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MidWestOne Financial Group, Inc. Reports Financial Results for The second Quarter of 2019

IOWA CITY, Iowa, July 25, 2019 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq - MOFG) (“we”, “our”, or “the Company”) today reported its financial results for the second quarter of 2019. Net income for the second quarter of 2019 was $10.7 million, or $0.72 per diluted common share, compared to net income of $7.3 million, or $0.60 per diluted common share, for the first quarter of 2019 (the “linked quarter”).

Charles Funk, President and CEO commented, “The second quarter saw the consummation of our acquisition of ATBancorp and, as a result, our earnings reflected the impact of certain one-time costs incurred in connection with the merger. With that said, we believe the underlying trends are positive. Excluding transaction charges of $0.16 per diluted share, net income for the quarter was $0.88 per diluted share, and return on average tangible equity was 16.28%.”

FINANCIAL HIGHLIGHTS

  As of or For the Three Months Ended   As of or For the Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
  2019   2019   2018   2019   2018
                   
  (Dollars in thousands, except per share amounts)
Net income $ 10,674     $ 7,285     $ 8,156     $ 17,959     $ 15,949  
Earnings per common share, diluted $ 0.72     $ 0.60     $ 0.67     $ 1.33     $ 1.30  
Return on average assets 1.01 %   0.89 %   1.01 %   0.96 %   1.00 %
Return on average equity 9.66 %   8.22 %   9.55 %   9.02 %   9.41 %
Return on average tangible equity (1) 13.34 %   10.85 %   12.91 %   12.21 %   12.81 %
                   
Net interest margin (tax equivalent)(1) 3.68 %   3.56 %   3.65 %   3.63 %   3.67 %
Yield on average loans (tax equivalent)(1) 5.10 %   4.93 %   4.76 %   5.03 %   4.74 %
Cost of average total deposits 0.92 %   0.88 %   0.62 %   0.90 %   0.59 %
Efficiency ratio(1) 63.30 %   63.00 %   60.76 %   63.17 %   60.62 %
                   
Total assets $ 4,662,463     $ 3,308,975     $ 3,276,277     $ 4,662,463     $ 3,276,277  
Loans held for investment, net of unearned income $ 3,536,503     $ 2,403,759     $ 2,364,035     $ 3,536,503     $ 2,364,035  
Total deposits $ 3,725,472     $ 2,684,827     $ 2,604,201     $ 3,725,472     $ 2,604,201  
                   
Equity to assets ratio 10.47 %   11.00 %   10.57 %   10.47 %   10.57 %
Tangible common equity ratio(1) 8.06 %   8.97 %   8.48 %   8.06 %   8.48 %
Book value per share $ 30.11     $ 29.94     $ 28.33     $ 30.11     $ 28.33  
Tangible book value per share(1) $ 22.56     $ 23.89     $ 22.22     $ 22.56     $ 22.22  
Gross loans held for investment to deposit ratio 95.81 %   89.74 %   90.78 %   95.81 %   90.78 %
                   
(1) Non-GAAP measure. See pages 14-15 for a detailed explanation.
 

Acquisition of ATBancorp

On May 1, 2019, we completed our 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(1)   $ 148,435  
Identifiable net assets acquired, at fair value    
Assets acquired    
Cash and due from banks $ 71,820    
Debt securities available for sale 99,353    
Loans(1) 1,137,880    
Premises and equipment(1) 19,213    
Core deposit intangible(1) 28,230    
Bank-owned life insurance 18,759    
Foreclosed assets(1) 3,767    
Other assets(1) 17,360    
Total assets acquired   1,396,382  
Liabilities assumed    
Deposits(1) 1,079,094    
Short-term borrowings(1) 60,761    
Long-term debt(1) 111,201    
Other liabilities(1) 25,613    
Total liabilities assumed   1,276,669  
Total identifiable net assets acquired, at fair value   $ 119,713  
Goodwill   $ 28,722  
(1) The initial accounting for the acquisition was incomplete at June 30, 2019 and the amount recognized was determined only provisionally.
 

In addition to the balance sheet impacts shown above, our net income for the quarter was reduced by $3.1 million in pre-tax, acquisition-related expenses stemming from the ATBancorp transaction. Those charges reduced diluted earnings per share by approximately $0.16.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income

Net interest income increased in the second quarter of 2019 to $34.8 million from $26.0 million in the linked quarter due primarily to higher average earning asset volumes and a higher tax equivalent net interest margin (“NIM”). Average earning assets increased $851.1 million from the linked quarter as a result of assets acquired in the ATBancorp transaction. Discount accretion from acquired loans added $2.2 million to net interest income in the current quarter compared to $586 thousand in the linked quarter.

