Fourth Quarter Summary(1)
- Net income for the fourth quarter was $16.7 million, or $1.04 per diluted common share.
-- Revenue, net of interest expense, increased $2.3 million, or 5%, to $49.7 million.
-- Credit loss expense decreased $8.0 million, or 161%, from improved economic forecasts.
-- Noninterest expense decreased $28.0 million, or 47%, to $31.9 million due to the $31.5 million goodwill impairment charge recorded in the third quarter of 2020 (the “linked quarter”). - Net charge-off ratio was 4 basis points ("bps"), a decline of 16 bps from the linked quarter.
- COVID-19 loan modifications declined to $44.1 million, which represented 1.3% of loans held for investment, net of unearned income.
- Average deposits increased $172.9 million, or 17% annualized, while cost of total deposits declined 11 bps to 38 bps.
Full Year 2020 Summary(1)
- Net income for the full year was $6.6 million, or $0.41 per diluted common share.
- Core earnings(2) were $38.1 million, a decline of $5.5 million, or 13%, due primarily to pandemic-related credit loss expenses recognized in 2020.
- Net charge-off ratio improved 8 bps to 15 bps.
- Book value and tangible book value per share(2) grew 2% and 12%, respectively.
IOWA CITY, Iowa, Jan. 28, 2021 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported net income for the fourth quarter of 2020 of $16.7 million, or $1.04 per diluted common share, compared to net loss of $19.8 million, or a loss of $1.23 per diluted common share, for the linked quarter. Net income for the full year of 2020 was $6.6 million, or $0.41 per diluted common share, compared to net income for the full year of 2019 of $43.6 million, or $2.93 per diluted common share.
Charles Funk, Chief Executive Officer of the Company, commented, "This was an excellent quarter for MidWestOne. Earnings were strong at $1.04 per diluted common share and a 1.22% return on average assets, 13.15% return on average equity, and 17.07% return on average tangible equity(2). Among the most positive elements of the quarter was a nice increase in noninterest income driven by our residential mortgage and wealth management operations. We also benefited from credit loss expense recapture, which was driven by stability in loan credit quality and improved economic forecasts. Finally, in a tough operating environment, we achieved core commercial loan(2) growth in the fourth quarter of 6% annualized."
1Fourth Quarter Summary compares to the linked quarter unless noted. Full Year 2020 Summary compares to the full year 2019 unless noted.
2Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
| FINANCIAL HIGHLIGHTS | Three Months Ended | Year Ended | |||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||||
| (Dollars in thousands, except per share amounts) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
| Net interest income | $ | 39,037 | $ | 37,809 | $ | 39,584 | $ | 152,964 | $ | 143,650 | |||||||||||||
| Noninterest income | 10,626 | 9,570 | 9,036 | 38,620 | 31,246 | ||||||||||||||||||
| Total revenue, net of interest expense | 49,663 | 47,379 | 48,620 | 191,584 | 174,896 | ||||||||||||||||||
| Credit loss (benefit) expense | (3,041 | ) | 4,992 | 604 | 28,369 | 7,158 | |||||||||||||||||
| Noninterest expense | 31,915 | 59,939 | 36,436 | 149,893 | 117,535 | ||||||||||||||||||
| Income (loss) before income tax expense (benefit) | 20,789 | (17,552 | ) | 11,580 | 13,322 | 50,203 | |||||||||||||||||
| Income tax expense (benefit) | 4,079 | 2,272 | (1,791 | ) | 6,699 | 6,573 | |||||||||||||||||
| Net income (loss) | $ | 16,710 | $ | (19,824 | ) | $ | 13,371 | $ | 6,623 | $ | 43,630 | ||||||||||||
| Diluted earnings (loss) per share | $ | 1.04 | $ | (1.23 | ) | $ | 0.83 | $ | 0.41 | $ | 2.93 | ||||||||||||
| Return on average assets | 1.22 | % | (1.48 | ) | % | 1.14 | % | 0.13 | % | 1.04 | % | ||||||||||||
| Return on average equity | 13.15 | % | (14.88 | ) | % | 10.55 | % | 1.28 | % | 9.65 | % | ||||||||||||
| Return on average tangible equity(1) | 17.07 | % | 12.56 | % | 15.60 | % | 10.80 | % | 13.98 | % | |||||||||||||
| Efficiency ratio(1) | 59.69 | % | 55.37 | % | 63.05 | % | 56.92 | % | 57.56 | % | |||||||||||||
| (1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. | |||||||||||||||||||||||
COVID-19 UPDATE
Loan Modifications
As of December 31, 2020, loans modified as a result of the COVID-19 pandemic totaled $44.1 million, a decline of 62% from $116.0 million at September 30, 2020. Of those modified loans at December 31, 2020, $24.6 million are in their first deferral period while $19.5 million are in or being processed for an additional deferral.
Small Business Administration ("SBA") Paycheck Protection Program ("PPP") Loans
On December 27, 2020, a new COVID-19 relief bill was signed into law by President Trump, which includes as part of the bill up to $284.5 billion of a second wave of PPP funding. On January 8, 2021, the SBA issued guidance that amended the threshold for loans that qualify for the simplified forgiveness application from $50,000 or less to $150,000 or less.
During the first wave of the PPP, the Company funded 2,681 loans totaling $348.5 million. As of December 31, 2020, 2,410 loans totaling $259.3 million, including $5.3 million of unamortized net fees, were outstanding. Of those remaining loans, 2,189 loans totaling $72.9 million, including unamortized net fees of $1.7 million, qualified for the simplified forgiveness application described above.
Mr. Funk stated, "The Company remains committed to supporting our customers and communities, and we intend to participate in this next wave of the PPP. We expect the volume of second wave funding will be lower than the first round."
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased to $39.0 million in the fourth quarter of 2020 from $37.8 million in the third quarter of 2020 due mainly to accelerated PPP loan fee accretion stemming from loan forgiveness, higher volume of average interest earning assets, and a stable net interest margin. Net PPP loan fee accretion was $3.1 million in the fourth quarter of 2020 compared to $1.3 million in the linked quarter. Loan purchase discount accretion was $1.5 million in the fourth quarter of 2020, down from $1.9 million in the linked quarter. Average interest earning assets increased $182.5 million to $5.1 billion in the fourth quarter of 2020, compared to the third quarter of 2020, as net loan pay-downs and deposit inflows were re-invested into debt securities.
The Company's tax equivalent net interest margin was 3.13% in the fourth quarter of 2020 compared to 3.14% in the linked quarter as lower average funding costs were more than offset by lower average earning asset yields. The cost of interest bearing liabilities decreased 12 bps to 0.64%, primarily as a result of interest bearing deposit costs of 0.47%, which declined 15 bps from the linked quarter. Total earning asset yields decreased 10 bps from the linked quarter, reflecting the origination and re-pricing of loans at, generally, lower coupon rates compared to existing portfolio coupon rates as well as a shift in earning asset mix to a greater proportion of investment securities, which generally have lower yields than loans.
"The transitory benefit to our net interest margin from PPP loan forgiveness will continue over the next few quarters. The margin was negatively impacted in the fourth quarter by a reversal of $0.4 million of interest income from a loan relationship placed on nonaccrual. The low interest rate environment continues to challenge our margin management," stated Mr. Funk.
Noninterest Income
Noninterest income for the fourth quarter of 2020 increased $1.1 million, or 11%, from the linked quarter. The increase was due primarily to a $0.6 million increase in loan revenue, an increase in 'Other' noninterest income of $0.3 million, and an increase of $0.2 million in investment services and trust activities revenue. The increase in loan revenue reflected robust production from the Company's residential mortgage business as low interest rates continued to drive new purchase and refinance volumes.
Mr. Funk noted, "Both our home mortgage center and investment services group had record years in 2020. Our trust department also contributed despite being challenged by additional delays in the Iowa court system due to the pandemic. We are very positive about the future direction of these three areas of our Company. During the quarter, we added two wealth management professionals to our trust department serving the Twin Cities metro. We believe this will enhance wealth management revenue in 2021 and beyond."
