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MidWestOne Financial Group, Inc. Reports Results for the Fourth Quarter and Full Year of 2019

IOWA CITY, Iowa, Jan. 23, 2020 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq - MOFG) (“we”, “our”, or the "Company”) today reported net income for the fourth quarter of 2019 of $13.4 million, or $0.83 per diluted common share, compared to net income of $12.3 million, or $0.76 per diluted common share, for the third quarter of 2019 (the “linked quarter”). Net income for the full year 2019 was $43.6 million, or $2.93 per diluted common share, compared to net income for the full year 2018 of $30.4 million, or $2.48 per diluted common share. Pre-tax merger-related expenses were $3.3 million and $9.1 million for the fourth quarter and full year of 2019, respectively. Such expenses reduced diluted earnings per common share by $0.15 and $0.47 for the fourth quarter and full year of 2019, respectively.

Charles Funk, President and Chief Executive Officer, commented, “It was another very good quarter for MidWestOne and also the best full year earnings in our history. We continue to see the benefits of a relatively stable core net interest margin and good expense control. Our fourth quarter results produced a return on average assets of 1.14%, a return on average equity of 10.55%, and a return on average tangible equity of 15.60%.”

FINANCIAL HIGHLIGHTS

  As of or For the Three Months Ended   As of or For the Year Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
  2019   2019   2018   2019   2018
  (Dollars in thousands, except per share amounts)
Net income $ 13,371     $ 12,300     $ 7,624     $ 43,630     $ 30,351  
Earnings per common share, diluted $ 0.83     $ 0.76     $ 0.62     $ 2.93     $ 2.48  
Return on average assets 1.14 %   1.06 %   0.92 %   1.04 %   0.93 %
Return on average equity 10.55 %   9.92 %   8.61 %   9.65 %   8.78 %
Return on average tangible equity (1) 15.60 %   15.57 %   11.47 %   13.98 %   11.87 %
                   
Net interest margin, tax equivalent(1) 3.79 %   4.15 %   3.59 %   3.82 %   3.60 %
Yield on loans, tax equivalent(1) 5.16 %   5.59 %   4.85 %   5.22 %   4.77 %
Cost of total deposits 0.88 %   0.89 %   0.78 %   0.89 %   0.66 %
Efficiency ratio(1) 63.05 %   50.46 %   57.81 %   57.56 %   61.23 %
                   
Total assets $ 4,653,573     $ 4,648,287     $ 3,291,480     $ 4,653,573     $ 3,291,480  
Loans held for investment, net of unearned income $ 3,451,266     $ 3,524,728     $ 2,398,779     $ 3,451,266     $ 2,398,779  
Total deposits $ 3,728,655     $ 3,709,712     $ 2,612,929     $ 3,728,655     $ 2,612,929  
                   
Equity to assets ratio 10.94 %   10.71 %   10.85 %   10.94 %   10.85 %
Tangible common equity ratio(1) 8.48 %   8.21 %   8.78 %   8.48 %   8.78 %
Book value per share $ 31.49     $ 30.77     $ 29.32     $ 31.49     $ 29.32  
Tangible book value per share(1) $ 23.77     $ 22.93     $ 23.20     $ 23.77     $ 23.20  
Gross loans held for investment to deposit ratio 93.04 %   95.59 %   91.80 %   93.04 %   91.80 %
                   
(1) Non-GAAP measure. See pages 14-15 for a reconciliation to the most directly comparable GAAP measure.
 

Acquisition of ATBancorp

Our results of operations for the fourth quarter and full year of 2019 and our financial condition at December 31, 2019 were significantly impacted by the May 1, 2019 acquisition of ATBancorp. The table below summarizes the amounts recognized at the acquisition date for each major class of assets acquired and liabilities assumed:

  May 1, 2019
  (in thousands)
Merger consideration       $ 148,443  
Identifiable net assets acquired, at fair value            
Assets acquired            
Cash and due from banks $ 71,820        
Debt securities available for sale   99,056        
Loans   1,138,928        
Premises and equipment   18,327        
Core deposit intangible   23,539        
Customer relationship intangible   4,285        
Bank-owned life insurance   18,759        
Foreclosed assets   3,091        
Other assets   22,857        
Total assets acquired         1,400,662  
Liabilities assumed            
Deposits   1,079,094        
Short-term borrowings   100,761        
Long-term debt   71,234        
Other liabilities   29,544        
Total liabilities assumed         1,280,633  
Total identifiable net assets acquired, at fair value       $ 120,029  
Goodwill       $ 28,414  
             

