Third Quarter Summary1
- Net income for the third quarter was $16.3 million, or $1.03 per diluted common share.
- Total revenue, net of interest expense, of $49.5 million.
- Credit loss benefit of $1.1 million.
- Noninterest expense of $29.8 million.
- Total revenue, net of interest expense, of $49.5 million.
- Excluding Paycheck Protection Program ("PPP") loans, commercial loans were $2.64 billion2, as compared to $2.61 billion2 at the end of the second quarter of 2021 (the "linked quarter"), an increase of 1.2%.
- Efficiency ratio was 56.34%2.
- Nonperforming assets declined 19.0% and the net charge-off ratio was a recovery of 10 basis points ("bps").
- Cost of average total deposits decreased 2 bps to 0.26% and cost of funds decreased 3 bps to 0.37%.
- On November 1, 2021, entered into a definitive agreement pursuant to which the Company will acquire Iowa First Bancshares Corp. and its banking subsidiaries in Muscatine and Fairfield, Iowa.
IOWA CITY, Iowa, Nov. 01, 2021 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported net income for the third quarter of 2021 of $16.3 million, or $1.03 per diluted common share, compared to net income of $17.3 million, or $1.08 per diluted common share, for the linked quarter.
CEO COMMENTARY
Charles Funk, Chief Executive Officer of the Company, commented, "We are excited to expand our footprint to Muscatine and to grow our market share in Fairfield, the seat of Jefferson County, with MidWestOne's acquisition of Iowa First Bancshares Corp. ("IOFB"). With this acquisition, we will have the number one deposit market share in both Muscatine and Jefferson counties. We believe MidWestOne's brand of banking will fit very will with IOFB's brand, and we look forward to meeting our new customers and employees over the next few months. Notably, this transaction will provide good earnings momentum for 2022 and beyond.
The third quarter of 2021 was a strong one for our Company with earnings of $1.03 per diluted common share, a 12.00% return on average equity, and a 15.06% return on average tangible equity2. In a very tough operating environment, we were able to increase our commercial loans, excluding PPP loans, by 1.2%. We are also extremely pleased with the progress being made in asset quality. The year over year decline of 15 bps in our nonperforming loans ratio to 1.03% and the 30 bps decline in the net charge-off ratio to a net recovery ratio of 10 bps are especially impressive. Our trust and investment services group continued to build its business in the third quarter of 2021 and is on track to achieve record revenues in 2021. While we saw our mortgage loan closings trail off in the third quarter of 2021, we nonetheless expect a solid fourth quarter from this business line. With respect to capital, we continue to find value in repurchasing our shares at a price just above our tangible book value per share. Finally, our bankers continue to assist our customers in working through PPP loan forgiveness. We anticipate another sizeable amount of PPP loan forgiveness in the fourth quarter."
1 Third Quarter Summary compares to the linked quarter unless noted.
2 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
| FINANCIAL HIGHLIGHTS | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||
| 2021 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||
| Net interest income | $ | 40,340 | $ | 38,505 | $ | 37,809 | $ | 117,462 | $ | 113,927 | |||||||||||||||
| Noninterest income | 9,182 | 10,218 | 9,570 | 31,224 | 27,994 | ||||||||||||||||||||
| Total revenue, net of interest expense | 49,522 | 48,723 | 47,379 | 148,686 | 141,921 | ||||||||||||||||||||
| Credit loss (benefit) expense | (1,080 | ) | (2,144 | ) | 4,992 | (7,958 | ) | 31,410 | |||||||||||||||||
| Noninterest expense | 29,778 | 28,670 | 59,939 | 86,148 | 117,978 | ||||||||||||||||||||
| Income (loss) before income tax expense | 20,824 | 22,197 | (17,552 | ) | 70,496 | (7,467 | ) | ||||||||||||||||||
| Income tax expense | 4,513 | 4,926 | 2,272 | 15,266 | 2,620 | ||||||||||||||||||||
| Net income (loss) | $ | 16,311 | $ | 17,271 | $ | (19,824 | ) | $ | 55,230 | $ | (10,087 | ) | |||||||||||||
| Diluted earnings (loss) per share | $ | 1.03 | $ | 1.08 | $ | (1.23 | ) | $ | 3.46 | $ | (0.63 | ) | |||||||||||||
| Return on average assets | 1.11 | % | 1.18 | % | (1.48 | ) | % | 1.29 | % | (0.27 | ) | % | |||||||||||||
| Return on average equity | 12.00 | % | 13.24 | % | (14.88 | ) | % | 14.03 | % | (2.60 | ) | % | |||||||||||||
| Return on average tangible equity(1) | 15.06 | % | 16.75 | % | 12.56 | % | 17.69 | % | 8.58 | % | |||||||||||||||
| Efficiency ratio(1) | 56.34 | % | 54.83 | % | 55.37 | % | 53.95 | % | 55.95 | % | |||||||||||||||
| (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 September 30, 2021, the outstanding balance of loans modified as a result of the COVID-19 pandemic totaled $4.5 million, a decline of 78.6% from $21.0 million at June 30, 2021. The decline from the end of the second quarter of 2021 was due largely to one commercial real estate loan where the borrower resumed making payments.
PPP Loans
The following table presents PPP loan measures as of the dates indicated:
| September 30, 2021 | June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Round 1(3) | Round 2(3) | Total | Round 1(3) | Round 2(3) | Total | |||||||||||||||||||||||||||||||
| (Dollars in millions) | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | ||||||||||||||||||||||||
| Total PPP Loans Funded | 2,681 | 348.5 | 2,175 | 149.3 | 4,856 | 497.8 | 2,681 | 348.5 | 2,175 | 149.3 | 4,856 | 497.8 | ||||||||||||||||||||||||
| PPP Loan Forgiveness(1) | 2,478 | 323.7 | 1,514 | 72.9 | 3,992 | 396.6 | 2,247 | 285.7 | 441 | 12.3 | 2,688 | 298.0 | ||||||||||||||||||||||||
| Outstanding PPP Loans(2) | 184 | 16.3 | 661 | 73.1 | 845 | 89.4 | 416 | 53.9 | 1,734 | 130.5 | 2,150 | 184.4 | ||||||||||||||||||||||||
| Unearned Income | $0.1 | $2.8 | $2.9 | $0.5 | $6.0 | $6.5 | ||||||||||||||||||||||||||||||
| (1) Excluded from the PPP Loan Forgiveness is $9.1 million as of September 30, 2021 and $8.9 million as of June 30, 2021 of PPP loans that were paid off by the borrower prior to forgiveness. | ||||||||||||||||||||||||||||||||||||
| (2) Outstanding loans are presented net of unearned income. | ||||||||||||||||||||||||||||||||||||
| (3) Round 1 refers to PPP loan applications from the first wave of funding made available through the CARES Act, which was signed into law by President Trump in March 2020. Round 2 refers to the second wave of PPP funding made available through the Consolidated Appropriations Act, 2021, which was signed into law by President Trump in December 2020 and extended by the PPP Extension Act of 2021, which was signed into law by President Biden in March 2021. | ||||||||||||||||||||||||||||||||||||
INCOME STATEMENT HIGHLIGHTS
Net Interest Income
Net interest income increased to $40.3 million in the third quarter of 2021 from $38.5 million in the second quarter of 2021 due primarily to increased PPP loan fee accretion stemming from loan forgiveness. Net PPP loan fee accretion was $3.6 million in the third quarter of 2021 compared to $2.5 million in the linked quarter.
Average interest earning assets decreased $32.5 million to $5.49 billion in the third quarter of 2021, compared to the second quarter of 2021, which includes a $90.4 million reduction in average PPP loan balances due to forgiveness. Adjusting for the $90.4 million in average PPP loan balance decline, average interest earning assets increased $57.9 million, primarily due to non-PPP loan growth.
The Company's tax equivalent net interest margin was 3.00% in the third quarter of 2021 compared to 2.88% in the linked quarter due to higher earning asset yields and lower funding costs. Total earning asset yields increased 9 bps from the linked quarter due primarily to the increased PPP net loan fee accretion described above. The cost of interest bearing liabilities decreased 3 bps to 0.46%, primarily as a result of interest bearing deposit costs of 0.32%, which declined 3 bps from the linked quarter.