The following table presents details of noninterest income for the periods indicated:
| Three Months Ended | |||||||||||
| Noninterest Income | December 31, | September 30, | December 31, | ||||||||
| (In thousands) | 2020 | 2020 | 2019 | ||||||||
| Investment services and trust activities | $ | 2,518 | $ | 2,361 | $ | 2,421 | |||||
| Service charges and fees | 1,571 | 1,491 | 2,072 | ||||||||
| Card revenue | 1,517 | 1,600 | 1,142 | ||||||||
| Loan revenue | 3,900 | 3,252 | 1,757 | ||||||||
| Bank-owned life insurance | 541 | 530 | 501 | ||||||||
| Investment securities gains, net | 30 | 106 | 18 | ||||||||
| Other | 549 | 230 | 1,125 | ||||||||
| Total noninterest income | $ | 10,626 | $ | 9,570 | $ | 9,036 | |||||
Noninterest Expense
Noninterest expense for the fourth quarter of 2020 decreased $28.0 million, or 46.8%, from the linked quarter due primarily to a $31.5 million goodwill impairment charge that was recorded in the linked quarter. Excluding the goodwill impairment charge, noninterest expense increased $3.5 million, due primarily to increases in compensation and employee benefits of $1.2 million, $0.9 million in legal and professional expenses and $0.9 million in 'Other' noninterest expense. The increase in compensation and employee benefits was due mainly to an increase of $1.0 million related to incentive compensation expense and commissions. The increase in legal and professional expenses was primarily driven by $0.6 million of consulting fees incurred as part of a large contract renewal where the consultant earned a fee based on life-of-contract savings. The increase in 'Other' noninterest expense was primarily attributable to a $0.8 million loss from the termination of our cash flow hedge in the fourth quarter of 2020. The increased noninterest expenses noted above were the primary drivers in the increase in the efficiency ratio, which increased 4.32% to 59.69%, as compared to the linked quarter efficiency ratio of 55.37%.
The following table presents details of noninterest expense for the periods indicated:
| Three Months Ended | ||||||||||||
| Noninterest Expense | December 31, | September 30, | December 31, | |||||||||
| (In thousands) | 2020 | 2020 | 2019 | |||||||||
| Compensation and employee benefits | $ | 17,638 | $ | 16,460 | $ | 19,246 | ||||||
| Occupancy expense of premises, net | 2,476 | 2,278 | 2,347 | |||||||||
| Equipment | 2,040 | 1,935 | 2,251 | |||||||||
| Legal and professional | 2,052 | 1,184 | 1,797 | |||||||||
| Data processing | 1,460 | 1,308 | 1,492 | |||||||||
| Marketing | 986 | 857 | 1,147 | |||||||||
| Amortization of intangibles | 1,569 | 1,631 | 1,941 | |||||||||
| FDIC insurance | 495 | 470 | (72 | ) | ||||||||
| Communications | 412 | 428 | 493 | |||||||||
| Foreclosed assets, net | (35 | ) | 13 | 173 | ||||||||
| Other | 2,822 | 1,875 | 5,621 | |||||||||
| Total core noninterest expense | $ | 31,915 | $ | 28,439 | $ | 36,436 | ||||||
| Goodwill impairment | $ | — | $ | 31,500 | $ | — | ||||||
| Total noninterest expense | $ | 31,915 | $ | 59,939 | $ | 36,436 | ||||||
The Company incurred no merger-related costs in either the fourth quarter of 2020 or in the linked quarter, whereas a total amount of $3.3 million of merger-related costs were incurred in the fourth quarter of 2019.
Income Taxes
The effective income tax rate was 19.6% in the fourth quarter of 2020 compared to (12.9)% in the linked quarter. Excluding non-deductible goodwill impairment, the effective income tax rate in the linked quarter was 16.3%. The effective income tax rate in the fourth quarter of 2020 reflected an increase in income taxes based on the statutory rate and state income taxes, net of federal income tax benefits primarily due to the net income earned during the quarter, offset by benefits related to tax-exempt interest and renewable energy tax credits.The effective tax rate for the year ended December 31, 2020 was 50.3%. Excluding the impact of the non-deductible goodwill impairment, the effective income tax rate was 14.9%. The effective income tax rate for the full year 2021 is expected to be in the range of 19-21%.
| BALANCE SHEET, LIQUIDITY AND CAPITAL HIGHLIGHTS | As of or For the Three Months Ended | ||||||||||
| December 31, | September 30, | December 31, | |||||||||
| (Dollars in millions, except per share amounts) | 2020 | 2020 | 2019 | ||||||||
| Ending Balance Sheet | |||||||||||
| Total assets | $ | 5,556.6 | $ | 5,330.7 | $ | 4,653.6 | |||||
| Loans held for investment, net of unearned income | 3,482.2 | 3,537.4 | 3,451.3 | ||||||||
| Total securities held for investment | 1,657.4 | 1,366.3 | 786.0 | ||||||||
| Total deposits | 4,547.0 | 4,333.6 | 3,728.7 | ||||||||
| Average Balance Sheet | |||||||||||
| Average total assets | $ | 5,457.9 | $ | 5,311.4 | $ | 4,634.6 | |||||
| Average total loans | 3,560.6 | 3,576.6 | 3,493.5 | ||||||||
| Average total deposits | 4,490.0 | 4,317.2 | 3,723.9 | ||||||||
| Funding and Liquidity | |||||||||||
| Short-term borrowings | $ | 230.8 | $ | 183.9 | $ | 139.3 | |||||
| Long-term debt | 208.7 | 245.5 | 231.7 | ||||||||
| Loans to deposits ratio | 76.58 | % | 81.63 | % | 92.56 | % | |||||
| Equity | |||||||||||
| Total shareholders' equity | $ | 515.3 | $ | 499.1 | $ | 509.0 | |||||
| Equity to assets ratio | 9.27 | % | 9.36 | % | 10.94 | % | |||||
| Tangible common equity(1) | 427.5 | 409.8 | 384.8 | ||||||||
| Tangible common equity ratio(1) | 7.82 | % | 7.82 | % | 8.50 | % | |||||
| Per Share Data | |||||||||||
| Book value | $ | 32.17 | $ | 31.00 | $ | 31.49 | |||||
| Tangible book value(1) | $ | 26.69 | $ | 25.45 | $ | 23.81 | |||||
| (1) Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. | |||||||||||
Loans Held for Investment
Loans held for investment, net of unearned income, decreased $55.2 million, or 2%, to $3.48 billion from September 30, 2020, driven primarily by PPP loan forgiveness and pay downs totaling $79.0 million and lower line utilization.
The following table presents the composition of loans held for investment, net of unearned income, as of the dates indicated:
| Loans Held for Investment | December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||
| (dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||||||||
| Commercial and industrial | $ | 1,055,488 | 30.3 | % | $ | 1,103,102 | 31.2 | % | $ | 835,236 | 24.2 | % | |||||||||
| Agricultural | 116,392 | 3.3 | 129,453 | 3.7 | 140,446 | 4.1 | |||||||||||||||
| Commercial real estate | |||||||||||||||||||||
| Construction and development | 181,291 | 5.2 | 191,423 | 5.4 | 298,077 | 8.6 | |||||||||||||||
| Farmland | 144,970 | 4.2 | 152,362 | 4.2 | 181,885 | 5.3 | |||||||||||||||
| Multifamily | 256,525 | 7.4 | 235,241 | 6.7 | 227,407 | 6.6 | |||||||||||||||
| Other | 1,149,575 | 33.0 | 1,128,009 | 31.9 | 1,107,490 | 32.1 | |||||||||||||||
| Total commercial real estate | 1,732,361 | 49.8 | 1,707,035 | 48.2 | 1,814,859 | 52.6 | |||||||||||||||
| Residential real estate | |||||||||||||||||||||
| One-to-four family first liens | 355,684 | 10.2 | 371,390 | 10.5 | 407,418 | 11.8 | |||||||||||||||
| One-to-four family junior liens | 143,422 | 4.1 | 150,180 | 4.2 | 170,381 | 4.9 | |||||||||||||||
| Total residential real estate | 499,106 | 14.3 | 521,570 | 14.7 | 577,799 | 16.7 | |||||||||||||||
| Consumer | 78,876 | 2.3 | 76,272 | 2.2 | 82,926 | 2.4 | |||||||||||||||
| Loans held for investment, net of unearned income | $ | 3,482,223 | 100.0 | % | $ | 3,537,432 | 100.0 | % | $ | 3,451,266 | 100.0 | % | |||||||||
Credit Loss Expense & Allowance for Credit Losses
The following table shows the activity in the allowance for credit losses for the periods indicated:
| Three Months Ended | Year Ended | ||||||||||||||||||
| Allowance for Credit Losses Roll Forward | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||
| (In thousands) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Beginning balance | $ | 58,500 | $ | 55,644 | $ | 31,532 | $ | 29,079 | $ | 29,307 | |||||||||
| Cumulative effect of change in accounting principle - CECL | — | — | — | 3,984 | — | ||||||||||||||
| Charge-offs | (1,005 | ) | (2,188 | ) | (3,212 | ) | (6,793 | ) | (8,390 | ) | |||||||||
| Recoveries | 646 | 347 | 155 | 1,528 | 1,004 | ||||||||||||||
| Net charge-offs | (359 | ) | (1,841 | ) | (3,057 | ) | (5,265 | ) | (7,386 | ) | |||||||||
| Credit loss (benefit) expense related to loans | (2,641 | ) | 4,697 | 604 | 27,702 | 7,158 | |||||||||||||
| Ending balance | $ | 55,500 | $ | 58,500 | $ | 29,079 | $ | 55,500 | $ | 29,079 | |||||||||
Effective January 1, 2020, the Company adopted the Financial Instruments - Credit Losses (CECL) accounting guidance. The adoption of this guidance established a single allowance framework for all financial assets carried at amortized cost and certain off-balance sheet credit exposures. The framework requires that management's estimate reflects credit losses over the full remaining expected life of each credit and considers expected future changes in macroeconomic conditions. The adoption resulted in the recognition on January 1, 2020 of cumulative effect adjustments of $4.0 million related to the allowance for credit losses (ACL) and $3.4 million related to the liability for off-balance sheet credit exposures.