The tax equivalent net interest margin increased to 3.68% for the second quarter of 2019 from 3.56% in the linked quarter as increased loan yields, driven by loan purchase discount accretion, outpaced higher funding costs. The loan yield was 5.10% for the second quarter of 2019 compared to 4.93% for the linked quarter. Loan purchase discount accretion added 28 bps to loan yields and 23 bps to the NIM in the current quarter compared to 10 bps and 8 bps, respectively, in the linked quarter. The cost of average total deposits in the second quarter of 2019 was 0.92% compared to 0.88% in the linked quarter. The increase reflects the merger, as well as higher rates paid to attract and retain deposits in a competitive market.

Noninterest Income

Noninterest income for the second quarter of 2019 increased $3.4 million, or 63%, from the linked quarter. The increase was due primarily to additional fee income (trust, service charges, card and loan revenue) earned as a result of the ATBancorp transaction. Further, ‘Other’ income reflected a gain of $1.1 million from the sale of assets of MidWestOne Insurance Services, Inc. Partially offsetting these increases, ‘Loan revenue’ included a $507 thousand negative valuation adjustment to the Company’s mortgage servicing rights.

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

  Three Months Ended
  June 30,   March 31,   June 30,
Noninterest Income 2019   2019   2018
           
  (In thousands)
Investment services and trust activities $ 1,890     $ 1,390     $ 1,218  
Service charges and fees 1,870     1,442     1,518  
Card revenue 1,799     998     1,093  
Loan revenue 648     393     906  
Bank-owned life insurance 470     392     397  
Insurance commissions 314     420     319  
Investment securities gains (losses), net 32     17     (4 )
Other 1,773     358     246  
Total noninterest income $ 8,796     $ 5,410     $ 5,693  
 

Noninterest Expense

Noninterest expense for the second quarter of 2019 increased $8.4 million, or 40.9%, from the linked quarter, due primarily to merger-related as well as additional on-going expenses incurred as a result of the ATBancorp transaction. Pre-tax merger-related expenses were $3.1 million for the second quarter of 2019 compared to $167 thousand in the linked quarter.

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

  Three Months Ended
  June 30,   March 31,   June 30,
Noninterest Expense 2019   2019   2018
           
  (In thousands)
Compensation and employee benefits $ 16,409     $ 12,579     $ 12,225  
Occupancy expense of premises, net 2,127     1,879     1,882  
Equipment 1,914     1,371     1,408  
Legal and professional 3,291     965     959  
Data processing 1,008     845     691  
Marketing 869     606     690  
Amortization of intangibles 930     452     589  
FDIC insurance 434     370     392  
Communications 377     342     341  
Foreclosed assets, net 84     58     145  
Other 1,597     1,150     1,264  
Total noninterest expense $ 29,040     $ 20,617     $ 20,586  
 

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

  Three Months Ended
  June 30,   March 31,   June 30,
Merger-related Expenses 2019   2019   2018
           
  (In thousands)
Compensation and employee benefits $ 1,020     $ 10     $  
Legal and professional 1,826     126      
Data processing 240     5      
Other 48     26      
Total merger-related costs $ 3,134     $ 167     $  
 

Income Taxes

The effective income tax rate was 23.2% for the second quarter of 2019 and 20.6% for the linked quarter. The effective tax rate for the second quarter of 2019 was higher due primarily to the payment of certain non-deductible merger related expenses and other merger-related items in the second quarter of 2019.

BALANCE SHEET HIGHLIGHTS

Mr. Funk continued, ”The highlight of the first six months was deposit growth in the legacy MidWestOne footprint of more than 4%. Loan growth continued to be challenged by paydowns in our rural regions but was strong in Iowa City and Denver, and solid in the Twin Cities markets.”

Loans Held for Investment

Loans held for investment, net of unearned income, increased $1.14 billion, or 47.4%, to $3.54 billion, primarily due to the merger. At June 30, 2019, commercial real estate loans comprised approximately 51% of the loan portfolio. Commercial and industrial loans was the next largest category at 25% of total loans, followed by residential real estate loans at 17%, agricultural loans at 4%, and consumer loans at 3%.