Noninterest Income
Noninterest income for the third quarter of 2021 decreased $1.0 million, or 10.1%, from the linked quarter. The decrease was primarily due to a $1.2 million decrease in loan revenue. The decline in loan revenue included a $0.9 million reduction in mortgage origination fees stemming from lower gain on sale margins and decreased volumes of home mortgage loans as well as a $0.4 million decline in the fair value of our mortgage servicing rights.
The following table presents details of noninterest income for the periods indicated:
| Three Months Ended | |||||||||||
| Noninterest Income | September 30, | June 30, | September 30, | ||||||||
| (In thousands) | 2021 | 2021 | 2020 | ||||||||
| Investment services and trust activities | $ | 2,915 | $ | 2,809 | $ | 2,361 | |||||
| Service charges and fees | 1,613 | 1,475 | 1,491 | ||||||||
| Card revenue | 1,820 | 1,913 | 1,600 | ||||||||
| Loan revenue | 1,935 | 3,151 | 3,252 | ||||||||
| Bank-owned life insurance | 532 | 538 | 530 | ||||||||
| Investment securities gains, net | 36 | 42 | 106 | ||||||||
| Other | 331 | 290 | 230 | ||||||||
| Total noninterest income | $ | 9,182 | $ | 10,218 | $ | 9,570 | |||||
Noninterest Expense
Noninterest expense for the third quarter of 2021 increased $1.1 million, or 3.9%, from the linked quarter primarily due to an increase of $0.7 million in 'other' noninterest expense and a $0.3 million increase in occupancy expense of premises, net. The increase in 'other' noninterest expense was primarily due to expenses of $0.7 million related to the settlement of litigation claims. The increase in occupancy expense of premises, net was primarily attributable to the disposal and write-down of fixed assets totaling $0.3 million. The increase in noninterest expense, as well as the decline in noninterest income noted above, were the primary drivers of the increase in the efficiency ratio, which increased 1.51 percentage points to 56.34%, as compared to the linked quarter efficiency ratio of 54.83%.
The following table presents details of noninterest expense for the periods indicated:
| Three Months Ended | |||||||||||
| Noninterest Expense | September 30, | June 30, | September 30, | ||||||||
| (In thousands) | 2021 | 2021 | 2020 | ||||||||
| Compensation and employee benefits | $ | 17,350 | $ | 17,404 | $ | 16,460 | |||||
| Occupancy expense of premises, net | 2,547 | 2,198 | 2,278 | ||||||||
| Equipment | 1,973 | 1,861 | 1,935 | ||||||||
| Legal and professional | 1,272 | 1,375 | 1,184 | ||||||||
| Data processing | 1,406 | 1,347 | 1,308 | ||||||||
| Marketing | 1,022 | 873 | 857 | ||||||||
| Amortization of intangibles | 1,264 | 1,341 | 1,631 | ||||||||
| FDIC insurance | 435 | 245 | 470 | ||||||||
| Communications | 275 | 371 | 428 | ||||||||
| Foreclosed assets, net | 43 | 136 | 13 | ||||||||
| Other | 2,191 | 1,519 | 1,875 | ||||||||
| Total core noninterest expense | $ | 29,778 | $ | 28,670 | $ | 28,439 | |||||
| Goodwill impairment | — | — | 31,500 | ||||||||
| Total noninterest expense | $ | 29,778 | $ | 28,670 | $ | 59,939 | |||||
Income Taxes
The effective income tax rate was 21.7% in the third quarter of 2021 compared to 22.2% in the linked quarter. The effective income tax rate in the third quarter of 2021 reflected income tax expense 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 bank-owned life insurance. The effective income tax rate for the full year 2021 is expected to be in the range of 20-22%.
| BALANCE SHEET, LIQUIDITY AND CAPITAL HIGHLIGHTS | As of or for the Three Months Ended | ||||||||||
| (Dollars in millions, except per share amounts) | September 30, | June 30, | September 30, | ||||||||
| 2021 | 2021 | 2020 | |||||||||
| Ending Balance Sheet | |||||||||||
| Total assets | $ | 5,875.4 | $ | 5,749.2 | $ | 5,330.7 | |||||
| Loans held for investment, net of unearned income | 3,268.6 | 3,330.2 | 3,537.4 | ||||||||
| Total securities held for investment | 2,136.9 | 2,072.5 | 1,366.3 | ||||||||
| Total deposits | 4,957.8 | 4,792.7 | 4,333.6 | ||||||||
| Average Balance Sheet | |||||||||||
| Average total assets | $ | 5,811.2 | $ | 5,851.7 | $ | 5,311.4 | |||||
| Average total loans | 3,356.7 | 3,396.6 | 3,576.6 | ||||||||
| Average total deposits | 4,882.8 | 4,875.3 | 4,317.2 | ||||||||
| Funding and Liquidity | |||||||||||
| Short-term borrowings | $ | 187.5 | $ | 212.3 | $ | 183.9 | |||||
| Long-term debt | 154.9 | 169.8 | 245.5 | ||||||||
| Loans to deposits ratio | 65.93 | % | 69.48 | % | 81.63 | % | |||||
| Equity | |||||||||||
| Total shareholders' equity | $ | 530.3 | $ | 530.3 | $ | 499.1 | |||||
| Common equity ratio | 9.03 | % | 9.22 | % | 9.36 | % | |||||
| Tangible common equity(1) | 446.7 | 445.4 | 409.8 | ||||||||
| Tangible common equity ratio(1) | 7.71 | % | 7.86 | % | 7.82 | % | |||||
| Per Share Data | |||||||||||
| Book value | $ | 33.71 | $ | 33.22 | $ | 31.00 | |||||
| Tangible book value(1) | $ | 28.40 | $ | 27.90 | $ | 25.45 | |||||
| (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 $61.5 million, or 1.8%, to $3.27 billion from June 30, 2021, driven primarily by PPP loan forgiveness and partially offset by higher revolving line of credit utilization, which increased 2% from the linked quarter to 32% at September 30, 2021 and new loan production.
The following table presents the composition of loans held for investment, net of unearned income, as of the dates indicated:
| Loans Held for Investment | September 30, 2021 | June 30, 2021 | September 30, 2020 | ||||||||||||||||||
| Balance | % of Total | Balance | % of Total | Balance | % of Total | ||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||
| Commercial and industrial | $ | 927,258 | 28.4 | % | $ | 982,092 | 29.5 | % | $ | 1,103,102 | 31.2 | % | |||||||||
| Agricultural | 106,356 | 3.3 | 107,834 | 3.2 | 129,453 | 3.7 | |||||||||||||||
| Commercial real estate | |||||||||||||||||||||
| Construction and development | 146,417 | 4.5 | 168,070 | 5.0 | 191,423 | 5.4 | |||||||||||||||
| Farmland | 130,936 | 4.0 | 134,877 | 4.1 | 152,362 | 4.3 | |||||||||||||||
| Multifamily | 273,347 | 8.4 | 255,826 | 7.7 | 235,241 | 6.7 | |||||||||||||||
| Other | 1,148,658 | 35.0 | 1,147,016 | 34.4 | 1,128,009 | 31.8 | |||||||||||||||
| Total commercial real estate | 1,699,358 | 51.9 | 1,705,789 | 51.2 | 1,707,035 | 48.2 | |||||||||||||||
| Residential real estate | |||||||||||||||||||||
| One-to-four family first liens | 334,267 | 10.2 | 332,117 | 10.0 | 371,390 | 10.5 | |||||||||||||||
| One-to-four family junior liens | 133,869 | 4.1 | 136,464 | 4.1 | 150,180 | 4.2 | |||||||||||||||
| Total residential real estate | 468,136 | 14.3 | 468,581 | 14.1 | 521,570 | 14.7 | |||||||||||||||
| Consumer | 67,536 | 2.1 | 65,860 | 2.0 | 76,272 | 2.2 | |||||||||||||||
| Loans held for investment, net of unearned income | $ | 3,268,644 | 100.0 | % | $ | 3,330,156 | 100.0 | % | $ | 3,537,432 | 100.0 | % | |||||||||
| Total commitments to extend credit | $ | 950,157 | $ | 959,696 | $ | 893,147 | |||||||||||||||
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 | Nine Months Ended | |||||||||||||||||||||||
| Allowance for Credit Losses Roll Forward | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
| (In thousands) | 2021 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Beginning balance | $ | 48,000 | $ | 50,650 | $ | 55,644 | $ | 55,500 | $ | 29,079 | ||||||||||||||
| Cumulative effect of change in accounting principle - CECL | — | — | — | — | 3,984 | |||||||||||||||||||
| Charge-offs | (234 | ) | (840 | ) | (2,188 | ) | (2,077 | ) | (5,788 | ) | ||||||||||||||
| Recoveries | 1,114 | 434 | 347 | 2,235 | 882 | |||||||||||||||||||
| Net recoveries (charge-offs) | 880 | (406 | ) | (1,841 | ) | 158 | (4,906 | ) | ||||||||||||||||
| Credit loss (benefit) expense related to loans | (980 | ) | (2,244 | ) | 4,697 | (7,758 | ) | 30,343 | ||||||||||||||||
| Ending balance | $ | 47,900 | $ | 48,000 | $ | 58,500 | $ | 47,900 | $ | 58,500 | ||||||||||||||
As of September 30, 2021, the allowance for credit losses ("ACL") was $47.9 million, or 1.47% of loans held for investment, net of unearned income, compared with $48.0 million, or 1.44% of loans held for investment, net of unearned income, at June 30, 2021. After excluding net PPP loans, the ACL as a percentage of loans held for investment, net of unearned income, decreased to 1.51%(1) as of September 30, 2021, from 1.53%(1) at June 30, 2021. The decline in the ACL during the third quarter reflected overall improvements in the economic forecast and stabilization of the credit profile outlook when compared to the linked quarter.
