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MidWestOne Financial Group, Inc. (MOFG)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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Previous Close18.75
Open18.62
Bid0.00 x 900
Ask0.00 x 900
Day's Range18.29 - 18.63
52 Week Range15.25 - 39.03
Volume31,897
Avg. Volume53,690
Market Cap301.863M
Beta (5Y Monthly)1.07
PE Ratio (TTM)8.47
EPS (TTM)2.18
Earnings DateOct 22, 2020 - Oct 26, 2020
Forward Dividend & Yield0.88 (4.69%)
Ex-Dividend DateAug 31, 2020
1y Target Est23.50
  • MidWestOne Financial Group Inc (MOFG) Q2 2020 Earnings Call Transcript
    Motley Fool

    MidWestOne Financial Group Inc (MOFG) Q2 2020 Earnings Call Transcript

    Image source: The Motley Fool. MidWestOne Financial Group Inc (NASDAQ: MOFG)Q2 2020 Earnings CallJul 31, 2020, 12:00 p.m. ETContents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: OperatorGood day and welcome to the MidWestOne Financial Group's Second Quarter 2020 Earnings Conference Call.

  • MidWestOne (MOFG) Surpasses Q2 Earnings Estimates
    Zacks

    MidWestOne (MOFG) Surpasses Q2 Earnings Estimates

    MidWestOne (MOFG) delivered earnings and revenue surprises of 231.82% and -1.40%, respectively, for the quarter ended June 2020. Do the numbers hold clues to what lies ahead for the stock?

  • GlobeNewswire

    MidWestOne Financial Group, Inc. Reports Financial Results for the Second Quarter of 2020