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

  June 30,   March 31,   December 31,   June 30,
Loans Held for Investment 2019   2019   2018   2018
               
  (In thousands)
Commercial and industrial $ 866,023     $ 535,878     $ 533,188     $ 512,357  
Agricultural 152,491     96,766     96,956     103,429  
Commercial real estate              
Construction and development 273,149     187,906     217,617     206,269  
Farmland 187,393     86,648     88,807     88,761  
Multifamily 243,928     161,067     134,741     129,659  
Other 1,114,039     843,817     826,163     819,205  
Total commercial real estate 1,818,509     1,279,438     1,267,328     1,243,894  
Residential real estate              
One-to-four family first liens 423,625     333,220     341,830     350,281  
One-to-four family junior liens 176,685     121,793     120,049     117,138  
Total residential real estate 600,310     455,013     461,879     467,419  
Consumer 99,170     36,664     39,428     36,936  
Loans held for investment, net of unearned income $ 3,536,503     $ 2,403,759     $ 2,398,779     $ 2,364,035  
 

Provision and Allowance for Loan Losses

For the second quarter of 2019, the provision for loan losses was $0.7 million, a decrease of $0.9 million from the linked quarter.

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

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
Allowance for Loan Losses Roll Forward 2019   2019   2018   2019   2018
                   
  (In thousands)
Beginning balance $ 29,652     $ 29,307     $ 29,671     $ 29,307     $ 28,059  
Charge-offs (2,187 )   (1,355 )   (291 )   (3,542 )   (767 )
Recoveries 530     106     170     636     408  
Net charge-offs (1,657 )   (1,249 )   (121 )   (2,906 )   (359 )
Provision for loan losses 696     1,594     1,250     2,290     3,100  
Ending balance $ 28,691     $ 29,652     $ 30,800     $ 28,691     $ 30,800  
 

Deposits

Total deposits at June 30, 2019, were $3.73 billion, an increase of $1.11 billion from December 31, 2018, due primarily to the merger. The mix of deposits reflected increases between December 31, 2018 and June 30, 2019 of $464.0 million, or 83.5% in money market deposits, $216.0 million, or 29.8%, in time deposits, $207.9 million, or 47.4%, in noninterest bearing deposits, $145.9 million, or 69.3%, in savings deposits, and $78.6 million, or 11.5%, in interest checking deposits.

“We ended the quarter with tangible equity to tangible assets of 8.06%,” said Mr. Funk. “We believe we have ample flexibility in terms of capital deployment in future quarters.”

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

  June 30,   March 31,   December 31,   June 30,
Deposit Composition 2019   2019   2018   2018
               
  (In thousands)
Noninterest bearing demand deposits $ 647,078     $ 426,729     $ 439,133     $ 469,862  
Interest checking deposits 762,530     696,760     683,894     654,094  
Money market deposits 1,019,886     629,838     555,839     529,290  
Savings deposits 356,328     200,998     210,416     216,866  
Total non-maturity deposits 2,785,822     1,954,325     1,889,282     1,870,112  
Time deposits of $250,000 and under 678,752     541,310     532,395     514,163  
Time deposits of $250,000 and over 260,898     189,192     191,252     219,926  
Total time deposits 939,650     730,502     723,647     734,089  
Total deposits $ 3,725,472     $ 2,684,827     $ 2,612,929     $ 2,604,201  
 

CREDIT QUALITY

The following table presents a roll forward of nonperforming loans as of the dates 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 12,849     1,000     72     13,921  
Established through acquisition 7,909     27         7,936  
Repayments (including interest applied to principal) (5,303 )   (18 )   (209 )   (5,530 )
Loans returned to accrual status or no longer past due (1,021 )   (144 )       (1,165 )
Charge-offs (3,023 )           (3,023 )
Transfers to foreclosed assets (460 )           (460 )
Transfers to nonaccrual     (283 )   (554 )   (837 )
Balance at June 30, 2019 $ 30,875     $ 947     $ 4,593     $ 36,415  

At June 30, 2019, net foreclosed assets totaled $4.9 million, up from $535 thousand at December 31, 2018, primarily due to the merger. As of June 30, 2019, the allowance for loan losses was $28.7 million, or 0.81% of loans held for investment, net of unearned income, compared with $29.3 million, or 1.22% at December 31, 2018. Acquired loans reduced this ratio by 41 basis points at June 30, 2019 as, at acquisition, such loans are measured at fair value which includes a credit-related discount and, thus, no allowance for loan losses is initially measured.