(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 | September 30, 2021 | June 30, 2021 | September 30, 2020 | ||||||||||||||||||
| (dollars in thousands) | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||||||||
| Noninterest bearing deposits | $ | 999,887 | 20.2 | % | $ | 952,764 | 19.9 | % | $ | 864,504 | 19.9 | % | |||||||||
| Interest checking deposits | 1,464,389 | 29.5 | 1,414,942 | 29.6 | 1,230,146 | 28.5 | |||||||||||||||
| Money market deposits | 989,095 | 20.0 | 936,683 | 19.5 | 871,336 | 20.1 | |||||||||||||||
| Savings deposits | 616,924 | 12.4 | 596,199 | 12.4 | 486,876 | 11.2 | |||||||||||||||
| Total non-maturity deposits | 4,070,295 | 82.1 | 3,900,588 | 81.4 | 3,452,862 | 79.7 | |||||||||||||||
| Time deposits of $250 and under | 522,907 | 10.5 | 538,331 | 11.2 | 617,229 | 14.2 | |||||||||||||||
| Time deposits over $250 | 364,579 | 7.4 | 353,747 | 7.4 | 263,550 | 6.1 | |||||||||||||||
| Total time deposits | 887,486 | 17.9 | 892,078 | 18.6 | 880,779 | 20.3 | |||||||||||||||
| Total deposits | $ | 4,957,781 | 100.0 | % | $ | 4,792,666 | 100.0 | % | $ | 4,333,641 | 100.0 | % | |||||||||
CREDIT RISK PROFILE
| As of or For the Three Months Ended | |||||||||||||
| Highlights | September 30, | June 30, | September 30, | ||||||||||
| (dollars in thousands) | 2021 | 2021 | 2020 | ||||||||||
| Credit loss (benefit) expense related to loans | $ | (980 | ) | $ | (2,244 | ) | $ | 4,697 | |||||
| Net (recoveries) charge-offs | $ | (880 | ) | $ | 406 | $ | 1,841 | ||||||
| Net (recovery) charge-off ratio(1) | (0.10 | ) | % | 0.05 | % | 0.20 | % | ||||||
| At period-end | |||||||||||||
| Pass | $ | 3,069,314 | $ | 3,102,688 | $ | 3,230,611 | |||||||
| Special Mention / Watch | 82,871 | 115,414 | 176,702 | ||||||||||
| Classified | 116,459 | 112,054 | 130,119 | ||||||||||
| Total loans held for investment, net | $ | 3,268,644 | $ | 3,330,156 | $ | 3,537,432 | |||||||
| Classified loans ratio(2) | 3.56 | % | 3.36 | % | 3.68 | % | |||||||
| Nonaccrual loans held for investment | $ | 33,657 | $ | 40,764 | $ | 39,071 | |||||||
| Accruing loans contractually past due 90 days or more | 51 | 665 | 2,593 | ||||||||||
| Total nonperforming loans | 33,708 | 41,429 | 41,664 | ||||||||||
| Foreclosed assets, net | 454 | 755 | 724 | ||||||||||
| Total nonperforming assets | $ | 34,162 | $ | 42,184 | $ | 42,388 | |||||||
| Nonperforming loans ratio(3) | 1.03 | % | 1.24 | % | 1.18 | % | |||||||
| Nonperforming assets ratio(4) | 0.58 | % | 0.73 | % | 0.80 | % | |||||||
| Allowance for credit losses | $ | 47,900 | $ | 48,000 | $ | 58,500 | |||||||
| Allowance for credit losses ratio(5) | 1.47 | % | 1.44 | % | 1.65 | % | |||||||
| Adjusted allowance for credit losses ratio(6) | 1.51 | % | 1.53 | % | 1.82 | % | |||||||
| (1) Net (recovery) charge-off ratio is calculated as annualized net (recoveries) 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) Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period. | |||||||||||||
| (4) Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period. | |||||||||||||
| (5) Allowance for credit losses ratio is calculated as allowance for credit losses divided by loans held for investment, net of unearned income, at the end of the period. | |||||||||||||
| (6) Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. | |||||||||||||
The following table presents a roll forward of nonperforming loans for the period indicated:
| Nonperforming Loans | ||||||||||||||
| (dollars in thousands) | Nonaccrual | 90+ Days Past Due & Still Accruing | Total | |||||||||||
| Balance at June 30, 2021 | $ | 40,764 | $ | 665 | $ | 41,429 | ||||||||
| Loans placed on nonaccrual or 90+ days past due & still accruing | 574 | 105 | 679 | |||||||||||
| Repayments (including interest applied to principal) | (5,370 | ) | — | (5,370 | ) | |||||||||
| Loans returned to accrual status or no longer past due | (2,256 | ) | (666 | ) | (2,922 | ) | ||||||||
| Charge-offs | (50 | ) | (53 | ) | (103 | ) | ||||||||
| Transfers to foreclosed assets | (5 | ) | — | (5 | ) | |||||||||
| Balance at September 30, 2021 | $ | 33,657 | $ | 51 | $ | 33,708 | ||||||||
CAPITAL
Effective March 31, 2020, we elected the 5-year phase-in option allowed under the interim final rule (IFR) issued by the federal banking regulatory agencies that delays the estimated impact on regulatory capital stemming from the implementation of the current expected credit losses (CECL) accounting standard. 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.
| Regulatory Capital Ratios | September 30, | June 30, | September 30, | |||||
| 2021 (1) | 2021 | 2020 | ||||||
| MidWestOne Financial Group, Inc. Consolidated | ||||||||
| Tier 1 leverage ratio | 8.70 | % | 8.50 | % | 8.52 | % | ||
| Common equity tier 1 capital ratio | 10.26 | % | 10.26 | % | 9.72 | % | ||
| Tier 1 capital ratio | 11.20 | % | 11.21 | % | 10.73 | % | ||
| Total capital ratio | 13.58 | % | 13.63 | % | 13.56 | % | ||
| MidWestOne Bank | ||||||||
| Tier 1 leverage ratio | 9.41 | % | 9.15 | % | 9.26 | % | ||
| Common equity tier 1 capital ratio | 12.14 | % | 12.09 | % | 11.75 | % | ||
| Tier 1 capital ratio | 12.14 | % | 12.09 | % | 11.75 | % | ||
| Total capital ratio | 13.05 | % | 13.02 | % | 12.95 | % | ||
| (1) Capital ratios for September 30, 2021 are preliminary | ||||||||
CORPORATE UPDATE
Iowa First Bancshares Corp. Pending Acquisition
On November 1, 2021, the Company and IOFB, the holding company of First National Bank of Muscatine (“FNBM”) and First National Bank in Fairfield (“FNBF”), jointly announced the signing of a definitive agreement pursuant to which the Company will acquire IOFB, FNBM, and FNBF. The acquisition will add to the Company's existing presence in Fairfield, Iowa and will expand the Company's footprint into Muscatine, Iowa.