As of December 31, 2020, the ACL was $55.5 million, or 1.59% of loans held for investment, net of unearned income, compared with $58.5 million, or 1.65%, at September 30, 2020. After excluding $259.3 million of net PPP loans, the ACL as a percentage of loans held for investment, net of unearned income decreased to 1.72%(1) as of December 31, 2020, from 1.82%(1) at September 30, 2020. The decline in the ACL during the fourth quarter reflected overall improvements in the economic forecast when compared to the linked quarter and the overall stability in the credit quality of our loan portfolio.
Mr. Funk noted, "At 1.59%, or 1.72%(1) excluding the impact of PPP, we believe our allowance for credit losses ratios remain strong."
(1)Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
Deposits
The following table presents the composition of our deposit portfolio as of the dates indicated:
| Deposit Composition | December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||
| (In thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||||||||
| Noninterest bearing deposits | $ | 910,655 | 20.0 | % | $ | 864,504 | 19.9 | % | $ | 662,209 | 17.8 | % | |||||||||
| Interest checking deposits | 1,351,641 | 29.7 | 1,230,146 | 28.5 | 962,830 | 25.7 | |||||||||||||||
| Money market deposits | 918,654 | 20.2 | 871,336 | 20.1 | 763,028 | 20.5 | |||||||||||||||
| Savings deposits | 529,751 | 11.7 | 486,876 | 11.2 | 387,142 | 10.4 | |||||||||||||||
| Total non-maturity deposits | 3,710,701 | 81.6 | 3,452,862 | 79.7 | 2,775,209 | 74.4 | |||||||||||||||
| Time deposits of $250,000 and under | 581,471 | 12.8 | 617,229 | 14.2 | 682,232 | 18.3 | |||||||||||||||
| Time deposits over $250,000 | 254,877 | 5.6 | 263,550 | 6.1 | 271,214 | 7.3 | |||||||||||||||
| Total time deposits | 836,348 | 18.4 | 880,779 | 20.3 | 953,446 | 25.6 | |||||||||||||||
| Total deposits | $ | 4,547,049 | 100.0 | % | $ | 4,333,641 | 100.0 | % | $ | 3,728,655 | 100.0 | % | |||||||||
CREDIT RISK PROFILE
| As of or For the Three Months Ended | ||||||||||||
| Highlights | December 31, | September 30, | December 31, | |||||||||
| (dollars in thousands) | 2020 | 2020 | 2019 | |||||||||
| Credit loss (benefit) expense related to loans | $ | (2,641 | ) | $ | 4,697 | $ | 604 | |||||
| Net charge-offs | $ | 359 | $ | 1,841 | $ | 3,057 | ||||||
| Net charge-off ratio(1) | 0.04 | % | 0.20 | % | 0.35 | % | ||||||
| At period-end | ||||||||||||
| Pass | $ | 3,202,704 | $ | 3,230,611 | $ | 3,246,524 | ||||||
| Special Mention / Watch | 157,213 | 176,702 | 121,709 | |||||||||
| Classified | 122,306 | 130,119 | 83,033 | |||||||||
| Total loans held for investment, net | $ | 3,482,223 | $ | 3,537,432 | $ | 3,451,266 | ||||||
| Classified loans ratio(2) | 3.51 | % | 3.68 | % | 2.41 | % | ||||||
| Nonaccrual loans held for investment | $ | 41,950 | $ | 39,071 | $ | 41,483 | ||||||
| Accruing loans contractually past due 90 days or more | 739 | 2,593 | 136 | |||||||||
| Foreclosed assets, net | 2,316 | 724 | 3,706 | |||||||||
| Total nonperforming assets (3) | $ | 45,005 | $ | 42,388 | $ | 45,325 | ||||||
| Nonperforming assets ratio(4) | 1.29 | % | 1.20 | % | 1.31 | % | ||||||
| Allowance for credit losses | 55,500 | 58,500 | 29,079 | |||||||||
| Allowance for credit losses ratio(5) | 1.59 | % | 1.65 | % | 0.84 | % | ||||||
| Adjusted allowance for credit losses ratio(6) | 1.72 | % | 1.82 | % | 0.84 | % | ||||||
| Performing troubled debt restructured loans held for investment | 2,630 | 2,355 | 4,372 | |||||||||
| (1) Net charge-off ratio is calculated as annualized net charge-offs divided by average loans held for investment, net of unearned income 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) Starting in the second quarter of 2020, performing troubled debt restructured loans held for investment are no longer included in nonperforming assets. Prior period credit quality metrics have been adjusted to exclude these loans. | ||||||||||||
| (4) Nonperforming assets ratio is calculated as total nonperforming assets divided by the sum of loans held for investment, net of unearned income and foreclosed assets, net 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) Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. | ||||||||||||
"We were pleased with the relative stability in the credit risk profile of the loan portfolio and have continued to proactively work problem credits to resolution. However, we did place one large $9.5 million hotel loan on nonaccrual at year-end. Conditions in the agricultural economy have brightened considerably with the recent rise in corn and soybean prices combined with government payments combining to make 2020 the best year in many years for our agricultural customers," stated Mr. Funk.
CAPITAL
Effective March 31, 2020, we elected the 5-year phase-in option allowed under the interim final rule (IFR) recently issued by the federal banking regulatory agencies that delays the estimated impact on regulatory capital stemming from the implementation of CECL. The IFR allows the add back of 100% of the capital effect from the day one CECL transition adjustment and 25% of the capital effect from subsequent increases in the allowance for credit losses through the two-year period ending December 31, 2021. This cumulative amount will then be reduced from capital over the subsequent three-year period.
| December 31, | September 30, | December 31, | ||||||
| Regulatory Capital Ratios | 2020 (1) | 2020 | 2019 | |||||
| MidWestOne Financial Group, Inc. Consolidated | ||||||||
| Tier 1 leverage ratio | 8.50 | % | 8.52 | % | 9.48 | % | ||
| Common equity tier 1 capital ratio | 9.72 | % | 9.72 | % | 9.46 | % | ||
| Tier 1 capital ratio | 10.70 | % | 10.73 | % | 10.47 | % | ||
| Total capital ratio | 13.41 | % | 13.56 | % | 11.34 | % | ||
| MidWestOne Bank | ||||||||
| Tier 1 leverage ratio | 9.35 | % | 9.26 | % | 10.06 | % | ||
| Common equity tier 1 capital ratio | 11.79 | % | 11.75 | % | 11.12 | % | ||
| Tier 1 capital ratio | 11.79 | % | 11.75 | % | 11.12 | % | ||
| Total capital ratio | 12.89 | % | 12.95 | % | 11.83 | % | ||
| (1) Capital ratios for December 31, 2020 are preliminary | ||||||||
CORPORATE UPDATE
Share Repurchase Program
In the fourth quarter of 2020, the Company's board of directors authorized resuming repurchases under the Company's share repurchase program. The Company repurchased 84,088 shares of its common stock at an average price of $24.02 per share and a total cost of $2.0 million in the fourth quarter of 2020. At December 31, 2020, $4.4 million remained available to repurchase shares under the Company’s current share repurchase program.
Cash Dividend Announcement
On January 20, 2021, the Company’s board of directors declared a quarterly cash dividend of $0.2250 per common share. The dividend is payable March 15, 2021, to shareholders of record at the close of business on March 1, 2021.
Mr. Funk noted, "The board's confidence in our future operations was ratified with an increase in our quarterly dividend. Importantly, we were able to take advantage of market conditions to buy back our common stock during the quarter at levels we believe were very attractive."