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income decreased in the fourth quarter of 2019 to $39.6 million from $43.3 million in the linked quarter due primarily to lower loan purchase discount accretion in the current period. Discount accretion from acquired loans added $3.9 million to net interest income in the fourth quarter compared to $7.2 million in the linked quarter. Average earning assets were up slightly and reflected a mix shift between investment securities and loans.

The tax equivalent net interest margin decreased to 3.79% for the fourth quarter of 2019 from 4.15% in the linked quarter as lower loan yields, driven by lower loan purchase discount accretion, were only partially offset by lower  funding costs. The Company's core net interest margin, which excludes loan purchase discount accretion, compressed 6 basis points ("bps") from the linked quarter. Such compression reflected the negative impact to the Company's variable rate asset yields from the three cuts to the federal funds target rate in the latter half of 2019 coupled with the continued challenges posed by the shape of the yield curve. In addition, interest reversals related to nonaccrual loans accounted for 2 bps of the sequential decline in earning asset yields. Partially offsetting those factors was a 5 bps sequential decline in funding costs.

Mr. Funk continued, “Our 'core margin' this quarter was impacted by market rates, nonaccrual loan interest reversals and a shift in mix of loans and investment securities. We continue to be diligent in managing our funding costs consistent with changes in market rates to maintain our margin.”

Noninterest Income

Noninterest income for the fourth quarter of 2019 increased $1.0 million, or 13%, from the linked quarter. The increase was due primarily to increases in the 'Loan revenue' and ‘Other’ income line items. ‘Loan revenue’ in the linked quarter included a $657 thousand negative valuation adjustment to the Company’s mortgage servicing right whereas the fourth quarter adjustment was a favorable $272 thousand, a $929 thousand period-to-period change. The 'Other' line item reflected increased income from our commercial loan swap program. Partially offsetting these increases, ‘Card revenue’ declined $513 thousand due primarily to the recognition of rewards costs related to our credit card program.

“Both our trust and investment services groups recorded their best years ever in 2019 which was reflected in our financial results. Our mortgage group also finished the year strong and, finally, we were pleased by the success of our commercial bankers in selling our loan swap products,” said Mr. Funk.

The following table presents details of noninterest income for the periods indicated:

  Three Months Ended
  December 31,   September 30,   December 31,
Noninterest Income 2019   2019   2018
  (In thousands)
Investment services and trust activities $ 2,421      $ 2,339     $ 1,274  
Service charges and fees 2,072      2,068     1,556  
Card revenue 1,142      1,655     1,095  
Loan revenue 1,757      991     884  
Bank-owned life insurance 501      514     381  
Insurance commissions —          260  
Investment securities gains (losses), net 18      23     (4 )
Other 1,125      414     350  
Total noninterest income $ 9,036      $ 8,004     $ 5,796  
                       

Noninterest Expense

Noninterest expense for the fourth quarter of 2019 increased $5.0 million, or 16%, from the linked quarter due primarily to accounting for certain flow-through tax credit partnerships. Specifically, 'Other' noninterest expense in the fourth quarter reflected a write-down of approximately $3.9 million to the Company's investment in such partnerships. This write-down was wholly offset, however, by a benefit in income tax expense.