Share Repurchase Program
Under the current repurchase program, the Company repurchased 235,277 shares of its common stock at an average price of $29.24 per share and a total cost of $6.9 million in the third quarter of 2021. At September 30, 2021, the total amount available under the Company's current share repurchase program was $7.6 million.
Banking Office Consolidation
Effective January 27, 2022, the Company plans to consolidate its 32nd Street banking office into the nearby Main Street banking office in Dubuque, Iowa. This banking office consolidation is part of the Company's strategy to improve operating efficiency. The Company estimates the banking office consolidation will reduce its annual operating expenses by approximately $309 thousand.
Wealth Management Update
Subsequent to September 30, 2021, the Company strengthened its wealth management capabilities with the addition of an experienced wealth management team in Eastern Iowa. The team collectively has more than 120 years of experience providing wealth management services to clients and is led by an experienced wealth professional with a focus on planning services who was most recently with a super-regional bank. The team is a strong cultural fit and strategically aligns with our measured pursuit of growth in noninterest income streams.
CONFERENCE CALL DETAILS
The Company will host a conference call for investors at 11:00 a.m. CT on Tuesday, November 2, 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 February 1, 2022, by calling 877-344-7529 and using the replay access code of 10159709. A transcript of the call will also be available on the Company’s web site (www.midwestonefinancial.com) within three business days of the call.
ABOUT MIDWESTONE FINANCIAL GROUP, INC.
MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWestOne is the parent company of MidWestOne Bank, which operates banking offices in Iowa, Minnesota, Wisconsin, Florida, and Colorado. MidWestOne provides electronic delivery of financial services through its website, MidWestOne.bank. MidWestOne Financial Group, Inc. trades on the Nasdaq Global Select Market under the symbol “MOFG”.
Cautionary Note Regarding Forward-Looking Statements
This release contains certain “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We and our representatives may, from time to time, make written or oral statements that are “forward-looking” and provide information other than historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. These factors include, among other things, the factors listed below. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “should,” “could,” “would,” “plans,” “goals,” “intend,” “project,” “estimate,” “forecast,” “may” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Additionally, we undertake no obligation to update any statement in light of new information or future events, except as required under federal securities law.
Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have an impact on our ability to achieve operating results, growth plan goals and future prospects include, but are not limited to, the following: (1) effects of the COVID-19 pandemic, including its effects on the economic environment, our customers and our operations, including due to supply chain disruptions, 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; (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) the risks of mergers (including with IOFB), including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; (5) 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; (6) the effects of interest rates, including on our net income and the value of our securities portfolio; (7) 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; (8) fluctuations in the value of our investment securities; (9) governmental monetary and fiscal policies; (10) changes in and uncertainty related to benchmark interest rates used to price loans and deposits, including the expected elimination of LIBOR and the adoption of a substitute; (11) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators; (12) the ability to attract and retain key executives and employees experienced in banking and financial services; (13) the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio; (14) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (15) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (16) 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; (17) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (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
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| (In thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Cash and due from banks | $ | 53,562 | $ | 52,297 | $ | 57,154 | $ | 65,078 | $ | 71,901 | ||||||||||||||
| Interest earning deposits in banks | 84,952 | 11,124 | 80,924 | 17,409 | 55,421 | |||||||||||||||||||
| Federal funds sold | — | 13 | 7,691 | 172 | 7,540 | |||||||||||||||||||
| Total cash and cash equivalents | 138,514 | 63,434 | 145,769 | 82,659 | 134,862 | |||||||||||||||||||
| Debt securities available for sale at fair value | 2,136,902 | 2,072,452 | 1,896,894 | 1,657,381 | 1,366,344 | |||||||||||||||||||
| Loans held for sale | 58,679 | 6,149 | 58,333 | 59,956 | 13,096 | |||||||||||||||||||
| Gross loans held for investment | 3,278,150 | 3,344,156 | 3,374,076 | 3,496,790 | 3,555,969 | |||||||||||||||||||
| Unearned income, net | (9,506 | ) | (14,000 | ) | (15,915 | ) | (14,567 | ) | (18,537 | ) | ||||||||||||||
| Loans held for investment, net of unearned income | 3,268,644 | 3,330,156 | 3,358,161 | 3,482,223 | 3,537,432 | |||||||||||||||||||
| Allowance for credit losses | (47,900 | ) | (48,000 | ) | (50,650 | ) | (55,500 | ) | (58,500 | ) | ||||||||||||||
| Total loans held for investment, net | 3,220,744 | 3,282,156 | 3,307,511 | 3,426,723 | 3,478,932 | |||||||||||||||||||
| Premises and equipment, net | 84,130 | 84,667 | 85,581 | 86,401 | 87,955 | |||||||||||||||||||
| Goodwill | 62,477 | 62,477 | 62,477 | 62,477 | 62,477 | |||||||||||||||||||
| Other intangible assets, net | 21,130 | 22,394 | 23,735 | 25,242 | 26,811 | |||||||||||||||||||
| Foreclosed assets, net | 454 | 755 | 1,487 | 2,316 | 724 | |||||||||||||||||||
| Other assets | 152,393 | 154,731 | 155,525 | 153,493 | 159,507 | |||||||||||||||||||
| Total assets | $ | 5,875,423 | $ | 5,749,215 | $ | 5,737,312 | $ | 5,556,648 | $ | 5,330,708 | ||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||
| Noninterest bearing deposits | $ | 999,887 | $ | 952,764 | $ | 958,526 | $ | 910,655 | $ | 864,504 | ||||||||||||||
| Interest bearing deposits | 3,957,894 | 3,839,902 | 3,836,037 | 3,636,394 | 3,469,137 | |||||||||||||||||||
| Total deposits | 4,957,781 | 4,792,666 | 4,794,563 | 4,547,049 | 4,333,641 | |||||||||||||||||||
| Short-term borrowings | 187,508 | 212,261 | 175,785 | 230,789 | 183,893 | |||||||||||||||||||
| Long-term debt | 154,860 | 169,839 | 201,696 | 208,691 | 245,481 | |||||||||||||||||||
| Other liabilities | 45,010 | 44,156 | 53,948 | 54,869 | 68,612 | |||||||||||||||||||
| Total liabilities | 5,345,159 | 5,218,922 | 5,225,992 | 5,041,398 | 4,831,627 | |||||||||||||||||||
| SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||
| Common stock | 16,581 | 16,581 | 16,581 | 16,581 | 16,581 | |||||||||||||||||||