CONFERENCE CALL DETAILS
The Company will host a conference call for investors at 11:00 a.m. CT on Friday, January 29, 2021. 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 April 29, 2021, by calling 877-344-7529 and using the replay access code of 10150413. 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.
EARNINGS CALL PRESENTATION
The Company has prepared presentation materials that management intends to use during its fourth quarter 2020 conference call on January 29, 2021. These materials have been furnished to the U.S. Securities and Exchange Commission in a Form 8-K concurrently with this press release, and are also available on the Company's website at www.midwestonefinancial.com.
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) effects of the COVID-19 pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state, or local government laws, regulations, or orders in connection with the pandemic; (2) government intervention in the U.S. financial system in response to the COVID-19 pandemic, including the effects of recent legislative, tax, accounting and regulatory actions and reforms, including the Coronavirus Aid, Relief, and Economic Security Act and the Consolidated Appropriations Act, 2021; (3) the impact of the COVID-19 pandemic on our financial results, including possible lost revenue and increased expenses (including the cost of capital), as well as possible goodwill impairment charges; (4) 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 credit loss expense, and a reduction in net earnings; (5) the effects of interest rates, including on our net income and the value of our securities portfolio; (6) 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; (7) fluctuations in the value of our investment securities; (8) governmental monetary and fiscal policies; (9) changes in and uncertainty related to benchmark interest rates used to price loans and deposits, including the expected elimination of LIBOR; (10) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators; (11) the ability to attract and retain key executives and employees experienced in banking and financial services; (12) the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio; (13) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (14) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (15) the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds, financial technology companies, and other financial institutions operating in our markets or elsewhere or providing similar services; (16) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (17) the risks of mergers, 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; (18) volatility of rate-sensitive deposits; (19) operational risks, including data processing system failures or fraud; (20) asset/liability matching risks and liquidity risks; (21) the costs, effects and outcomes of existing or future litigation; (22) changes in general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business; (23) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (24) war or terrorist activities, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (25) the effects of cyber-attacks; (26) the imposition of tariffs or other domestic or international governmental policies impacting the value of the agricultural or other products of our borrowers; and (27) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, | September 30, | December 31, | |||||||||
| (In thousands) | 2020 | 2020 | 2019 | ||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 65,078 | $ | 71,901 | $ | 67,174 | |||||
| Interest earning deposits in banks | 17,409 | 55,421 | 6,112 | ||||||||
| Federal funds sold | 172 | 7,540 | 198 | ||||||||
| Total cash and cash equivalents | 82,659 | 134,862 | 73,484 | ||||||||
| Debt securities available for sale at fair value | 1,657,381 | 1,366,344 | 785,977 | ||||||||
| Loans held for sale | 59,956 | 13,096 | 5,400 | ||||||||
| Gross loans held for investment | 3,496,790 | 3,555,969 | 3,469,236 | ||||||||
| Unearned income, net | (14,567 | ) | (18,537 | ) | (17,970 | ) | |||||
| Loans held for investment, net of unearned income | 3,482,223 | 3,537,432 | 3,451,266 | ||||||||
| Allowance for credit losses | (55,500 | ) | (58,500 | ) | (29,079 | ) | |||||
| Total loans held for investment, net | 3,426,723 | 3,478,932 | 3,422,187 | ||||||||
| Premises and equipment, net | 86,401 | 87,955 | 90,723 | ||||||||
| Goodwill | 62,477 | 62,477 | 91,918 | ||||||||
| Other intangible assets, net | 25,242 | 26,811 | 32,218 | ||||||||
| Foreclosed assets, net | 2,316 | 724 | 3,706 | ||||||||
| Other assets | 153,493 | 159,507 | 147,960 | ||||||||
| Total assets | $ | 5,556,648 | $ | 5,330,708 | $ | 4,653,573 | |||||
| LIABILITIES | |||||||||||
| Noninterest bearing deposits | $ | 910,655 | $ | 864,504 | $ | 662,209 | |||||
| Interest bearing deposits | 3,636,394 | 3,469,137 | 3,066,446 | ||||||||
| Total deposits | 4,547,049 | 4,333,641 | 3,728,655 | ||||||||
| Short-term borrowings | 230,789 | 183,893 | 139,349 | ||||||||
| Long-term debt | 208,691 | 245,481 | 231,660 | ||||||||
| Other liabilities | 54,869 | 68,612 | 44,927 | ||||||||
| Total liabilities | 5,041,398 | 4,831,627 | 4,144,591 | ||||||||
| SHAREHOLDERS' EQUITY | |||||||||||
| Common stock | 16,581 | 16,581 | 16,581 | ||||||||
| Additional paid-in capital | 300,137 | 299,939 | 297,390 | ||||||||
| Retained earnings | 188,191 | 175,017 | 201,105 | ||||||||
| Treasury stock | (14,251 | ) | (12,272 | ) | (10,466 | ) | |||||
| Accumulated other comprehensive income | 24,592 | 19,816 | 4,372 | ||||||||
| Total shareholders' equity | 515,250 | 499,081 | 508,982 | ||||||||
| Total liabilities and shareholders' equity | $ | 5,556,648 | $ | 5,330,708 | $ | 4,653,573 | |||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | Year Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | ||||||||||||||||
| (In thousands, except per share data) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Interest income | |||||||||||||||||||
| Loans, including fees | $ | 38,239 | $ | 38,191 | $ | 44,906 | $ | 158,656 | $ | 163,163 | |||||||||
| Taxable investment securities | 4,673 | 4,574 | 3,540 | 17,610 | 13,132 | ||||||||||||||
| Tax-exempt investment securities | 2,529 | 2,360 | 1,465 | 8,259 | 5,696 | ||||||||||||||
| Other | 29 | 29 | 115 | 262 | 450 | ||||||||||||||
| Total interest income | 45,470 | 45,154 | 50,026 | 184,787 | 182,441 | ||||||||||||||
| Interest expense | |||||||||||||||||||
| Deposits | 4,265 | 5,296 | 8,251 | 23,919 | 29,927 | ||||||||||||||
| Short-term borrowings | 142 | 175 | 368 | 914 | 1,847 | ||||||||||||||
| Long-term debt | 2,026 | 1,874 | 1,823 | 6,990 | 7,017 | ||||||||||||||
| Total interest expense | 6,433 | 7,345 | 10,442 | 31,823 | 38,791 | ||||||||||||||
| Net interest income | 39,037 | 37,809 | 39,584 | 152,964 | 143,650 | ||||||||||||||
| Credit loss (benefit) expense | (3,041 | ) | 4,992 | 604 | 28,369 | 7,158 | |||||||||||||