The following table presents details of noninterest expense for the periods indicated:

  Three Months Ended
  December 31,   September 30,   December 31,
Noninterest Expense 2019   2019   2018
  (In thousands)
Compensation and employee benefits $ 19,246     $ 17,426     $ 12,111  
Occupancy expense of premises, net 2,347     2,294     1,166  
Equipment 2,251     2,181     1,433  
Legal and professional 1,797     1,996     1,027  
Data processing 1,492     1,234     875  
Marketing 1,147     1,167     678  
Amortization of intangibles 1,941     2,583     503  
FDIC insurance (72 )   (42 )   429  
Communications 493     489     342  
Foreclosed assets, net 173     265     46  
Other 5,621     1,849     1,169  
Total noninterest expense $ 36,436     $ 31,442     $ 19,779  
                       

The following table presents details of merger-related costs for the periods indicated:

  Three Months Ended
  December 31,   September 30,   December 31,
Merger-related Expenses 2019   2019   2018
  (In thousands)
Compensation and employee benefits $ 2,854      $ 1,576     $  
Occupancy expense of premises, net 73      44      
Equipment 43      204     2  
Legal and professional 201      471     89  
Data processing 51      39     100  
Marketing     6      
Other 58      207     15  
Total merger-related costs $ 3,282      $ 2,547     $ 206  
                       

Income Taxes

The Company recognized a net income tax benefit of $1.8 million in the fourth quarter compared to an expense of $3.3 million in the linked quarter due primarily to the recognition of $4.0 million in renewable energy and historic tax credits in the fourth quarter. These credits reduced the Company's annual effective income tax rate for 2019 to 13.1%. Partially offsetting the earnings benefit from those tax credits was the aforementioned $3.9 million write-down of the related tax credit partnership investment during the fourth quarter.

BALANCE SHEET HIGHLIGHTS

Loans Held for Investment

Loans held for investment, net of unearned income, increased $1.05 billion, or 44%, to $3.45 billion from December 31, 2018, primarily due to the merger. Loans held for investment, net of unearned income, decreased $73.5 million, or 2%, from September 30, 2019. At December 31, 2019, commercial real estate loans comprised approximately 53% of the loan portfolio. Commercial and industrial loans was the next largest category at 24% of total loans, followed by residential real estate loans at 17%, agricultural loans at 4%, and consumer loans at 2% of total loans.

The following table presents the composition of loans held for investment, net of unearned income, as of the dates indicated:

  December 31,   September 30,   December 31,
Loans Held for Investment 2019   2019   2018
  (In thousands)
Commercial and industrial $ 835,236    $ 871,192   $ 533,188
Agricultural 140,446    151,984   96,956
Commercial real estate          
Construction and development 298,077    296,586   217,617
Farmland 181,885    188,394   88,807
Multifamily 227,407    236,145   134,741
Other 1,107,490    1,102,744   826,163
Total commercial real estate 1,814,859    1,823,869   1,267,328
Residential real estate          
One-to-four family first liens 407,418    416,194   341,830
One-to-four family junior liens 170,381    176,162   120,049
Total residential real estate 577,799    592,356   461,879
Consumer 82,926    85,327   39,428
Loans held for investment, net of unearned income $ 3,451,266    $ 3,524,728   $ 2,398,779
                 

“Loan balances fell during the quarter due to several factors. We continued to experience higher than anticipated loan pay-offs. Further, weak loan demand, including line utilization, also contributed to lower loan volumes,” stated Mr. Funk.

Provision and Allowance for Loan Losses

The following table shows the activity in the allowance for loan losses for the periods indicated:

  Three Months Ended   Year Ended
  December 31,   September 30,   December 31,   December 31,   December 31,
Allowance for Loan Losses Roll Forward 2019   2019   2018   2019   2018
  (In thousands)
Beginning balance $ 31,532     $ 28,691     $ 31,278     $ 29,307     $ 28,059  
Charge-offs (3,212 )   (1,635 )   (5,456 )   (8,390 )   (7,040 )
Recoveries 155     212     235     1,004     988  
Net charge-offs (3,057 )   (1,423 )   (5,221 )   (7,386 )   (6,052 )
Provision for loan losses 604     4,264     3,250     7,158     7,300  
Ending balance $ 29,079     $ 31,532     $ 29,307     $ 29,079     $ 29,307  
                                       

As of December 31, 2019, the allowance for loan losses was $29.1 million, or 0.84% of loans held for investment, net of unearned income, compared with $29.3 million, or 1.22%, at December 31, 2018. The decline in coverage ratio from year-end 2018 was due primarily to loans acquired in the ATBancorp acquisition. Those loans were measured at fair value upon acquisition and, as a result, initially there was no allowance for loan losses recognized for such loans. 