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

  June 30,   March 31,   December 31,   June 30,
Credit Quality Metrics 2019   2019   2018   2018
               
  (dollars in thousands)
Nonaccrual loans held for investment $ 30,875     $ 21,274     $ 19,924     $ 13,067  
Performing troubled debt restructured loans held for investment 4,593     5,161     5,284     8,362  
Accruing loans contractually past due 90 days or more 947     208     365     151  
Total nonperforming loans 36,415     26,643     25,573     21,580  
Foreclosed assets, net 4,922     336     535     676  
Total nonperforming assets $ 41,337     $ 26,979     $ 26,108     $ 22,256  
Allowance for loan losses 28,691     29,652     29,307     30,800  
Provision for loan losses (for the quarter) 696     1,594     3,250     1,250  
Net charge-offs (for the quarter) 1,657     1,249     5,221     121  
Net charge-offs to average loans held for investment (for the quarter) 0.21 %   0.21 %   0.86 %   0.02 %
Allowance for loan losses to loans held for investment, net of unearned income 0.81 %   1.23 %   1.22 %   1.30 %
Allowance for loan losses to nonaccrual loans held for investment, net of unearned income 92.93 %   139.38 %   147.09 %   235.71 %
Nonaccrual loans held for investment to loans held for investment 0.87 %   0.89 %   0.83 %   0.56 %

“We’ve made significant progress in identification and resolution of nonperforming loans in the legacy MidWestOne footprint,” noted Mr. Funk. “We believe our agricultural portfolio has stabilized, though close monitoring will be essential in the coming months. We also have good coverage as, excluding the $7.9 million of nonaccrual loans established in the ATBancorp transaction, the allowance for loan losses was at 124.93% of nonaccrual loans.”

CORPORATE UPDATE

MidWestOne Insurance Services, Inc. Asset Sale

On June 30, 2019, the Company sold substantially all of the assets used by MidWestOne Insurance Services, Inc. to sell insurance products. The Company recognized a pre-tax gain of $1.1 million from the sale which was reported in ‘Other’ noninterest income on the Company’s consolidated statements of income. In 2018, MidWestOne Insurance Services accounted for $1.3 million and $1.1 million of the Company’s total noninterest income and expense, respectively.

“We made the strategic decision to exit this line of business as our insurance revenues comprised a small percentage of overall revenues,” concluded Mr. Funk.

Share Repurchase Program

During the second quarter of 2019 the Company repurchased 56,985 shares at an average price of $28.01 and a total cost of $1.6 million. At June 30, 2019, $1.1 million remained available to repurchase shares under the Company’s current share repurchase program.

Cash Dividend Announcement

On July 16, 2019, the Company’s board of directors declared a quarterly cash dividend of $0.2025 per common share. The dividend is payable September 16, 2019, to shareholders of record at the close of business on September 2, 2019. At this quarterly rate, the indicated annual cash dividend is equal to $0.81 per common share.

CONFERENCE CALL DETAILS

The Company will host a conference call for investors at 11:00 a.m., CDT, on Friday, July 26, 2019. To participate, please dial 866-233-3483 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until October 26, 2019, by calling 877-344-7529 and using the replay access code of 10126192. A transcript of the call will also be available on the company’s web site (www.midwestone.com) within three business days of the event.

ABOUT MIDWESTONE FINANCIAL GROUP, INC.

MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWestOne Financial is the parent company of MidWestOne Bank, which operates banking offices in Iowa, Minnesota, Wisconsin, Florida, and Colorado. MidWestOne provides electronic delivery of financial services through its website, MidWestOne.com. MidWestOne Financial trades on the Nasdaq Global Select Market under the symbol “MOFG”.

Cautionary Note Regarding Forward-Looking Statements

This release contains certain “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We and our representatives may, from time to time, make written or oral statements that are “forward-looking” and provide information other than historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. These factors include, among other things, the factors listed below. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “should,” “could,” “would,” “plans,” “goals,” “intend,” “project,” “estimate,” “forecast,” “may” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Additionally, we undertake no obligation to update any statement in light of new information or future events, except as required under federal securities law.

Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have an impact on our ability to achieve operating results, growth plan goals and future prospects include, but are not limited to, the following: (1) credit quality deterioration or pronounced and sustained reduction in real estate market values causing an increase in the allowance for credit losses, an increase in the provision for loan losses, and a reduction in net earnings; (2) the risks related to mergers, including our pending merger with ATBancorp, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; (3) our management’s ability to reduce and effectively manage interest rate risk and the impact of interest rates in general on the volatility of our net interest income; (4) changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing; (5) fluctuations in the value of our investment securities; (6) governmental monetary and fiscal policies; (7) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators and changes in the scope and cost of Federal Deposit Insurance Corporation insurance and other coverages; (8) the ability to attract and retain key executives and employees experienced in banking and financial services; (9) the sufficiency of the allowance for loan losses to absorb the amount of actual losses inherent in our existing loan portfolio; (10) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (11) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (12) the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds, and other financial institutions operating in our markets or elsewhere or providing services similar to ours; (13) the failure of assumptions underlying the establishment of allowances for loan losses and estimation of values of collateral and various financial assets and liabilities; (14) volatility of rate-sensitive deposits; (15) operational risks, including data processing system failures or fraud; (16) asset/liability matching risks and liquidity risks; (17) the costs, effects and outcomes of existing or future litigation; (18) changes in general economic or industry conditions, nationally, internationally or in the communities in which we conduct business; (19) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (20) war or terrorist activities which may cause further deterioration in the economy or cause instability in credit markets; (21) cyber-attacks; (22) the imposition of tariffs or other domestic or international governmental policies impacting the value of the agricultural or other products of our borrowers; and (23) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.


MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

  June 30,   March 31,   December 31,
  2019   2019   2018
  (In thousands)    
ASSETS          
Cash and due from banks $ 72,801     $ 40,002     $ 43,787  
Interest earning deposits in banks 47,708     2,969     1,693  
Total cash and cash equivalents 120,509     42,971     45,480  
Debt securities available for sale at fair value 460,302     432,979     414,101  
Held to maturity securities at amortized cost 193,173     195,033     195,822  
Total securities held for investment 653,475     628,012     609,923  
Loans held for sale 4,306     309     666  
Gross loans held for investment 3,569,236     2,409,333     2,405,001  
Unearned income, net (32,733 )   (5,574 )   (6,222 )
Loans held for investment, net of unearned income 3,536,503     2,403,759     2,398,779  
Allowance for loan losses (28,691 )   (29,652 )   (29,307 )
Total loans held for investment, net 3,507,812     2,374,107     2,369,472  
Premises and equipment, net 93,395     75,200     75,773  
Goodwill 93,376     64,654     64,654  
Other intangible assets, net 36,624     9,423     9,875  
Foreclosed assets, net 4,922     336     535  
Other assets 148,044     113,963     115,102  
Total assets $ 4,662,463     $ 3,308,975     $ 3,291,480  
LIABILITIES          
Noninterest bearing deposits $ 647,078     $ 426,729     $ 439,133  
Interest bearing deposits 3,078,394     2,258,098     2,173,796  
Total deposits 3,725,472     2,684,827     2,612,929  
Short-term borrowings 153,829     76,066     131,422  
Long-term debt 252,673     162,471     168,726  
Other liabilities 42,138     21,762     21,336  
Total liabilities 4,174,112     2,945,126     2,934,413  
SHAREHOLDERS' EQUITY          
Common stock 16,581     12,463     12,463  
Additional paid-in capital 296,879     187,535     187,813  
Retained earnings 181,984     173,771     168,951  
Treasury stock (8,716 )   (7,297 )   (6,499 )
Accumulated other comprehensive income (loss) 1,623     (2,623 )   (5,661 )
Total shareholders' equity 488,351     363,849     357,067  
Total liabilities and shareholders' equity $ 4,662,463     $ 3,308,975     $ 3,291,480  

Certain reclassifications have been made to prior periods’ consolidated financial statements to present them on a basis comparable with the current period’s consolidated financial statements.


MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,
  2019   2019   2018 (1)   2019   2018 (1)
                   