| Net interest income after credit loss (benefit) expense | 42,078 | 32,817 | 38,980 | 124,595 | 136,492 | ||||||||||||||
| Noninterest income | |||||||||||||||||||
| Investment services and trust activities | 2,518 | 2,361 | 2,421 | 9,632 | 8,040 | ||||||||||||||
| Service charges and fees | 1,571 | 1,491 | 2,072 | 6,178 | 7,452 | ||||||||||||||
| Card revenue | 1,517 | 1,600 | 1,142 | 5,719 | 5,594 | ||||||||||||||
| Loan revenue | 3,900 | 3,252 | 1,757 | 10,185 | 3,789 | ||||||||||||||
| Bank-owned life insurance | 541 | 530 | 501 | 2,226 | 1,877 | ||||||||||||||
| Insurance commissions | — | — | — | — | 734 | ||||||||||||||
| Investment securities gains, net | 30 | 106 | 18 | 184 | 90 | ||||||||||||||
| Other | 549 | 230 | 1,125 | 4,496 | 3,670 | ||||||||||||||
| Total noninterest income | 10,626 | 9,570 | 9,036 | 38,620 | 31,246 | ||||||||||||||
| Noninterest expense | |||||||||||||||||||
| Compensation and employee benefits | 17,638 | 16,460 | 19,246 | 66,397 | 65,660 | ||||||||||||||
| Occupancy expense of premises, net | 2,476 | 2,278 | 2,347 | 9,348 | 8,647 | ||||||||||||||
| Equipment | 2,040 | 1,935 | 2,251 | 7,865 | 7,717 | ||||||||||||||
| Legal and professional | 2,052 | 1,184 | 1,797 | 6,153 | 8,049 | ||||||||||||||
| Data processing | 1,460 | 1,308 | 1,492 | 5,362 | 4,579 | ||||||||||||||
| Marketing | 986 | 857 | 1,147 | 3,815 | 3,789 | ||||||||||||||
| Amortization of intangibles | 1,569 | 1,631 | 1,941 | 6,976 | 5,906 | ||||||||||||||
| FDIC insurance | 495 | 470 | (72 | ) | 1,858 | 690 | |||||||||||||
| Communications | 412 | 428 | 493 | 1,746 | 1,701 | ||||||||||||||
| Foreclosed assets, net | (35 | ) | 13 | 173 | 150 | 580 | |||||||||||||
| Goodwill impairment | — | 31,500 | — | 31,500 | — | ||||||||||||||
| Other | 2,822 | 1,875 | 5,621 | 8,723 | 10,217 | ||||||||||||||
| Total noninterest expense | 31,915 | 59,939 | 36,436 | 149,893 | 117,535 | ||||||||||||||
| Income (loss) before income tax expense | 20,789 | (17,552 | ) | 11,580 | 13,322 | 50,203 | |||||||||||||
| Income tax expense (benefit) | 4,079 | 2,272 | (1,791 | ) | 6,699 | 6,573 | |||||||||||||
| Net income (loss) | $ | 16,710 | $ | (19,824 | ) | $ | 13,371 | $ | 6,623 | $ | 43,630 | ||||||||
| Earnings (loss) per common share | |||||||||||||||||||
| Basic | $ | 1.04 | $ | (1.23 | ) | $ | 0.83 | $ | 0.41 | $ | 2.93 | ||||||||
| Diluted | $ | 1.04 | $ | (1.23 | ) | $ | 0.83 | $ | 0.41 | $ | 2.93 | ||||||||
| Weighted average basic common shares outstanding | 16,074 | 16,099 | 16,162 | 16,102 | 14,870 | ||||||||||||||
| Weighted average diluted common shares outstanding | 16,092 | 16,099 | 16,193 | 16,110 | 14,885 | ||||||||||||||
| Dividends paid per common share | $ | 0.2200 | $ | 0.2200 | $ | 0.2025 | $ | 0.8800 | $ | 0.8100 | |||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| (In thousands) | 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 65,078 | $ | 71,901 | $ | 65,863 | $ | 60,396 | $ | 67,174 | |||||||||
| Interest earning deposits in banks | 17,409 | 55,421 | 45,018 | 58,319 | 6,112 | ||||||||||||||
| Federal funds sold | 172 | 7,540 | 6,329 | 6,830 | 198 | ||||||||||||||
| Total cash and cash equivalents | 82,659 | 134,862 | 117,210 | 125,545 | 73,484 | ||||||||||||||
| Debt securities available for sale at fair value | 1,657,381 | 1,366,344 | 1,187,455 | 881,859 | 785,977 | ||||||||||||||
| Loans held for sale | 59,956 | 13,096 | 12,048 | 9,483 | 5,400 | ||||||||||||||
| Gross loans held for investment | 3,496,790 | 3,555,969 | 3,618,675 | 3,440,907 | 3,469,236 | ||||||||||||||
| Unearned income, net | (14,567 | ) | (18,537 | ) | (21,636 | ) | (15,145 | ) | (17,970 | ) | |||||||||
| Loans held for investment, net of unearned income | 3,482,223 | 3,537,432 | 3,597,039 | 3,425,762 | 3,451,266 | ||||||||||||||
| Allowance for credit losses | (55,500 | ) | (58,500 | ) | (55,644 | ) | (51,187 | ) | (29,079 | ) | |||||||||
| Total loans held for investment, net | 3,426,723 | 3,478,932 | 3,541,395 | 3,374,575 | 3,422,187 | ||||||||||||||
| Premises and equipment, net | 86,401 | 87,955 | 88,929 | 89,860 | 90,723 | ||||||||||||||
| Goodwill | 62,477 | 62,477 | 93,977 | 93,977 | 91,918 | ||||||||||||||
| Other intangible assets, net | 25,242 | 26,811 | 28,443 | 30,190 | 32,218 | ||||||||||||||
| Foreclosed assets, net | 2,316 | 724 | 965 | 968 | 3,706 | ||||||||||||||
| Other assets | 153,493 | 159,507 | 160,541 | 157,452 | 147,960 | ||||||||||||||
| Total assets | $ | 5,556,648 | $ | 5,330,708 | $ | 5,230,963 | $ | 4,763,909 | $ | 4,653,573 | |||||||||
| LIABILITIES | |||||||||||||||||||
| Noninterest bearing deposits | $ | 910,655 | $ | 864,504 | $ | 867,637 | $ | 637,127 | $ | 662,209 | |||||||||
| Interest bearing deposits | 3,636,394 | 3,469,137 | 3,397,798 | 3,222,717 | 3,066,446 | ||||||||||||||
| Total deposits | 4,547,049 | 4,333,641 | 4,265,435 | 3,859,844 | 3,728,655 | ||||||||||||||
| Short-term borrowings | 230,789 | 183,893 | 162,224 | 129,489 | 139,349 | ||||||||||||||
| Long-term debt | 208,691 | 245,481 | 189,973 | 209,874 | 231,660 | ||||||||||||||
| Other liabilities | 54,869 | 68,612 | 92,550 | 64,138 | 44,927 | ||||||||||||||
| Total liabilities | 5,041,398 | 4,831,627 | 4,710,182 | 4,263,345 | 4,144,591 | ||||||||||||||
| SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Common stock | 16,581 | 16,581 | 16,581 | 16,581 | 16,581 | ||||||||||||||
| Additional paid-in capital | 300,137 | 299,939 | 299,542 | 299,412 | 297,390 | ||||||||||||||
| Retained earnings | 188,191 | 175,017 | 198,382 | 190,212 | 201,105 | ||||||||||||||
| Treasury stock | (14,251 | ) | (12,272 | ) | (12,272 | ) | (12,518 | ) | (10,466 | ) | |||||||||
| Accumulated other comprehensive income | 24,592 | 19,816 | 18,548 | 6,877 | 4,372 | ||||||||||||||
| Total shareholders' equity | 515,250 | 499,081 | 520,781 | 500,564 | 508,982 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 5,556,648 | $ | 5,330,708 | $ | 5,230,963 | $ | 4,763,909 | $ | 4,653,573 | |||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| (In thousands, except per share data) | 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||
| Interest income | |||||||||||||||||||
| Loans, including fees | $ | 38,239 | $ | 38,191 | $ | 40,214 | $ | 42,012 | $ | 44,906 | |||||||||
| Taxable investment securities | 4,673 | 4,574 | 4,646 | 3,717 | 3,540 | ||||||||||||||
| Tax-exempt investment securities | 2,529 | 2,360 | 1,858 | 1,512 | 1,465 | ||||||||||||||
| Other | 29 | 29 | 40 | 164 | 115 | ||||||||||||||
| Total interest income | 45,470 | 45,154 | 46,758 | 47,405 | 50,026 | ||||||||||||||
| Interest expense | |||||||||||||||||||
| Deposits | 4,265 | 5,296 | 6,409 | 7,949 | 8,251 | ||||||||||||||
| Short-term borrowings | 142 | 175 | 263 | 334 | 368 | ||||||||||||||
| Long-term debt | 2,026 | 1,874 | 1,374 | 1,716 | 1,823 | ||||||||||||||
| Total interest expense | 6,433 | 7,345 | 8,046 | 9,999 | 10,442 | ||||||||||||||