Deposits

The following table presents the composition of our deposit portfolio as of the dates indicated:

  December 31,   September 30,   December 31,
Deposit Composition 2019   2019   2018
  (In thousands)
Noninterest bearing deposits $ 662,209    $ 673,777   $ 439,133
Interest checking deposits 962,830    924,861   683,894
Money market deposits 763,028    763,661   555,839
Savings deposits 387,142    389,606   210,416
Total non-maturity deposits 2,775,209    2,751,905   1,889,282
Time deposits of $250,000 and under 682,232    685,409   532,395
Time deposits over $250,000 271,214    272,398   191,252
Total time deposits 953,446    957,807   723,647
Total deposits $ 3,728,655    $ 3,709,712   $ 2,612,929
                 

Mr. Funk noted, “Every region of legacy MidWestOne saw increased deposit balances in 2019 which resulted in one of the best deposit generation years ever for our company. In addition, deposit run-off in the former ATBancorp footprint slowed significantly during the fourth quarter.”

CREDIT QUALITY

The following table presents a roll forward of nonperforming loans for the period indicated:

      90+ Days Past   Performing    
      Due & Still   Troubled Debt    
Nonperforming Loans Nonaccrual   Accruing   Restructured   Total
  (In thousands)
Balance at December 31, 2018 $ 19,924     $ 365     $ 5,284     $ 25,573  
Loans placed on nonaccrual, restructured or 90+ days past due & still accruing 29,954     1,369     215     31,538  
Established through acquisition 12,116             12,116  
Repayments (including interest applied to principal) (9,993 )   (18 )   (573 )   (10,584 )
Loans returned to accrual status or no longer past due (1,824 )   (962 )       (2,786 )
Charge-offs (6,924 )           (6,924 )
Transfers to foreclosed assets (1,770 )           (1,770 )
Transfers to nonaccrual     (618 )   (554 )   (1,172 )
Balance at December 31, 2019 $ 41,483     $ 136     $ 4,372     $ 45,991  
                               

The following table presents selected loan credit quality metrics as of the dates indicated:

  December 31,   September 30,   December 31,
Credit Quality Metrics 2019   2019   2018
  (dollars in thousands)
Nonaccrual loans held for investment $ 41,483     $ 31,968     $ 19,924  
Performing troubled debt restructured loans held for investment 4,372     4,701     5,284  
Accruing loans contractually past due 90 days or more 136     236     365  
Total nonperforming loans 45,991     36,905     25,573  
Foreclosed assets, net 3,706     4,366     535  
Total nonperforming assets $ 49,697     $ 41,271     $ 26,108  
Allowance for loan losses 29,079     31,532     29,307  
Provision for loan losses (for the quarter) 604     4,264     3,250  
Net charge-offs (for the quarter) 3,057     1,423     5,221  
Net charge-offs to average loans held for investment (for the quarter) 0.35 %   0.16 %   0.86 %
Allowance for loan losses to loans held for investment, net of unearned income 0.84 %   0.89 %   1.22 %
Allowance for loan losses to nonaccrual loans held for investment, net of unearned income 70.10 %   98.64 %   147.09 %
Nonaccrual loans held for investment to loans held for investment 1.20 %   0.91 %   0.83 %
                 

“While nonaccrual loans increased by $9.5 million during the quarter, we believe these loans have been properly evaluated in our allowance for loan losses. Further, subsequent to year-end, $2.2 million of these loans were paid-off,” noted Mr. Funk.

CORPORATE UPDATE

Share Repurchase Program

During the fourth quarter of 2019, the Company repurchased 19,102 shares of its common stock at an average price of $29.65 per share and a total cost of $566 thousand. At December 31, 2019, $9.0 million remained available to repurchase shares under the Company’s current share repurchase program.

Cash Dividend Announcement

On January 22, 2020, the Company’s board of directors declared a quarterly cash dividend of $0.22 per common share. The dividend is payable March 16, 2020, to shareholders of record at the close of business on March 2, 2020. "The 9% increase in our dividend reflects good 2019 financial performance and our optimism for the future. We continue to be pleased with our tangible common equity ratio of 8.48%," Mr. Funk concluded.

