
| Less:
Intangible assets, net |
|
(74,077 |
) |
|
(74,529 |
) |
|
(75,032 |
) |
|
(75,579 |
) |
|
(76,043 |
) |
| Tangible
assets |
|
$ |
3,235,444 |
|
|
$ |
3,217,611 |
|
|
$ |
3,193,719 |
|
|
$ |
3,201,622 |
|
|
$ |
3,166,672 |
|
| Common
shares outstanding |
|
12,153,045 |
|
|
12,180,015 |
|
|
12,221,107 |
|
|
12,221,107 |
|
|
12,214,942 |
|
|
Tangible Book Value Per Share |
|
$ |
23.89 |
|
|
$ |
23.25 |
|
|
$ |
22.50 |
|
|
$ |
22.22 |
|
|
$ |
21.81 |
|
| Tangible Equity/Tangible Assets |
|
8.97 |
% |
|
8.80 |
% |
|
8.61 |
% |
|
8.48 |
% |
|
8.41 |
% |
| |
|
For the Three Months Ended |
| (unaudited,
dollars in thousands) |
|
March 31,2019 |
|
December 31,2018 |
|
March 31,2018 |
| Net
Income |
|
$ |
7,285 |
|
|
$ |
7,624 |
|
|
$ |
7,793 |
|
| Plus:
Intangible amortization, net of tax(1) |
|
357 |
|
|
397 |
|
|
519 |
|
| Adjusted net income |
|
$ |
7,642 |
|
|
$ |
8,021 |
|
|
$ |
8,312 |
|
|
Average Tangible Equity |
|
|
|
|
|
|
| Average
total shareholders’ equity |
|
$ |
359,403 |
|
|
$ |
351,398 |
|
|
$ |
340,550 |
|
| Plus:
Average deferred tax liability associated with intangibles |
|
601 |
|
|
720 |
|
|
1,154 |
|
| Less:
Average intangible assets, net of amortization |
|
(74,293 |
) |
|
(74,766 |
) |
|
(76,364 |
) |
| Average tangible equity |
|
$ |
285,711 |
|
|
$ |
277,352 |
|
|
$ |
265,340 |
|
| Return on Average Tangible Equity
(annualized) |
|
10.85 |
% |
|
11.47 |
% |
|
12.70 |
% |
| Net Interest
Margin Tax Equivalent Adjustment |
|
|
|
|
|
|
| Net interest income |
|
$ |
25,976 |
|
|
$ |
26,553 |
|
|
$ |
26,174 |
|
| Plus tax equivalent
adjustment:(1) |
|
|
|
|
|
|
|
Loans |
|
273 |
|
|
278 |
|
|
241 |
|
|
Securities |
|
366 |
|
|
357 |
|
|
401 |
|
| Tax equivalent net interest income (1) |
|
$ |
26,615 |
|
|
$ |
27,188 |
|
|
$ |
26,816 |
|
| Average interest
earning assets |
|
$ |
3,029,707 |
|
|
$ |
3,005,908 |
|
|
$ |
2,947,986 |
|
|
Net Interest Margin |
|
3.56 |
% |
|
3.59 |
% |
|
3.69 |
% |
| Yield on
Average Loans |
|
|
|
|
|
|
| Interest income on
loans, including fees |
|
$ |
29,035 |
|
|
$ |
29,052 |
|
|
$ |
26,567 |
|
| Plus tax equivalent
adjustment:(1) |
|
|
|
|
|
|
|
Loans |
|
273 |
|
|
278 |
|
|
241 |
|
| Tax equivalent loan interest income (1) |
|
$ |
29,308 |
|
|
$ |
29,330 |
|
|
$ |
26,808 |
|
| Average loans |
|
$ |
2,409,641 |
|
|
$ |
2,398,859 |
|
|
$ |
2,304,984 |
|
| Average Yield
on Loans |
|
4.93 |
% |
|
4.85 |
% |
|
4.72 |
% |
| (1) Computed on a tax-equivalent basis, assuming a
federal income tax rate of 21%. |
| |
|
For the Three Months Ended |
| (unaudited,
dollars in thousands, except per share amounts) |
|
March 31,2019 |
|
December 31,2018 |
|
March 31,2018 |
| Net
Income |
|
$ |
7,285 |
|
|
$ |
7,624 |
|
|
$ |
7,793 |
|
| Plus:
Merger-related expenses |
|
167 |
|
|
206 |
|
|
— |
|
| Net tax
effect of above item(1) |
|
(11 |
) |
|
(32 |
) |
|
— |
|
| Net income
exclusive of merger-related expenses |
|
$ |
7,441 |
|
|
$ |
7,798 |
|
|
$ |
7,793 |
|
| Average
number of diluted shares |
|
12,176,757 |
|
|
12,234,687 |
|
|
12,241,714 |
|
| |
|
|
|
|
|
|
|
Earnings per common share - diluted |
|
$ |
0.60 |
|
|
$ |
0.62 |
|
|
$ |
0.64 |
|
|
Earnings per common share - diluted, exclusive of
merger-related expenses |
|
$ |
0.61 |
|
|
$ |
0.64 |
|
|
$ |
0.64 |
|
| |
|
For the Three Months Ended |
| (dollars in
thousands) |
|
March 31,2019 |
|
December 31,2018 |
|
March 31,2018 |
|
Operating Expense |
|
|
|
|
|
|
| Total noninterest
expense |
|
$ |
20,617 |
|
|
$ |
19,779 |
|
|
$ |
20,228 |
|
| Less:
Amortization of intangibles |
|
(452 |
) |
|
(503 |
) |
|
(657 |
) |
| Operating expense |
|
$ |
20,165 |
|
|
$ |
19,276 |
|
|
$ |
19,571 |
|
|
Operating Revenue |
|
|
|
|
|
|
| Tax
equivalent net interest income (2) |
|
$ |
26,615 |
|
|
$ |
27,188 |
|
|
$ |
26,816 |
|
| Plus:
Noninterest income |
|
5,410 |
|
|
5,796 |
|
|
5,681 |
|
| Impairment losses on investment securities |
|
— |
|
|
— |
|
|
— |
|
| Less:
(Gain) loss on sale or call of debt securities |
|
(17 |
) |
|
4 |
|
|
(9 |
) |
| Operating revenue |
|
$ |
32,008 |
|
|
$ |
32,988 |
|
|
$ |
32,488 |
|
|
Efficiency Ratio |
|
63.00 |
% |
|
58.43 |
% |
|
60.24 |
% |
| (1)
Computed assuming a combined marginal income tax rate of 25% on
deductible items. |
| (2)
Computed on a tax-equivalent basis, assuming a federal income tax
rate of 21%. |
|
Contact: |
|
|
| |
Charles N. Funk |
|
Barry S. Ray |
| |
President and Chief
Executive Officer |
|
Senior Vice President
and Chief Financial Officer |
| |
319.356.5800 |
|
319.356.5800 |
MidWestOne Financial (NASDAQ:MOFG)
Historical Stock Chart
From Apr 2024 to May 2024
MidWestOne Financial (NASDAQ:MOFG)
Historical Stock Chart
From May 2023 to May 2024