| Net interest income | 39,037 | 37,809 | 38,712 | 37,406 | 39,584 | ||||||||||||||
| Credit loss (benefit) expense | (3,041 | ) | 4,992 | 4,685 | 21,733 | 604 | |||||||||||||
| Net interest income after credit loss (benefit) expense | 42,078 | 32,817 | 34,027 | 15,673 | 38,980 | ||||||||||||||
| Noninterest income | |||||||||||||||||||
| Investment services and trust activities | 2,518 | 2,361 | 2,217 | 2,536 | 2,421 | ||||||||||||||
| Service charges and fees | 1,571 | 1,491 | 1,290 | 1,826 | 2,072 | ||||||||||||||
| Card revenue | 1,517 | 1,600 | 1,237 | 1,365 | 1,142 | ||||||||||||||
| Loan revenue | 3,900 | 3,252 | 1,910 | 1,123 | 1,757 | ||||||||||||||
| Bank-owned life insurance | 541 | 530 | 635 | 520 | 501 | ||||||||||||||
| Investment securities gains, net | 30 | 106 | 6 | 42 | 18 | ||||||||||||||
| Other | 549 | 230 | 974 | 2,743 | 1,125 | ||||||||||||||
| Total noninterest income | 10,626 | 9,570 | 8,269 | 10,155 | 9,036 | ||||||||||||||
| Noninterest expense | |||||||||||||||||||
| Compensation and employee benefits | 17,638 | 16,460 | 15,682 | 16,617 | 19,246 | ||||||||||||||
| Occupancy expense of premises, net | 2,476 | 2,278 | 2,253 | 2,341 | 2,347 | ||||||||||||||
| Equipment | 2,040 | 1,935 | 2,010 | 1,880 | 2,251 | ||||||||||||||
| Legal and professional | 2,052 | 1,184 | 1,382 | 1,535 | 1,797 | ||||||||||||||
| Data processing | 1,460 | 1,308 | 1,240 | 1,354 | 1,492 | ||||||||||||||
| Marketing | 986 | 857 | 910 | 1,062 | 1,147 | ||||||||||||||
| Amortization of intangibles | 1,569 | 1,631 | 1,748 | 2,028 | 1,941 | ||||||||||||||
| FDIC insurance | 495 | 470 | 445 | 448 | (72 | ) | |||||||||||||
| Communications | 412 | 428 | 449 | 457 | 493 | ||||||||||||||
| Foreclosed assets, net | (35 | ) | 13 | 34 | 138 | 173 | |||||||||||||
| Goodwill impairment | — | 31,500 | — | — | — | ||||||||||||||
| Other | 2,822 | 1,875 | 1,885 | 2,141 | 5,621 | ||||||||||||||
| Total noninterest expense | 31,915 | 59,939 | 28,038 | 30,001 | 36,436 | ||||||||||||||
| Income (loss) before income tax expense | 20,789 | (17,552 | ) | 14,258 | (4,173 | ) | 11,580 | ||||||||||||
| Income tax expense (benefit) | 4,079 | 2,272 | 2,546 | (2,198 | ) | (1,791 | ) | ||||||||||||
| Net income (loss) | $ | 16,710 | $ | (19,824 | ) | $ | 11,712 | $ | (1,975 | ) | $ | 13,371 | |||||||
| Earnings (loss) per common share | |||||||||||||||||||
| Basic | $ | 1.04 | $ | (1.23 | ) | $ | 0.73 | $ | (0.12 | ) | $ | 0.83 | |||||||
| Diluted | $ | 1.04 | $ | (1.23 | ) | $ | 0.73 | $ | (0.12 | ) | $ | 0.83 | |||||||
| Weighted average basic common shares outstanding | 16,074 | 16,099 | 16,094 | 16,142 | 16,162 | ||||||||||||||
| Weighted average diluted common shares outstanding | 16,092 | 16,099 | 16,100 | 16,142 | 16,193 | ||||||||||||||
| Dividends paid per common share | $ | 0.2200 | $ | 0.2200 | $ | 0.2200 | $ | 0.2200 | $ | 0.2025 | |||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
| Three Months Ended | ||||||||||||||||||||||||||||||||
| December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||
| (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) | $ | 3,560,632 | $ | 38,795 | 4.33 | % | $ | 3,576,642 | $ | 38,727 | 4.31 | % | $ | 3,493,496 | $ | 45,429 | 5.16 | % | ||||||||||||||
| Taxable investment securities | 1,026,359 | 4,673 | 1.81 | % | 864,864 | 4,574 | 2.10 | % | 508,911 | 3,540 | 2.76 | % | ||||||||||||||||||||
| Tax-exempt investment securities (2)(4) | 450,659 | 3,180 | 2.81 | % | 405,517 | 2,968 | 2.91 | % | 211,695 | 1,846 | 3.46 | % | ||||||||||||||||||||
| Total securities held for investment(2) | 1,477,018 | 7,853 | 2.12 | % | 1,270,381 | 7,542 | 2.36 | % | 720,606 | 5,386 | 2.97 | % | ||||||||||||||||||||
| Other | 80,019 | 29 | 0.14 | % | 88,152 | 29 | 0.13 | % | 28,227 | 115 | 1.62 | % | ||||||||||||||||||||
| Total interest earning assets(2) | $ | 5,117,669 | 46,677 | 3.63 | % | $ | 4,935,175 | 46,298 | 3.73 | % | $ | 4,242,329 | 50,930 | 4.76 | % | |||||||||||||||||
| Other assets | 340,270 | 376,211 | 392,254 | |||||||||||||||||||||||||||||
| Total assets | $ | 5,457,939 | $ | 5,311,386 | $ | 4,634,583 | ||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||
| Interest checking deposits | $ | 1,276,320 | $ | 958 | 0.30 | % | $ | 1,174,033 | $ | 1,049 | 0.36 | % | $ | 926,155 | $ | 1,394 | 0.60 | % | ||||||||||||||
| Money market deposits | 931,900 | 544 | 0.23 | % | 847,059 | 622 | 0.29 | % | 784,752 | 1,820 | 0.92 | % | ||||||||||||||||||||
| Savings deposits | 508,763 | 279 | 0.22 | % | 473,000 | 351 | 0.30 | % | 388,338 | 389 | 0.40 | % | ||||||||||||||||||||
| Time deposits | 862,408 | 2,484 | 1.15 | % | 931,655 | 3,274 | 1.40 | % | 953,804 | 4,648 | 1.93 | % | ||||||||||||||||||||
| Total interest bearing deposits | 3,579,391 | 4,265 | 0.47 | % | 3,425,747 | 5,296 | 0.62 | % | 3,053,049 | 8,251 | 1.07 | % | ||||||||||||||||||||
| Short-term borrowings | 182,080 | 142 | 0.31 | % | 165,840 | 175 | 0.42 | % | 126,508 | 368 | 1.15 | % | ||||||||||||||||||||
| Long-term debt | 223,407 | 2,026 | 3.61 | % | 231,406 | 1,874 | 3.22 | % | 237,788 | 1,823 | 3.04 | % | ||||||||||||||||||||
| Total borrowed funds | 405,487 | 2,168 | 2.13 | % | 397,246 | 2,049 | 2.05 | % | 364,296 | 2,191 | 2.39 | % | ||||||||||||||||||||
| Total interest bearing liabilities | $ | 3,984,878 | $ | 6,433 | 0.64 | % | $ | 3,822,993 | $ | 7,345 | 0.76 | % | $ | 3,417,345 | $ | 10,442 | 1.21 | % | ||||||||||||||
| Noninterest bearing deposits | 910,657 | 891,425 | 670,884 | |||||||||||||||||||||||||||||
| Other liabilities | 56,898 | 67,111 | 43,343 | |||||||||||||||||||||||||||||
| Shareholders’ equity | 505,506 | 529,857 | 503,011 | |||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,457,939 | $ | 5,311,386 | $ | 4,634,583 | ||||||||||||||||||||||||||
| Net interest income(2) | $ | 40,244 | $ | 38,953 | $ | 40,488 | ||||||||||||||||||||||||||
| Net interest spread(2) | 2.99 | % | 2.97 | % | 3.55 | % | ||||||||||||||||||||||||||
| Net interest margin(2) | 3.13 | % | 3.14 | % | 3.79 | % | ||||||||||||||||||||||||||
| Total deposits(5) | $ | 4,490,048 | $ | 4,265 | 0.38 | % | $ | 4,317,172 | $ | 5,296 | 0.49 | % | $ | 3,723,933 | $ | 8,251 | 0.88 | % | ||||||||||||||
| Cost of funds(6) | 0.52 | % | 0.62 | % | 1.01 | % | ||||||||||||||||||||||||||
(1) Average balance includes nonaccrual loans.
(2) Tax equivalent. The federal statutory tax rate utilized was 21%.
(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $2.5 million, $1.1 million, and $354 thousand for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. Loan purchase discount accretion was $1.5 million, $1.9 million, and $3.9 million for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. Tax equivalent adjustments were $556 thousand, $536 thousand, and $523 thousand for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $651 thousand, $608 thousand, and $381 thousand for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. The federal statutory tax rate utilized was 21%.