| Additional paid-in capital | 300,327 | 299,888 | 299,747 | 300,137 | 299,939 | |||||||||||||||||||
| Retained earnings | 232,639 | 219,884 | 206,230 | 188,191 | 175,017 | |||||||||||||||||||
| Treasury stock | (22,735 | ) | (15,888 | ) | (15,278 | ) | (14,251 | ) | (12,272 | ) | ||||||||||||||
| Accumulated other comprehensive income | 3,452 | 9,828 | 4,040 | 24,592 | 19,816 | |||||||||||||||||||
| Total shareholders' equity | 530,264 | 530,293 | 511,320 | 515,250 | 499,081 | |||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 5,875,423 | $ | 5,749,215 | $ | 5,737,312 | $ | 5,556,648 | $ | 5,330,708 | ||||||||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER AND YEAR TO DATE CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | |||||||||||||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||||
| Loans, including fees | $ | 36,115 | $ | 34,736 | $ | 36,542 | $ | 38,239 | $ | 38,191 | $ | 107,393 | $ | 120,417 | ||||||||||||||||||||
| Taxable investment securities | 6,655 | 6,483 | 5,093 | 4,673 | 4,574 | 18,231 | 12,937 | |||||||||||||||||||||||||||
| Tax-exempt investment securities | 2,428 | 2,549 | 2,555 | 2,529 | 2,360 | 7,532 | 5,730 | |||||||||||||||||||||||||||
| Other | 21 | 19 | 14 | 29 | 29 | 54 | 233 | |||||||||||||||||||||||||||
| Total interest income | 45,219 | 43,787 | 44,204 | 45,470 | 45,154 | 133,210 | 139,317 | |||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||||
| Deposits | 3,150 | 3,409 | 3,608 | 4,265 | 5,296 | 10,167 | 19,654 | |||||||||||||||||||||||||||
| Short-term borrowings | 132 | 161 | 128 | 142 | 175 | 421 | 772 | |||||||||||||||||||||||||||
| Long-term debt | 1,597 | 1,712 | 1,851 | 2,026 | 1,874 | 5,160 | 4,964 | |||||||||||||||||||||||||||
| Total interest expense | 4,879 | 5,282 | 5,587 | 6,433 | 7,345 | 15,748 | 25,390 | |||||||||||||||||||||||||||
| Net interest income | 40,340 | 38,505 | 38,617 | 39,037 | 37,809 | 117,462 | 113,927 | |||||||||||||||||||||||||||
| Credit loss (benefit) expense | (1,080 | ) | (2,144 | ) | (4,734 | ) | (3,041 | ) | 4,992 | (7,958 | ) | 31,410 | ||||||||||||||||||||||
| Net interest income after credit loss (benefit) expense | 41,420 | 40,649 | 43,351 | 42,078 | 32,817 | 125,420 | 82,517 | |||||||||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||||||||||
| Investment services and trust activities | 2,915 | 2,809 | 2,836 | 2,518 | 2,361 | 8,560 | 7,114 | |||||||||||||||||||||||||||
| Service charges and fees | 1,613 | 1,475 | 1,487 | 1,571 | 1,491 | 4,575 | 4,607 | |||||||||||||||||||||||||||
| Card revenue | 1,820 | 1,913 | 1,536 | 1,517 | 1,600 | 5,269 | 4,202 | |||||||||||||||||||||||||||
| Loan revenue | 1,935 | 3,151 | 4,730 | 3,900 | 3,252 | 9,816 | 6,285 | |||||||||||||||||||||||||||
| Bank-owned life insurance | 532 | 538 | 542 | 541 | 530 | 1,612 | 1,685 | |||||||||||||||||||||||||||
| Investment securities gains, net | 36 | 42 | 27 | 30 | 106 | 105 | 154 | |||||||||||||||||||||||||||
| Other | 331 | 290 | 666 | 549 | 230 | 1,287 | 3,947 | |||||||||||||||||||||||||||
| Total noninterest income | 9,182 | 10,218 | 11,824 | 10,626 | 9,570 | 31,224 | 27,994 | |||||||||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||||||||||
| Compensation and employee benefits | 17,350 | 17,404 | 16,917 | 17,638 | 16,460 | 51,671 | 48,759 | |||||||||||||||||||||||||||
| Occupancy expense of premises, net | 2,547 | 2,198 | 2,318 | 2,476 | 2,278 | 7,063 | 6,872 | |||||||||||||||||||||||||||
| Equipment | 1,973 | 1,861 | 1,793 | 2,040 | 1,935 | 5,627 | 5,825 | |||||||||||||||||||||||||||
| Legal and professional | 1,272 | 1,375 | 783 | 2,052 | 1,184 | 3,430 | 4,101 | |||||||||||||||||||||||||||
| Data processing | 1,406 | 1,347 | 1,252 | 1,460 | 1,308 | 4,005 | 3,902 | |||||||||||||||||||||||||||
| Marketing | 1,022 | 873 | 1,006 | 986 | 857 | 2,901 | 2,829 | |||||||||||||||||||||||||||
| Amortization of intangibles | 1,264 | 1,341 | 1,507 | 1,569 | 1,631 | 4,112 | 5,407 | |||||||||||||||||||||||||||
| FDIC insurance | 435 | 245 | 512 | 495 | 470 | 1,192 | 1,363 | |||||||||||||||||||||||||||
| Communications | 275 | 371 | 409 | 412 | 428 | 1,055 | 1,334 | |||||||||||||||||||||||||||
| Foreclosed assets, net | 43 | 136 | 47 | (35 | ) | 13 | 226 | 185 | ||||||||||||||||||||||||||
| Goodwill impairment | — | — | — | — | 31,500 | — | 31,500 | |||||||||||||||||||||||||||
| Other | 2,191 | 1,519 | 1,156 | 2,822 | 1,875 | 4,866 | 5,901 | |||||||||||||||||||||||||||
| Total noninterest expense | 29,778 | 28,670 | 27,700 | 31,915 | 59,939 | 86,148 | 117,978 | |||||||||||||||||||||||||||
| Income (loss) before income tax expense | 20,824 | 22,197 | 27,475 | 20,789 | (17,552 | ) | 70,496 | (7,467 | ) | |||||||||||||||||||||||||
| Income tax expense | 4,513 | 4,926 | 5,827 | 4,079 | 2,272 | 15,266 | 2,620 | |||||||||||||||||||||||||||
| Net income (loss) | $ | 16,311 | $ | 17,271 | $ | 21,648 | $ | 16,710 | $ | (19,824 | ) | $ | 55,230 | $ | (10,087 | ) | ||||||||||||||||||
| Earnings (loss) per common share | ||||||||||||||||||||||||||||||||||
| Basic | $ | 1.03 | $ | 1.08 | $ | 1.35 | $ | 1.04 | $ | (1.23 | ) | $ | 3.47 | $ | (0.63 | ) | ||||||||||||||||||
| Diluted | $ | 1.03 | $ | 1.08 | $ | 1.35 | $ | 1.04 | $ | (1.23 | ) | $ | 3.46 | $ | (0.63 | ) | ||||||||||||||||||
| Weighted average basic common shares outstanding | 15,841 | 15,987 | 15,991 | 16,074 | 16,099 | 15,939 | 16,112 | |||||||||||||||||||||||||||
| Weighted average diluted common shares outstanding | 15,863 | 16,012 | 16,021 | 16,092 | 16,099 | 15,963 | 16,112 | |||||||||||||||||||||||||||
| Dividends paid per common share | $ | 0.2250 | $ | 0.2250 | $ | 0.2250 | $ | 0.2200 | $ | 0.2200 | $ | 0.6750 | $ | 0.6600 | ||||||||||||||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL STATISTICS
| As of or for the Three Months Ended | As of or for the Nine Months Ended | |||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
| 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Earnings: | ||||||||||||||||||||||||
| Net interest income | $ | 40,340 | $ | 38,505 | $ | 37,809 | $ | 117,462 | $ | 113,927 | ||||||||||||||
| Noninterest income | 9,182 | 10,218 | 9,570 | 31,224 | 27,994 | |||||||||||||||||||
| Total revenue, net of interest expense | 49,522 | 48,723 | 47,379 | 148,686 | 141,921 | |||||||||||||||||||
| Credit loss (benefit) expense | (1,080 | ) | (2,144 | ) | 4,992 | (7,958 | ) | 31,410 | ||||||||||||||||
| Noninterest expense | 29,778 | 28,670 | 59,939 | 86,148 | 117,978 | |||||||||||||||||||
| Income (loss) before income tax expense | 20,824 | 22,197 | (17,552 | ) | 70,496 | (7,467 | ) | |||||||||||||||||
| Income tax expense | 4,513 | 4,926 | 2,272 | 15,266 | 2,620 | |||||||||||||||||||
| Net income (loss) | $ | 16,311 | $ | 17,271 | $ | (19,824 | ) | $ | 55,230 | $ | (10,087 | ) | ||||||||||||
| Per Share Data: | ||||||||||||||||||||||||
| Diluted earnings (loss) | $ | 1.03 | $ | 1.08 | $ | (1.23 | ) | $ | 3.46 | $ | (0.63 | ) | ||||||||||||
| Book value | 33.71 | 33.22 | 31.00 | 33.71 | 31.00 | |||||||||||||||||||
| Tangible book value(1) | 28.40 | 27.90 | 25.45 | 28.40 | 25.45 | |||||||||||||||||||
| Ending Balance Sheet: | ||||||||||||||||||||||||
| Total assets | $ | 5,875,423 | $ | 5,749,215 | $ | 5,330,708 | $ | 5,875,423 | $ | 5,330,708 | ||||||||||||||