Measurement of Credit Losses on Financial Instruments (CECL)

On January 1, 2020, new accounting and recognition guidance related to credit losses and impairment of certain financial assets became effective for the Company. Our latest estimate of the impact based on December 31, 2019 loan data and economic forecasts indicates that the allowance for credit losses for loans and off-balance sheet credit exposures will increase between 20% and 30%. The current estimate and future calculations are highly dependent on loan composition, macroeconomic conditions and forecasts, and other management assumptions and judgments.

CONFERENCE CALL DETAILS

The Company will host a conference call for investors at 11:00 a.m. CT on Friday, January 24, 2020. To participate, please dial 866-233-3483 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until April 24, 2020, by calling 877-344-7529 and using the replay access code of 10136587. A transcript of the call will also be available on the Company’s web site (www.midwestone.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 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 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) 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, 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; (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, financial technology (FinTech) companies, 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
  December 31,   September 30,   December 31,
  2019   2019   2018
  (In thousands)
ASSETS          
Cash and due from banks $ 67,174     $ 79,776     $ 43,787  
Interest earning deposits in banks 6,112     6,413     1,693  
Federal funds sold 198     478      
Total cash and cash equivalents 73,484     86,667     45,480  
Debt securities available for sale at fair value 785,977     503,278     414,101  
Held to maturity securities at amortized cost     190,309     195,822  
Total securities held for investment 785,977     693,587     609,923  
Loans held for sale 5,400     7,906     666  
Gross loans held for investment 3,469,236     3,545,993     2,405,001  
Unearned income, net (17,970 )   (21,265 )   (6,222 )
Loans held for investment, net of unearned income 3,451,266     3,524,728     2,398,779  
Allowance for loan losses (29,079 )   (31,532 )   (29,307 )
Total loans held for investment, net 3,422,187     3,493,196     2,369,472  
Premises and equipment, net 90,723     91,190     75,773  
Goodwill 93,068     93,258     64,654  
Other intangible assets, net 31,693     33,635     9,875  
Foreclosed assets, net 3,706     4,366     535  
Other assets 147,335     144,482     115,102  
Total assets $ 4,653,573     $ 4,648,287     $ 3,291,480  
LIABILITIES          
Noninterest bearing deposits $ 662,209     $ 673,777     $ 439,133  
Interest bearing deposits 3,066,446     3,035,935     2,173,796  
Total deposits 3,728,655     3,709,712     2,612,929  
Short-term borrowings 139,349     155,101     131,422  
Long-term debt 231,660     244,677     168,726  
Other liabilities 44,927     40,912     21,336  
Total liabilities 4,144,591     4,150,402     2,934,413  
SHAREHOLDERS' EQUITY          
Common stock 16,581     16,581     12,463  
Additional paid-in capital 297,390     297,144     187,813  
Retained earnings 201,105     191,007     168,951  
Treasury stock (10,466 )   (9,933 )   (6,499 )
Accumulated other comprehensive income (loss) 4,372     3,086     (5,661 )
Total shareholders' equity 508,982     497,885     357,067  
Total liabilities and shareholders' equity $ 4,653,573     $ 4,648,287     $ 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   Year Ended
    December 31,   September 30,   December 31,   December 31,
    2019   2019   2018 (1)   2019   2018 (1)
    (In thousands, except per share data)
Interest income                    
Loans, including fees   $ 44,906     $ 49,169     $ 29,052     $ 163,163    $ 111,193
Taxable investment securities   3,540     3,376     2,774     13,132    11,027
Tax-exempt investment securities   1,465     1,401     1,375     5,696    5,827
Other   115     130     23     450    62
Total interest income   50,026     54,076     33,224     182,441    128,109
Interest expense                    
Deposits   8,251     8,238     5,161     29,927    17,331
Short-term borrowings   368     522     374     1,847    1,315
Long-term debt   1,823     2,058     1,136     7,017    4,195
Total interest expense   10,442     10,818     6,671     38,791    22,841
Net interest income   39,584     43,258     26,553     143,650    105,268
Provision for loan losses   604     4,264     3,250     7,158    7,300
Net interest income after provision for loan losses   38,980     38,994     23,303     136,492    97,968
Noninterest income                    
Investment services and trust activities   2,421     2,339     1,274     8,040    4,953
Service charges and fees   2,072     2,068     1,556     7,452    6,157
Card revenue   1,142     1,655     1,095     5,594    4,223
Loan revenue   1,757     991     884     3,789    3,622
Bank-owned life insurance   501     514     381     1,877    1,610
Insurance commissions           260     734    1,284
Investment securities gains (losses), net   18     23     (4 )   90    193
Other   1,125     414     350     3,670    1,173
Total noninterest income   9,036     8,004     5,796     31,246    23,215
Noninterest expense                    
Compensation and employee benefits   19,246     17,426     12,111     65,660    49,758
Occupancy expense of premises, net   2,347     2,294     1,166     8,647    7,597
Equipment   2,251     2,181     1,433     7,717    5,565
Legal and professional   1,797     1,996     1,027     8,049    4,641
Data processing   1,492     1,234     875     4,579    2,951
Marketing   1,147     1,167     678     3,789    2,660
Amortization of intangibles   1,941     2,583     503     5,906    2,296
FDIC insurance   (72 )   (42 )   429     690    1,533
Communications   493     489     342     1,701    1,353
Foreclosed assets, net   173     265     46     580    21
Other   5,621     1,849     1,169     10,217    4,840
Total noninterest expense   36,436     31,442     19,779     117,535    83,215
Income before income tax expense   11,580     15,556     9,320     50,203    37,968
Income tax expense (benefit)   (1,791 )   3,256     1,696     6,573    7,617
Net income   $ 13,371     $ 12,300     $ 7,624     $ 43,630    $ 30,351
Earnings per common share                    
Basic   $ 0.83     $ 0.76     $ 0.62     $ 2.93    $ 2.48
Diluted   $ 0.83     $ 0.76     $ 0.62     $ 2.93    $ 2.48
Weighted average basic common shares outstanding   16,162     16,201     12,217     14,870    12,220
Weighted average diluted common shares outstanding   16,193     16,215     12,235     14,885    12,237
Dividends paid per common share   $ 0.2025     $ 0.2025     $ 0.1950     $ 0.81    $ 0.78