(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.
| Year Ended | |||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | ||||||||||||||||||||
| (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) | $ | 3,551,945 | $ | 160,752 | 4.53 | % | $ | 3,157,127 | $ | 164,948 | 5.22 | % | |||||||||
| Taxable investment securities | 797,954 | 17,610 | 2.21 | % | 465,484 | 13,132 | 2.82 | % | |||||||||||||
| Tax-exempt investment securities (2)(4) | 342,000 | 10,395 | 3.04 | % | 204,375 | 7,177 | 3.51 | % | |||||||||||||
| Total securities held for investment(2) | 1,139,954 | 28,005 | 2.46 | % | 669,859 | 20,309 | 3.03 | % | |||||||||||||
| Other | 73,255 | 262 | 0.36 | % | 21,289 | 450 | 2.11 | % | |||||||||||||
| Total interest earning assets(2) | $ | 4,765,154 | 189,019 | 3.97 | % | $ | 3,848,275 | 185,707 | 4.83 | % | |||||||||||
| Other assets | 370,687 | 352,765 | |||||||||||||||||||
| Total assets | $ | 5,135,841 | $ | 4,201,040 | |||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||
| Interest checking deposits | $ | 1,108,997 | $ | 4,435 | 0.40 | % | $ | 806,624 | $ | 4,723 | 0.59 | % | |||||||||
| Money market deposits | 844,137 | 3,696 | 0.44 | % | 766,812 | 7,549 | 0.98 | % | |||||||||||||
| Savings deposits | 454,000 | 1,386 | 0.31 | % | 329,199 | 1,092 | 0.33 | % | |||||||||||||
| Time deposits | 945,234 | 14,402 | 1.52 | % | 873,978 | 16,563 | 1.90 | % | |||||||||||||
| Total interest bearing deposits | 3,352,368 | 23,919 | 0.71 | % | 2,776,613 | 29,927 | 1.08 | % | |||||||||||||
| Short-term borrowings | 157,346 | 914 | 0.58 | % | 124,956 | 1,847 | 1.48 | % | |||||||||||||
| Long-term debt | 220,448 | 6,990 | 3.17 | % | 224,149 | 7,017 | 3.13 | % | |||||||||||||
| Total borrowed funds | 377,794 | 7,904 | 2.09 | % | 349,105 | 8,864 | 2.54 | % | |||||||||||||
| Total interest bearing liabilities | $ | 3,730,162 | $ | 31,823 | 0.85 | % | $ | 3,125,718 | $ | 38,791 | 1.24 | % | |||||||||
| Noninterest bearing deposits | 832,038 | 586,100 | |||||||||||||||||||
| Other liabilities | 58,186 | 37,204 | |||||||||||||||||||
| Shareholders’ equity | 515,455 | 452,018 | |||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,135,841 | $ | 4,201,040 | |||||||||||||||||
| Net interest income(2) | $ | 157,196 | $ | 146,916 | |||||||||||||||||
| Net interest spread(2) | 3.12 | % | 3.59 | % | |||||||||||||||||
| Net interest margin(2) | 3.30 | % | 3.82 | % | |||||||||||||||||
| Total deposits(5) | $ | 4,184,406 | $ | 23,919 | 0.57 | % | $ | 3,362,713 | $ | 29,927 | 0.89 | % | |||||||||
| Cost of funds(6) | 0.70 | % | 1.05 | % | |||||||||||||||||
(1) Average balance includes nonaccrual loans.
(2) Tax equivalent. The federal statutory tax rate utilized was 21%.
(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $4.4 million and $(316) thousand for the year ended December 31, 2020 and December 31, 2019, respectively. Loan purchase discount accretion was $9.1 million and $14.0 million for the year ended December 31, 2020 and December 31, 2019, respectively. Tax equivalent adjustments were $2.1 million and $1.8 million for the year ended December 31, 2020 and December 31, 2019, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $2.1 million and $1.5 million for the year ended December 31, 2020 and December 31, 2019, respectively. The federal statutory tax rate utilized was 21%.
(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.
Non-GAAP Measures
This earnings release contains non-GAAP measures for tangible common equity, tangible book value per share, tangible common equity ratio, return on average tangible equity, net interest margin (tax equivalent), core net interest margin, loan yield (tax equivalent), efficiency ratio, core earnings, adjusted allowance for credit losses ratio, core loans, and core commercial loans. Management believes these measures provide investors with useful information regarding the Company’s profitability, financial condition and capital adequacy, consistent with how management evaluates the Company’s financial performance. The following tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP measure.
| Tangible Common Equity/Tangible Book Value | |||||||||||||||||||||||||
| per Share/Tangible Common Equity Ratio | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||||||||
| Total shareholders’ equity | $ | 515,250 | $ | 499,081 | $ | 520,781 | $ | 500,564 | $ | 508,982 | |||||||||||||||
| Intangible assets, net | (87,719 | ) | (89,288 | ) | (122,420 | ) | (124,167 | ) | (124,136 | ) | |||||||||||||||
| Tangible common equity | $ | 427,531 | $ | 409,793 | $ | 398,361 | $ | 376,397 | $ | 384,846 | |||||||||||||||
| Total assets | $ | 5,556,648 | $ | 5,330,708 | $ | 5,230,963 | $ | 4,763,909 | $ | 4,653,573 | |||||||||||||||
| Intangible assets, net | (87,719 | ) | (89,288 | ) | (122,420 | ) | (124,167 | ) | (124,136 | ) | |||||||||||||||
| Tangible assets | $ | 5,468,929 | $ | 5,241,420 | $ | 5,108,543 | $ | 4,639,742 | $ | 4,529,437 | |||||||||||||||
| Book value per share | $ | 32.17 | $ | 31.00 | $ | 32.35 | $ | 31.11 | $ | 31.49 | |||||||||||||||
| Tangible book value per share(1) | $ | 26.69 | $ | 25.45 | $ | 24.74 | $ | 23.39 | $ | 23.81 | |||||||||||||||
| Shares outstanding | 16,016,780 | 16,099,324 | 16,099,324 | 16,089,782 | 16,162,176 | ||||||||||||||||||||
| Equity to assets ratio | 9.27 | % | 9.36 | % | 9.96 | % | 10.51 | % | 10.94 | % | |||||||||||||||
| Tangible common equity ratio(2) | 7.82 | % | 7.82 | % | 7.80 | % | 8.11 | % | 8.50 | % | |||||||||||||||
(1) Tangible common equity divided by shares outstanding.
(2) Tangible common equity divided by tangible assets.
| Three Months Ended | Year Ended | ||||||||||||||||||||||||
| Return on Average Tangible Equity | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||
| (Dollars in thousands) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Net income (loss) | $ | 16,710 | $ | (19,824 | ) | $ | 13,371 | $ | 6,623 | $ | 43,630 | ||||||||||||||
| Intangible amortization, net of tax(1) | 1,177 | 1,223 | 1,456 | 5,232 | 4,430 | ||||||||||||||||||||
| Goodwill impairment | — | 31,500 | — | 31,500 | — | ||||||||||||||||||||
| Tangible net income | $ | 17,887 | $ | 12,899 | $ | 14,827 | $ | 43,355 | $ | 48,060 | |||||||||||||||
| Average shareholders’ equity | $ | 505,506 | $ | 529,857 | $ | 503,011 | $ | 515,455 | $ | 452,018 | |||||||||||||||
| Average intangible assets, net | (88,543 | ) | (121,306 | ) | (125,898 | ) | (113,978 | ) | (108,242 | ) | |||||||||||||||
| Average tangible equity | $ | 416,963 | $ | 408,551 | $ | 377,113 | $ | 401,477 | $ | 343,776 | |||||||||||||||
| Return on average equity | 13.15 | % | (14.88 | ) | % | 10.55 | % | 1.28 | % | 9.65 | % | ||||||||||||||
| Return on average tangible equity(2) | 17.07 | % | 12.56 | % | 15.60 | % | 10.80 | % | 13.98 | % | |||||||||||||||
(1) The combined income tax rate utilized was 25%.
(2) Annualized tangible net income divided by average tangible equity.
| Net Interest Margin, Tax Equivalent/ Core Net Interest Margin | Three Months Ended | Year Ended | |||||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||||||
| (Dollars in thousands) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Net interest income | $ | 39,037 | $ | 37,809 | $ | 39,584 | $ | 152,964 | $ | 143,650 | |||||||||||||||
| Tax equivalent adjustments: | |||||||||||||||||||||||||
| Loans(1) | 556 | 536 | 523 | 2,096 | 1,785 | ||||||||||||||||||||
| Securities(1) | 651 | 608 | 381 | 2,136 | 1,481 | ||||||||||||||||||||
| Net interest income, tax equivalent | $ | 40,244 | $ | 38,953 | $ | 40,488 | $ | 157,196 | $ | 146,916 | |||||||||||||||
| Loan purchase discount accretion | (1,542 | ) | (1,923 | ) | (3,937 | ) | (9,098 | ) | (13,977 | ) | |||||||||||||||
| Core net interest income | $ | 38,702 | $ | 37,030 | $ | 36,551 | $ | 148,098 | $ | 132,939 | |||||||||||||||
| Net interest margin | 3.03 | % | 3.05 | % | 3.70 | % | 3.21 | % | 3.73 | % | |||||||||||||||
| Net interest margin, tax equivalent(2) | 3.13 | % | 3.14 | % | 3.79 | % | 3.30 | % | 3.82 | % | |||||||||||||||
| Core net interest margin(3) | 3.01 | % | 2.99 | % | 3.42 | % | 3.11 | % | 3.45 | % | |||||||||||||||
| Average interest earning assets | $ | 5,117,669 | $ | 4,935,175 | $ | 4,242,329 | $ | 4,765,154 | $ | 3,848,275 | |||||||||||||||
(1) The federal statutory tax rate utilized was 21%.