| Loans held for investment, net of unearned income | 3,268,644 | 3,330,156 | 3,537,432 | 3,268,644 | 3,537,432 | |||||||||||||||||||
| Total securities held for investment | 2,136,902 | 2,072,452 | 1,366,344 | 2,136,902 | 1,366,344 | |||||||||||||||||||
| Total deposits | 4,957,781 | 4,792,666 | 4,333,641 | 4,957,781 | 4,333,641 | |||||||||||||||||||
| Short-term borrowings | 187,508 | 212,261 | 183,893 | 187,508 | 183,893 | |||||||||||||||||||
| Long-term debt | 154,860 | 169,839 | 245,481 | 154,860 | 245,481 | |||||||||||||||||||
| Total shareholders' equity | 530,264 | 530,293 | 499,081 | 530,264 | 499,081 | |||||||||||||||||||
| Average Balance Sheet: | ||||||||||||||||||||||||
| Average total assets | $ | 5,811,228 | $ | 5,851,736 | $ | 5,311,386 | $ | 5,728,822 | $ | 5,027,692 | ||||||||||||||
| Average total loans | 3,356,680 | 3,396,575 | 3,576,642 | 3,394,066 | 3,548,968 | |||||||||||||||||||
| Average total deposits | 4,882,835 | 4,875,324 | 4,317,172 | 4,778,484 | 4,081,782 | |||||||||||||||||||
| Financial Ratios: | ||||||||||||||||||||||||
| Return on average assets | 1.11 | % | 1.18 | % | (1.48 | ) | % | 1.29 | % | (0.27 | ) | % | ||||||||||||
| Return on average equity | 12.00 | % | 13.24 | % | (14.88 | ) | % | 14.03 | % | (2.60 | ) | % | ||||||||||||
| Return on average tangible equity(1) | 15.06 | % | 16.75 | % | 12.56 | % | 17.69 | % | 8.58 | % | ||||||||||||||
| Efficiency ratio(1) | 56.34 | % | 54.83 | % | 55.37 | % | 53.95 | % | 55.95 | % | ||||||||||||||
| Net interest margin, tax equivalent(1) | 3.00 | % | 2.88 | % | 3.14 | % | 2.99 | % | 3.36 | % | ||||||||||||||
| Loans to deposits ratio | 65.93 | % | 69.48 | % | 81.63 | % | 65.93 | % | 81.63 | % | ||||||||||||||
| Common equity ratio | 9.03 | % | 9.22 | % | 9.36 | % | 9.03 | % | 9.36 | % | ||||||||||||||
| Tangible common equity ratio(1) | 7.71 | % | 7.86 | % | 7.82 | % | 7.71 | % | 7.82 | % | ||||||||||||||
| Credit Risk Profile: | ||||||||||||||||||||||||
| Total nonperforming loans | $ | 33,708 | $ | 41,429 | $ | 41,664 | $ | 33,708 | $ | 41,664 | ||||||||||||||
| Nonperforming loans ratio | 1.03 | % | 1.24 | % | 1.18 | % | 1.03 | % | 1.18 | % | ||||||||||||||
| Total nonperforming assets | $ | 34,162 | $ | 42,184 | $ | 42,388 | $ | 34,162 | $ | 42,388 | ||||||||||||||
| Nonperforming assets ratio | 0.58 | % | 0.73 | % | 0.80 | % | 0.58 | % | 0.80 | % | ||||||||||||||
| Net (recoveries) charge-offs | $ | (880 | ) | $ | 406 | $ | 1,841 | $ | (158 | ) | $ | 4,906 | ||||||||||||
| Net (recovery) charge-off ratio | (0.10 | ) | % | 0.05 | % | 0.20 | % | (0.01 | ) | % | 0.18 | % | ||||||||||||
| Allowance for credit losses | $ | 47,900 | $ | 48,000 | $ | 58,500 | $ | 47,900 | $ | 58,500 | ||||||||||||||
| Allowance for credit losses ratio | 1.47 | % | 1.44 | % | 1.65 | % | 1.47 | % | 1.65 | % | ||||||||||||||
| Adjusted allowance for credit losses ratio(1) | 1.51 | % | 1.53 | % | 1.82 | % | 1.51 | % | 1.82 | % | ||||||||||||||
| PPP Loans: | ||||||||||||||||||||||||
| Average PPP loans | $ | 143,628 | $ | 233,982 | $ | 330,969 | $ | 160,708 | $ | 146,607 | ||||||||||||||
| Fee Income | 3,593 | 2,469 | 1,312 | 9,735 | 2,374 | |||||||||||||||||||
| (1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. | ||||||||||||||||||||||||
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
| Three Months Ended | ||||||||||||||||||||||||||||||||
| September 30, 2021 | June 30, 2021 | September 30, 2020 | ||||||||||||||||||||||||||||||
| (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) | $ | 3,356,680 | $ | 36,622 | 4.33 | % | $ | 3,396,575 | $ | 35,255 | 4.16 | % | $ | 3,576,642 | $ | 38,727 | 4.31 | % | ||||||||||||||
| Taxable investment securities | 1,628,605 | 6,655 | 1.62 | % | 1,604,463 | 6,483 | 1.62 | % | 864,864 | 4,574 | 2.10 | % | ||||||||||||||||||||
| Tax-exempt investment securities (2)(4) | 459,717 | 3,043 | 2.63 | % | 473,181 | 3,196 | 2.71 | % | 405,517 | 2,968 | 2.91 | % | ||||||||||||||||||||
| Total securities held for investment(2) | 2,088,322 | 9,698 | 1.84 | % | 2,077,644 | 9,679 | 1.87 | % | 1,270,381 | 7,542 | 2.36 | % | ||||||||||||||||||||
| Other | 44,915 | 21 | 0.19 | % | 48,208 | 19 | 0.16 | % | 88,152 | 29 | 0.13 | % | ||||||||||||||||||||
| Total interest earning assets(2) | $ | 5,489,917 | 46,341 | 3.35 | % | $ | 5,522,427 | 44,953 | 3.26 | % | $ | 4,935,175 | 46,298 | 3.73 | % | |||||||||||||||||
| Other assets | 321,311 | 329,309 | 376,211 | |||||||||||||||||||||||||||||
| Total assets | $ | 5,811,228 | $ | 5,851,736 | $ | 5,311,386 | ||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||
| Interest checking deposits | $ | 1,434,560 | $ | 1,056 | 0.29 | % | $ | 1,469,853 | $ | 1,095 | 0.30 | % | $ | 1,174,033 | $ | 1,049 | 0.36 | % | ||||||||||||||
| Money market deposits | 955,174 | 506 | 0.21 | % | 942,072 | 502 | 0.21 | % | 847,059 | 622 | 0.29 | % | ||||||||||||||||||||
| Savings deposits | 606,449 | 316 | 0.21 | % | 595,150 | 324 | 0.22 | % | 473,000 | 351 | 0.30 | % | ||||||||||||||||||||
| Time deposits | 890,866 | 1,272 | 0.57 | % | 896,169 | 1,488 | 0.67 | % | 931,655 | 3,274 | 1.40 | % | ||||||||||||||||||||
| Total interest bearing deposits | 3,887,049 | 3,150 | 0.32 | % | 3,903,244 | 3,409 | 0.35 | % | 3,425,747 | 5,296 | 0.62 | % | ||||||||||||||||||||
| Short-term borrowings | 182,484 | 132 | 0.29 | % | 218,491 | 161 | 0.30 | % | 165,840 | 175 | 0.42 | % | ||||||||||||||||||||
| Long-term debt | 163,817 | 1,597 | 3.87 | % | 189,644 | 1,712 | 3.62 | % | 231,406 | 1,874 | 3.22 | % | ||||||||||||||||||||
| Total borrowed funds | 346,301 | 1,729 | 1.98 | % | 408,135 | 1,873 | 1.84 | % | 397,246 | 2,049 | 2.05 | % | ||||||||||||||||||||
| Total interest bearing liabilities | $ | 4,233,350 | $ | 4,879 | 0.46 | % | $ | 4,311,379 | $ | 5,282 | 0.49 | % | $ | 3,822,993 | $ | 7,345 | 0.76 | % | ||||||||||||||
| Noninterest bearing deposits | 995,786 | 972,080 | 891,425 | |||||||||||||||||||||||||||||
| Other liabilities | 43,040 | 45,035 | 67,111 | |||||||||||||||||||||||||||||
| Shareholders’ equity | 539,052 | 523,242 | 529,857 | |||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,811,228 | $ | 5,851,736 | $ | 5,311,386 | ||||||||||||||||||||||||||
| Net interest income(2) | $ | 41,462 | $ | 39,671 | $ | 38,953 | ||||||||||||||||||||||||||
| Net interest spread(2) | 2.89 | % | 2.77 | % | 2.97 | % | ||||||||||||||||||||||||||
| Net interest margin(2) | 3.00 | % | 2.88 | % | 3.14 | % | ||||||||||||||||||||||||||
| Total deposits(5) | $ | 4,882,835 | $ | 3,150 | 0.26 | % | $ | 4,875,324 | $ | 3,409 | 0.28 | % | $ | 4,317,172 | $ | 5,296 | 0.49 | % | ||||||||||||||
| Cost of funds(6) | 0.37 | % | 0.40 | % | 0.62 | % | ||||||||||||||||||||||||||
(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 $3.5 million, $2.3 million, and $1.1 million for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively. Loan purchase discount accretion was $774 thousand, $873 thousand, and $1.9 million for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively. Tax equivalent adjustments were $507 thousand, $519 thousand, and $536 thousand for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $615 thousand, $647 thousand, and $608 thousand for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020, 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.