  (In thousands, except per share data)
Interest income                  
Loans, including fees $ 40,053     $ 29,035     $ 27,486     $ 69,088     $ 54,053  
Taxable investment securities 3,289     2,927     2,790     6,216     5,538  
Tax-exempt investment securities 1,424     1,406     1,528     2,830     3,057  
Other 185     20     18     205     27  
Total interest income 44,951     33,388     31,822     78,339     62,675  
Interest expense                  
Deposits 7,743     5,695     4,009     13,438     7,545  
Short-term borrowings 500     457     359     957     620  
Long-term debt 1,876     1,260     1,024     3,136     1,906  
Total interest expense 10,119     7,412     5,392     17,531     10,071  
Net interest income 34,832     25,976     26,430     60,808     52,604  
Provision for loan losses 696     1,594     1,250     2,290     3,100  
Net interest income after provision for loan losses 34,136     24,382     25,180     58,518     49,504  
Noninterest income                  
Investment services and trust activities 1,890     1,390     1,218     3,280     2,457  
Service charges and fees 1,870     1,442     1,518     3,312     3,089  
Card revenue 1,799     998     1,093     2,797     2,059  
Loan revenue 648     393     906     1,041     1,847  
Bank-owned life insurance 470     392     397     862     830  
Insurance commissions 314     420     319     734     720  
Investment securities gains (losses), net 32     17     (4 )   49     5  
Other 1,773     358     246     2,131     367  
Total noninterest income 8,796     5,410     5,693     14,206     11,374  
Noninterest expense                  
Compensation and employee benefits 16,409     12,579     12,225     28,988     24,596  
Occupancy expense of premises, net 2,127     1,879     1,882     4,006     3,788  
Equipment 1,914     1,371     1,408     3,285     2,791  
Legal and professional 3,291     965     959     4,256     1,753  
Data processing 1,008     845     691     1,853     1,379  
Marketing 869     606     690     1,475     1,310  
Amortization of intangibles 930     452     589     1,382     1,246  
FDIC insurance 434     370     392     804     711  
Communications 377     342     341     719     670  
Foreclosed assets, net 84     58     145     142     106  
Other 1,597     1,150     1,264     2,747     2,464  
Total noninterest expense 29,040     20,617     20,586     49,657     40,814  
Income before income tax expense 13,892     9,175     10,287     23,067     20,064  
Income tax expense 3,218     1,890     2,131     5,108     4,115  
Net income $ 10,674     $ 7,285     $ 8,156     $ 17,959     $ 15,949  
Earnings per common share                  
Basic $ 0.72     $ 0.60     $ 0.67     $ 1.33     $ 1.31  
Diluted $ 0.72     $ 0.60     $ 0.67     $ 1.33     $ 1.30  
Weighted average basic common shares outstanding 14,894     12,164     12,218     13,537     12,220  
Weighted average diluted common shares outstanding 14,900     12,177     12,230     13,545     12,235  
Dividends paid per common share $ 0.2025     $ 0.2025     $ 0.195     $ 0.405     $ 0.39  
(1) Reclassified to conform to the current period’s presentation.


MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER CONSOLIDATED BALANCE SHEETS

...
  June 30,   March 31,   December 31,   September 30,   June 30,
  2019   2019   2018   2018   2018
                   
  (In thousands)
ASSETS                  
Cash and due from banks $ 72,801     $ 40,002     $ 43,787     $ 49,229     $ 41,547  
Interest earning deposits in banks 47,708     2,969     1,693     4,150     1,717  
Total cash and cash equivalents 120,509     42,971     45,480     53,379     43,264  
Debt securities available for sale at fair value 460,302     432,979     414,101     407,766     438,312  
Held to maturity securities at amortized cost 193,173     195,033     195,822     191,733     192,896  
Total securities held for investment 653,475     628,012     609,923     599,499     631,208  
Loans held for sale 4,306     309     666     1,124     1,528  
Gross loans held for investment 3,569,236     2,409,333     2,405,001     2,384,459     2,371,406  
Unearned income, net (32,733 )   (5,574 )   (6,222 )   (6,810 )   (7,371 )
Loans held for investment, net of unearned income 3,536,503     2,403,759     2,398,779     2,377,649     2,364,035  
Allowance for loan losses (28,691 )   (29,652 )   (29,307 )   (31,278 )   (30,800 )
Total loans held for investment, net 3,507,812     2,374,107     2,369,472     2,346,371     2,333,235  
Premises and equipment, net 93,395     75,200     75,773     76,497     78,106  
Goodwill 93,376     64,654     64,654     64,654     64,654  
Other intangible assets, net 36,624     9,423     9,875     10,378     10,925  
Foreclosed assets, net 4,922     336     535     549     676  
Other assets 148,044     113,963     115,102     115,514     112,681  
Total assets $ 4,662,463     $ 3,308,975     $ 3,291,480     $ 3,267,965     $ 3,276,277  
LIABILITIES                  
Noninterest bearing deposits $ 647,078     $ 426,729     $ 439,133     $ 458,576     $ 469,862  
Interest bearing deposits 3,078,394     2,258,098     2,173,796     2,173,683     2,134,339