IOWA CITY, Iowa, April 25, 2019 (GLOBE NEWSWIRE) -- 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 SUBSIDIARIES
CONSOLIDATED 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 SUBSIDIARIES
CONSOLIDATED 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 SUBSIDIARIES
FIVE 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 SUBSIDIARIES
FIVE 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 SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, 2019 | December 31, 2018 | March 31, 2018 | ||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Average Yield/ Cost | Average Balance | Interest Income/ Expense | Average Yield/ Cost | Average Balance | Interest Income/ Expense | Average Yield/ 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 | ||