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
| Nine Months Ended | |||||||||||||||||||||
| September 30, 2021 | September 30, 2020 | ||||||||||||||||||||
| (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) | $ | 3,394,066 | $ | 108,950 | 4.29 | % | $ | 3,548,968 | $ | 121,957 | 4.59 | % | |||||||||
| Taxable investment securities | 1,501,252 | 18,231 | 1.62 | % | 721,266 | 12,937 | 2.40 | % | |||||||||||||
| Tax-exempt investment securities (2)(4) | 466,209 | 9,442 | 2.71 | % | 305,514 | 7,215 | 3.15 | % | |||||||||||||
| Total securities held for investment(2) | 1,967,461 | 27,673 | 1.88 | % | 1,026,780 | 20,152 | 2.62 | % | |||||||||||||
| Other | 43,250 | 54 | 0.17 | % | 70,983 | 233 | 0.44 | % | |||||||||||||
| Total interest earning assets(2) | $ | 5,404,777 | 136,677 | 3.38 | % | $ | 4,646,731 | 142,342 | 4.09 | % | |||||||||||
| Other assets | 324,045 | 380,961 | |||||||||||||||||||
| Total assets | $ | 5,728,822 | $ | 5,027,692 | |||||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||
| Interest checking deposits | $ | 1,418,339 | $ | 3,142 | 0.30 | % | $ | 1,052,816 | $ | 3,477 | 0.44 | % | |||||||||
| Money market deposits | 936,932 | 1,486 | 0.21 | % | 814,669 | 3,152 | 0.52 | % | |||||||||||||
| Savings deposits | 585,334 | 926 | 0.21 | % | 435,612 | 1,107 | 0.34 | % | |||||||||||||
| Time deposits | 875,027 | 4,613 | 0.70 | % | 973,044 | 11,918 | 1.64 | % | |||||||||||||
| Total interest bearing deposits | 3,815,632 | 10,167 | 0.36 | % | 3,276,141 | 19,654 | 0.80 | % | |||||||||||||
| Short-term borrowings | 192,083 | 421 | 0.29 | % | 149,041 | 772 | 0.69 | % | |||||||||||||
| Long-term debt | 186,323 | 5,160 | 3.70 | % | 219,455 | 4,964 | 3.02 | % | |||||||||||||
| Total borrowed funds | 378,406 | 5,581 | 1.97 | % | 368,496 | 5,736 | 2.08 | % | |||||||||||||
| Total interest bearing liabilities | $ | 4,194,038 | $ | 15,748 | 0.50 | % | $ | 3,644,637 | $ | 25,390 | 0.93 | % | |||||||||
| Noninterest bearing deposits | 962,852 | 805,641 | |||||||||||||||||||
| Other liabilities | 45,671 | 58,618 | |||||||||||||||||||
| Shareholders’ equity | 526,261 | 518,796 | |||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,728,822 | $ | 5,027,692 | |||||||||||||||||
| Net interest income(2) | $ | 120,929 | $ | 116,952 | |||||||||||||||||
| Net interest spread(2) | 2.88 | % | 3.16 | % | |||||||||||||||||
| Net interest margin(2) | 2.99 | % | 3.36 | % | |||||||||||||||||
| Total deposits(5) | $ | 4,778,484 | $ | 10,167 | 0.28 | % | $ | 4,081,782 | $ | 19,654 | 0.64 | % | |||||||||
| Cost of funds(6) | 0.41 | % | 0.76 | % | |||||||||||||||||
(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 $9.3 million and $1.8 million for the nine months ended September 30, 2021 and September 30, 2020, respectively. Loan purchase discount accretion was $2.7 million and $7.6 million for the nine months ended September 30, 2021 and September 30, 2020, respectively. Tax equivalent adjustments were $1.6 million and $1.5 million for the nine months ended September 30, 2021 and September 30, 2020, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $1.9 million and $1.5 million for the nine months ended September 30, 2021 and September 30, 2020, 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), core yield on loans, efficiency ratio, 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 | |||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||||||||
| Total shareholders’ equity | $ | 530,264 | $ | 530,293 | $ | 511,320 | $ | 515,250 | $ | 499,081 | |||||||||||||||
| Intangible assets, net | (83,607 | ) | (84,871 | ) | (86,212 | ) | (87,719 | ) | (89,288 | ) | |||||||||||||||
| Tangible common equity | $ | 446,657 | $ | 445,422 | $ | 425,108 | $ | 427,531 | $ | 409,793 | |||||||||||||||
| Total assets | $ | 5,875,423 | $ | 5,749,215 | $ | 5,737,312 | $ | 5,556,648 | $ | 5,330,708 | |||||||||||||||
| Intangible assets, net | (83,607 | ) | (84,871 | ) | (86,212 | ) | (87,719 | ) | (89,288 | ) | |||||||||||||||
| Tangible assets | $ | 5,791,816 | $ | 5,664,344 | $ | 5,651,100 | $ | 5,468,929 | $ | 5,241,420 | |||||||||||||||
| Book value per share | $ | 33.71 | $ | 33.22 | $ | 32.00 | $ | 32.17 | $ | 31.00 | |||||||||||||||
| Tangible book value per share(1) | $ | 28.40 | $ | 27.90 | $ | 26.60 | $ | 26.69 | $ | 25.45 | |||||||||||||||
| Shares outstanding | 15,729,451 | 15,963,468 | 15,981,088 | 16,016,780 | 16,099,324 | ||||||||||||||||||||
| Common equity ratio | 9.03 | % | 9.22 | % | 8.91 | % | 9.27 | % | 9.36 | % | |||||||||||||||
| Tangible common equity ratio(2) | 7.71 | % | 7.86 | % | 7.52 | % | 7.82 | % | 7.82 | % | |||||||||||||||
(1) Tangible common equity divided by shares outstanding.
(2) Tangible common equity divided by tangible assets.