(2) Annualized tax equivalent net interest income divided by average interest earning assets.
(3) Annualized core net interest income divided by average interest earning assets.
| Three Months Ended | Year Ended | ||||||||||||||||||||||||
| Loan Yield, Tax Equivalent | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||
| (Dollars in thousands) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Loan interest income, including fees | $ | 38,239 | $ | 38,191 | $ | 44,906 | $ | 158,656 | $ | 163,163 | |||||||||||||||
| Tax equivalent adjustment(1) | 556 | 536 | 523 | 2,096 | 1,785 | ||||||||||||||||||||
| Tax equivalent loan interest income | $ | 38,795 | $ | 38,727 | $ | 45,429 | $ | 160,752 | $ | 164,948 | |||||||||||||||
| Loan purchase discount accretion | (1,542 | ) | (1,923 | ) | (3,937 | ) | (9,098 | ) | (13,977 | ) | |||||||||||||||
| Core loan interest income | $ | 37,253 | $ | 36,804 | $ | 41,492 | $ | 151,654 | $ | 150,971 | |||||||||||||||
| Yield on loans | 4.27 | % | 4.25 | % | 5.10 | % | 4.47 | % | 5.17 | % | |||||||||||||||
| Yield on loans, tax equivalent(2) | 4.33 | % | 4.31 | % | 5.16 | % | 4.53 | % | 5.22 | % | |||||||||||||||
| Core yield on loans(3) | 4.16 | % | 4.09 | % | 4.71 | % | 4.27 | % | 4.78 | % | |||||||||||||||
| Average loans | $ | 3,560,632 | $ | 3,576,642 | $ | 3,493,496 | $ | 3,551,945 | $ | 3,157,127 | |||||||||||||||
(1) The federal statutory tax rate utilized was 21%.
(2) Annualized tax equivalent loan interest income divided by average loans.
(3) Annualized core loan interest income divided by average loans.
| Three Months Ended | Year Ended | ||||||||||||||||||||||||
| Efficiency Ratio | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||
| (Dollars in thousands) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Total noninterest expense | $ | 31,915 | $ | 59,939 | $ | 36,436 | $ | 149,893 | $ | 117,535 | |||||||||||||||
| Amortization of intangibles | (1,569 | ) | (1,631 | ) | (1,941 | ) | (6,976 | ) | (5,906 | ) | |||||||||||||||
| Merger-related expenses | — | — | (3,282 | ) | (61 | ) | (9,130 | ) | |||||||||||||||||
| Goodwill impairment | — | (31,500 | ) | — | (31,500 | ) | — | ||||||||||||||||||
| Noninterest expense used for efficiency ratio | $ | 30,346 | $ | 26,808 | $ | 31,213 | $ | 111,356 | $ | 102,499 | |||||||||||||||
| Net interest income, tax equivalent(1) | $ | 40,244 | $ | 38,953 | $ | 40,488 | $ | 157,196 | $ | 146,916 | |||||||||||||||
| Noninterest income | 10,626 | 9,570 | 9,036 | 38,620 | 31,246 | ||||||||||||||||||||
| Investment securities gains, net | (30 | ) | (106 | ) | (18 | ) | (184 | ) | (90 | ) | |||||||||||||||
| Net revenues used for efficiency ratio | $ | 50,840 | $ | 48,417 | $ | 49,506 | $ | 195,632 | $ | 178,072 | |||||||||||||||
| Efficiency ratio (2) | 59.69 | % | 55.37 | % | 63.05 | % | 56.92 | % | 57.56 | % | |||||||||||||||
(1) The federal statutory tax rate utilized was 21%.
(2) Noninterest expense adjusted for amortization of intangibles, merger-related expenses, and goodwill impairment divided by the sum of tax equivalent net interest income, noninterest income and net investment securities gains.
| Three Months Ended | Year Ended | ||||||||||||||||||||
| Core Earnings | December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| (Dollars in thousands, except per share data) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| Net income (loss) | $ | 16,710 | $ | (19,824 | ) | $ | 13,371 | $ | 6,623 | $ | 43,630 | ||||||||||
| Goodwill impairment | — | 31,500 | — | 31,500 | — | ||||||||||||||||
| Core earnings | $ | 16,710 | $ | 11,676 | $ | 13,371 | $ | 38,123 | $ | 43,630 | |||||||||||
| Weighted average diluted common shares outstanding | 16,092 | 16,099 | 16,193 | 16,110 | 14,885 | ||||||||||||||||
| Earnings (loss) per common share | |||||||||||||||||||||
| Earnings per common share - diluted | $ | 1.04 | $ | (1.23 | ) | $ | 0.83 | $ | 0.41 | $ | 2.93 | ||||||||||
| Core earnings per common share - diluted (1) | $ | 1.04 | $ | 0.73 | $ | 0.83 | $ | 2.37 | $ | 2.93 | |||||||||||
(1) Core earnings divided by weighted average diluted common shares outstanding
| Adjusted Allowance for Credit Losses Ratio | December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||
| (Dollars in thousands) | 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||||||
| Loans held for investment, net of unearned income | $ | 3,482,223 | $ | 3,537,432 | $ | 3,597,039 | $ | 3,425,762 | $ | 3,451,266 | |||||||||||||
| PPP loans | (259,260 | ) | (331,703 | ) | (327,648 | ) | — | — | |||||||||||||||
| Core loans | $ | 3,222,963 | $ | 3,205,729 | $ | 3,269,391 | $ | 3,425,762 | $ | 3,451,266 | |||||||||||||
| Allowance for credit losses | $ | 55,500 | $ | 58,500 | $ | 55,644 | $ | 51,187 | $ | 29,079 | |||||||||||||
| Allowance for credit losses ratio | 1.59 | % | 1.65 | % | 1.55 | % | 1.49 | % | 0.84 | % | |||||||||||||
| Adjusted allowance for credit losses ratio(1) | 1.72 | % | 1.82 | % | 1.70 | % | 1.49 | % | 0.84 | % | |||||||||||||
(1) Allowance for credit losses divided by core loans
| Core Loans/Core Commercial Loans | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| (Dollars in thousands) | 2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
| Commercial loans: | ||||||||||||||||||||
| Commercial and industrial | $ | 1,055,488 | $ | 1,103,102 | $ | 1,084,527 | $ | 864,702 | $ | 835,236 | ||||||||||
| Agricultural | 116,392 | 129,453 | 140,837 | 145,435 | 140,446 | |||||||||||||||
| Commercial real estate | 1,732,361 | 1,707,035 | 1,764,739 | 1,780,446 | 1,814,859 | |||||||||||||||
| Total commercial loans | $ | 2,904,241 | $ | 2,939,590 | $ | 2,990,103 | $ | 2,790,583 | $ | 2,790,541 | ||||||||||
| Consumer loans: | ||||||||||||||||||||
| Residential real estate | $ | 499,106 | $ | 521,570 | $ | 532,914 | $ | 554,290 | $ | 577,799 | ||||||||||
| Other consumer | 78,876 | 76,272 | 74,022 | 80,889 | 82,926 | |||||||||||||||
| Total consumer loans | $ | 577,982 | $ | 597,842 | $ | 597,842 | $ | 597,842 | $ | 597,842 | ||||||||||
| Loans held for investment, net of unearned income | $ | 3,482,223 | $ | 3,537,432 | $ | 3,587,945 | $ | 3,388,425 | $ | 3,388,383 | ||||||||||
| PPP loans | $ | 259,260 | $ | 331,703 | $ | 327,648 | $ | — | $ | — | ||||||||||
| Core loans(1) | $ | 3,222,963 | $ | 3,205,729 | $ | 3,260,297 | $ | 3,388,425 | $ | 3,388,383 | ||||||||||
| Core commercial loans(2) | $ | 2,644,981 | $ | 2,607,887 | $ | 2,662,455 | $ | 2,790,583 | $ | 2,790,541 | ||||||||||
(1) Core loans are calculated as loans held for investment, net of unearned income less PPP loans.
(2) Core commercial loans are calculated as total commercial loans less PPP loans.
Category: Earnings
Source: MidWestOne Financial Group, Inc.
| Contact: | |||
| Charles N. Funk | Barry S. Ray | ||
| Chief Executive Officer | Senior Executive Vice President and Chief Financial Officer | ||
| 319.356.5800 | 319.356.5800 | ||