(1) Reclassified to conform to the current period’s presentation.

...
                   
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER CONSOLIDATED BALANCE SHEETS 
  December 31,   September 30,   June 30,   March 31,   December 31,
  2019   2019   2019   2019   2018
  (In thousands)
ASSETS                  
Cash and due from banks $ 67,174     $ 79,776     $ 72,801     $ 40,002     $ 43,787  
Interest earning deposits in banks 6,112     6,413     47,708     2,969     1,693  
Federal funds sold 198     478              
Total cash and cash equivalents 73,484     86,667     120,509     42,971     45,480  
Debt securities available for sale at fair value 785,977     503,278     460,302     432,979     414,101  
Held to maturity securities at amortized cost     190,309     193,173     195,033     195,822  
Total securities held for investment 785,977     693,587     653,475     628,012     609,923  
Loans held for sale 5,400     7,906     4,306     309     666  
Gross loans held for investment 3,469,236     3,545,993     3,569,236     2,409,333     2,405,001  
Unearned income, net (17,970 )   (21,265 )   (32,733 )   (5,574 )   (6,222 )
Loans held for investment, net of unearned income 3,451,266     3,524,728     3,536,503     2,403,759     2,398,779  
Allowance for loan losses (29,079 )   (31,532 )   (28,691 )   (29,652 )   (29,307 )
Total loans held for investment, net 3,422,187     3,493,196     3,507,812     2,374,107     2,369,472  
Premises and equipment, net 90,723     91,190     93,395     75,200     75,773  
Goodwill 93,068     93,258     93,376     64,654     64,654  
Other intangible assets, net 31,693     33,635     36,624     9,423     9,875  
Foreclosed assets, net 3,706     4,366     4,922     336     535  
Other assets 147,335     144,482     148,044     113,963     115,102  
Total assets $ 4,653,573     $ 4,648,287     $ 4,662,463     $ 3,308,975     $