| Return on Average Tangible Equity | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||
| (Dollars in thousands) | 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net income (loss) | $ | 16,311 | $ | 17,271 | $ | (19,824 | ) | $ | 55,230 | $ | (10,087 | ) | |||||||||||||
| Intangible amortization, net of tax(1) | 948 | 1,006 | 1,223 | 3,084 | 4,055 | ||||||||||||||||||||
| Goodwill impairment | — | — | 31,500 | — | 31,500 | ||||||||||||||||||||
| Tangible net income | $ | 17,259 | $ | 18,277 | $ | 12,899 | $ | 58,314 | $ | 25,468 | |||||||||||||||
| Average shareholders’ equity | $ | 539,052 | $ | 523,242 | $ | 529,857 | $ | 526,261 | $ | 518,796 | |||||||||||||||
| Average intangible assets, net | (84,288 | ) | (85,518 | ) | (121,306 | ) | (85,579 | ) | (122,518 | ) | |||||||||||||||
| Average tangible equity | $ | 454,764 | $ | 437,724 | $ | 408,551 | $ | 440,682 | $ | 396,278 | |||||||||||||||
| Return on average equity | 12.00 | % | 13.24 | % | (14.88 | ) | % | 14.03 | % | (2.60 | ) | % | |||||||||||||
| Return on average tangible equity(2) | 15.06 | % | 16.75 | % | 12.56 | % | 17.69 | % | 8.58 | % | |||||||||||||||
(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 | Nine Months Ended | |||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||
| (Dollars in thousands) | 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net interest income | $ | 40,340 | $ | 38,505 | $ | 37,809 | $ | 117,462 | $ | 113,927 | |||||||||||||||
| Tax equivalent adjustments: | |||||||||||||||||||||||||
| Loans(1) | 507 | 519 | 536 | 1,557 | 1,540 | ||||||||||||||||||||
| Securities(1) | 615 | 647 | 608 | 1,910 | 1,485 | ||||||||||||||||||||
| Net interest income, tax equivalent | $ | 41,462 | $ | 39,671 | $ | 38,953 | $ | 120,929 | $ | 116,952 | |||||||||||||||
| Loan purchase discount accretion | (774 | ) | (873 | ) | (1,923 | ) | (2,745 | ) | (7,556 | ) | |||||||||||||||
| Core net interest income | $ | 40,688 | $ | 38,798 | $ | 37,030 | $ | 118,184 | $ | 109,396 | |||||||||||||||
| Net interest margin | 2.92 | % | 2.80 | % | 3.05 | % | 2.91 | % | 3.27 | % | |||||||||||||||
| Net interest margin, tax equivalent(2) | 3.00 | % | 2.88 | % | 3.14 | % | 2.99 | % | 3.36 | % | |||||||||||||||
| Core net interest margin(3) | 2.94 | % | 2.82 | % | 2.99 | % | 2.92 | % | 3.14 | % | |||||||||||||||
| Average interest earning assets | $ | 5,489,917 | $ | 5,522,427 | $ | 4,935,175 | $ | 5,404,777 | $ | 4,646,731 | |||||||||||||||
(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.
| Loan Yield, Tax Equivalent / Core Yield on Loans | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||
| (Dollars in thousands) | 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Loan interest income, including fees | $ | 36,115 | $ | 34,736 | $ | 38,191 | $ | 107,393 | $ | 120,417 | |||||||||||||||
| Tax equivalent adjustment(1) | 507 | 519 | 536 | 1,557 | 1,540 | ||||||||||||||||||||
| Tax equivalent loan interest income | $ | 36,622 | $ | 35,255 | $ | 38,727 | $ | 108,950 | $ | 121,957 | |||||||||||||||
| Loan purchase discount accretion | (774 | ) | (873 | ) | (1,923 | ) | (2,745 | ) | (7,556 | ) | |||||||||||||||
| Core loan interest income | $ | 35,848 | $ | 34,382 | $ | 36,804 | $ | 106,205 | $ | 114,401 | |||||||||||||||
| Yield on loans | 4.27 | % | 4.10 | % | 4.25 | % | 4.23 | % | 4.53 | % | |||||||||||||||
| Yield on loans, tax equivalent(2) | 4.33 | % | 4.16 | % | 4.31 | % | 4.29 | % | 4.59 | % | |||||||||||||||
| Core yield on loans(3) | 4.24 | % | 4.06 | % | 4.09 | % | 4.18 | % | 4.31 | % | |||||||||||||||
| Average loans | $ | 3,356,680 | $ | 3,396,575 | $ | 3,576,642 | $ | 3,394,066 | $ | 3,548,968 | |||||||||||||||
(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 | Nine Months Ended | ||||||||||||||||||||||||
| Efficiency Ratio | September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||||||
| (Dollars in thousands) | 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Total noninterest expense | $ | 29,778 | $ | 28,670 | $ | 59,939 | $ | 86,148 | $ | 117,978 | |||||||||||||||
| Amortization of intangibles | (1,264 | ) | (1,341 | ) | (1,631 | ) | (4,112 | ) | (5,407 | ) | |||||||||||||||
| Merger-related expenses | — | — | — | — | (61 | ) | |||||||||||||||||||
| Goodwill impairment | — | — | (31,500 | ) | — | (31,500 | ) | ||||||||||||||||||
| Noninterest expense used for efficiency ratio | $ | 28,514 | $ | 27,329 | $ | 26,808 | $ | 82,036 | $ | 81,010 | |||||||||||||||
| Net interest income, tax equivalent(1) | $ | 41,462 | $ | 39,671 | $ | 38,953 | $ | 120,929 | $ | 116,952 | |||||||||||||||
| Noninterest income | 9,182 | 10,218 | 9,570 | 31,224 | 27,994 | ||||||||||||||||||||
| Investment securities gains, net | (36 | ) | (42 | ) | (106 | ) | (105 | ) | (154 | ) | |||||||||||||||
| Net revenues used for efficiency ratio | $ | 50,608 | $ | 49,847 | $ | 48,417 | $ | 152,048 | $ | 144,792 | |||||||||||||||
| Efficiency ratio (2) | 56.34 | % | 54.83 | % | 55.37 | % | 53.95 | % | 55.95 | % | |||||||||||||||
(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.
| Adjusted Allowance for Credit Losses Ratio | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| (Dollars in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||||||
| Loans held for investment, net of unearned income | $ | 3,268,644 | $ | 3,330,156 | $ | 3,358,161 | $ | 3,482,223 | $ | 3,537,432 | |||||||||||||||
| PPP loans | (89,354 | ) | (184,390 | ) | (248,682 | ) | (259,260 | ) | (331,703 | ) | |||||||||||||||
| Core loans | $ | 3,179,290 | $ | 3,145,766 | $ | 3,109,479 | $ | 3,222,963 | $ | 3,205,729 | |||||||||||||||
| Allowance for credit losses | $ | 47,900 | $ | 48,000 | $ | 50,650 | $ | 55,500 | $ | 58,500 | |||||||||||||||
| Allowance for credit losses ratio | 1.47 | % | 1.44 | % | 1.51 | % | 1.59 | % | 1.65 | % | |||||||||||||||
| Adjusted allowance for credit losses ratio(1) | 1.51 | % | 1.53 | % | 1.63 | % | 1.72 | % | 1.82 | % | |||||||||||||||
(1) Allowance for credit losses divided by core loans.
| Core Loans/Core Commercial Loans | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| (Dollars in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | |||||||||||||||
| Commercial loans: | ||||||||||||||||||||
| Commercial and industrial | $ | 927,258 | $ | 982,092 | $ | 993,770 | $ | 1,055,488 | $ | 1,103,102 | ||||||||||
| Agricultural | 106,356 | 107,834 | 117,099 | 116,392 | 129,453 | |||||||||||||||
| Commercial real estate | 1,699,358 | 1,705,789 | 1,693,592 | 1,732,361 | 1,707,035 | |||||||||||||||
| Total commercial loans | $ | 2,732,972 | $ | 2,795,715 | $ | 2,804,461 | $ | 2,904,241 | $ | 2,939,590 | ||||||||||
| Consumer loans: | ||||||||||||||||||||
| Residential real estate | $ | 468,136 | $ | 468,581 | $ | 474,433 | $ | 499,106 | $ | 521,570 | ||||||||||
| Other consumer | 67,536 | 65,860 | 79,267 | 78,876 | 76,272 | |||||||||||||||
| Total consumer loans | $ | 535,672 | $ | 534,441 | $ | 553,700 | $ | 577,982 | $ | 597,842 | ||||||||||
| Loans held for investment, net of unearned income | $ | 3,268,644 | $ | 3,330,156 | $ | 3,358,161 | $ | 3,482,223 | $ | 3,537,432 | ||||||||||
| PPP loans | $ | 89,354 | $ | 184,390 | $ | 248,682 | $ | 259,260 | $ | 331,703 | ||||||||||
| Core loans(1) | $ | 3,179,290 | $ | 3,145,766 | $ | 3,109,479 | $ | 3,222,963 | $ | 3,205,729 | ||||||||||
| Core commercial loans(2) | $ | 2,643,618 | $ | 2,611,325 | $ | 2,555,779 | $ | 2,644,981 | $ | 2,607,887 | ||||||||||
(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.
| Contact: | |||
| Charles N. Funk | Barry S. Ray | ||
| Chief Executive Officer | Senior Executive Vice President and Chief Financial Officer | ||
| 319.356.5800 | 319.356.5800 | ||