    Second Quarter Summary1 * Net income for the second quarter of $11.7 million, or $0.73 per diluted common share. * Pre-tax, Pre-provision Net Revenue2 of $18.9 million, an increase of $1.4 million or 8%. * Credit Loss Expense of $4.7 million, a decrease of $17.0 million or 78%. * Average deposit balances increased $405.6 million  or 11%. * Allowance for Credit Losses as a percentage of loans held for investment, net of unearned income, increased to 1.55% (1.70% when adjusted for $327.6 million of Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") loans)2.IOWA CITY, Iowa, July 30, 2020 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq - MOFG) (“we”, “our”, or the "Company”) today reported net income for the second quarter of 2020 of $11.7 million, or $0.73 per diluted common share, compared to net loss of $2.0 million, or $0.12 per diluted common share, for the first quarter of 2020 (the “linked quarter”). Credit loss expense for the second quarter was $4.7 million, which reduced diluted earnings per common share by approximately $0.22 for the second quarter of 2020.Charles Funk, Chief Executive Officer, commented, “We are pleased with our results in the second quarter, particularly our bankers’ efforts in the origination of SBA PPP loans during a period of unprecedented challenges for our customers, employees, and communities. The commitment of our employees combined with our business continuity planning efforts and digital service offerings provided our customers continued access to banking services despite COVID-19’s far-reaching impacts. While we believe there will likely be volatility in earnings in this economic environment, the quarterly return on average equity of 9.21% and a return on average tangible equity of 13.50% represents solid performance."FINANCIAL HIGHLIGHTSThree Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30,  2020 2020 2019 2020 2019  (Dollars in thousands, except per share amounts) Net interest income$38,712   $37,406    $34,832   $76,118   $60,808   Noninterest income8,269   10,155    8,796   18,424   14,206   Total revenue, net of interest expense46,981   47,561    43,628   94,542   75,014   Credit loss expense4,685   21,733    696   26,418   2,290   Noninterest expense28,038   30,001    29,040   58,039   49,657   Income (loss) before income tax expense (benefit)14,258   (4,173)  13,892   10,085   23,067   Income tax expense (benefit)2,546   (2,198)  3,218   348   5,108   Net income (loss)$11,712   $(1,975)  $10,674   $9,737   $17,959   Diluted earnings (loss) per share$0.73   $(0.12)  $0.72   $0.60   $1.33              Return on average assets0.92 % (0.17)% 1.01 % 0.40 % 0.96 % Return on average equity9.21 % (1.54)% 9.66 % 3.82 % 9.02 % Return on average tangible equity(2)13.50 % (0.47)% 13.41 % 6.48 % 12.24 % Efficiency ratio(2)54.80 % 57.67  % 56.24 % 56.24 % 58.85 % 1 Second 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.COVID-19 RESPONSE Branch OperationsThe Company commenced re-opening selected bank branch lobbies on June 1, 2020 and continues to actively manage lobby access based on local COVID-19 community spread conditions. Mr. Funk noted, "We have continued to encourage and practice proper protocols to keep our employees and customers safe. Recently, we have temporarily closed lobbies in communities where COVID cases saw marked increases. The MidWestOne team remains resilient and together."SBA PPP LoansThe Company remains committed to supporting its customers and communities during these difficult times. This commitment includes offering PPP loans as authorized by the Coronavirus Aid, Relief, and Economic Security Act enacted on March 27, 2020, as amended. As of June 30, 2020, the Company had funded 2,534 PPP loans totaling $345.4 million with an average loan size of $136 thousand. These loans earn a 1% annual interest rate plus an origination fee from the SBA based upon loan size. At June 30, 2020, the amortized cost basis of PPP loans was $327.6 million and the unamortized net fees were $9.3 million. The fees will be recognized over the term of the respective loans.Loan ModificationsThe Company continues to offer payment deferrals and mortgage forbearance to customers, which totaled $474.9 million as of June 30, 2020. Approximately 32% of the modifications were interest only payments and 68% were full payment deferrals, with both modification types generally three months in length. As of July 24, 2020, 16 loans, totaling $31.2 million, were either in or being processed for a second deferral period.INCOME STATEMENT HIGHLIGHTSNet Interest IncomeNet interest income increased in the second quarter of 2020 to $38.7 million from $37.4 million as larger volumes of interest earning assets more than offset net interest margin compression. The tax equivalent net interest margin decreased 22 basis points ("bps") to 3.38% for the second quarter of 2020 from 3.60% in the linked quarter. Interest earning assets yields decreased 47 basis points from the linked quarter, approximately 8 basis points of which was attributable to PPP loans, which have a coupon rate of 1%. Net fee accretion for PPP loans in the second quarter of 2020 was $1.1 million. Partially offsetting the lower asset yields was a 26 bps reduction in cost of funds.The Company's core net interest margin (a non-GAAP measure, see the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure), which excludes loan purchase discount accretion, decreased 15 bps from the linked quarter as lower asset yields were only partially offset by reduced funding costs. Loan purchase discount accretion added $2.6 million to net interest income in the second quarter compared to $3.0 million in the linked quarter."Our margin suffered from an asset mix change whereby loans were paid off and were reinvested into lower yielding securities," stated Mr. Funk.Noninterest IncomeNoninterest income for the second quarter of 2020 decreased $1.9 million, or 19%, from the linked quarter. The decrease was due primarily to decreases of $1.8 million and $0.5 million in the ‘Other’ income and 'Service charges and fees' line items, respectively. The 'Other' line item reflected a decrease from the linked quarter of $1.6 million in income from our commercial loan back-to-back swap program. The decrease in 'Service charges and fees' was primarily driven by a $0.5 million decrease in overdraft fees, which reflected lower customer overdraft activity coupled with increased waivers of such fees. The net decrease in noninterest income was partially offset by an increase in loan revenue of $0.8 million, which was driven by increased volume in home mortgage loans."We enjoyed solid performance from our home mortgage business as low mortgage rates continued to drive refinance and purchase activity," noted Mr. Funk.The following table presents details of noninterest income for the periods indicated: Three Months Ended  June 30, March 31, June 30, Noninterest Income2020 2020 2019  (In thousands) Investment services and trust activities$2,217   $2,536   $1,890   Service charges and fees1,290   1,826   1,870   Card revenue1,237   1,365   1,799   Loan revenue1,910   1,123   648   Bank-owned life insurance635   520   470   Insurance commissions—   —   314   Investment securities gains, net6   42   32   Other974   2,743   1,773   Total noninterest income$8,269   $10,155   $8,796   Noninterest ExpenseNoninterest expense for the second quarter of 2020 decreased $2.0 million, or 6.5%, from the linked quarter due primarily to a decrease in compensation and employee benefits of $0.9 million. The decrease in compensation and employee benefits was primarily attributable to a $1.4 million benefit from SBA PPP loan origination costs which are deferred and amortized over the life of the loan to which they relate.The following table presents details of noninterest expense for the periods indicated: Three Months Ended  June 30, March 31, June 30, Noninterest Expense2020 2020 2019  (In thousands) Compensation and employee benefits$15,682   $16,617   $16,409   Occupancy expense of premises, net2,253   2,341   2,127   Equipment2,010   1,880   1,914   Legal and professional1,382   1,535   3,291   Data processing1,240   1,354   1,008   Marketing910   1,062   869   Amortization of intangibles1,748   2,028   930   FDIC insurance445   448   434   Communications449   457   377   Foreclosed assets, net34   138   84   Other1,885   2,141   1,597   Total noninterest expense$28,038   $30,001   $29,040   The following table presents details of merger-related costs for the periods indicated: Three Months Ended  June 30, March 31, June 30, Merger-related Expenses2020 2020 2019  (In thousands) Compensation and employee benefits$—   $—   $1,020   Equipment7   —   —   Legal and professional—   —   1,826   Data processing—   44   240   Other—   10   48   Total merger-related costs$7   $54   $3,134   Income TaxesThe Company recognized a net income tax expense of $2.5 million in the second quarter of 2020 compared to a net income tax benefit of $2.2 million in the linked quarter. The resulting net income tax expense during the second quarter of 2020 was primarily due to the net income earned during the quarter, which was offset by the recognition of $771 thousand in tax credits. BALANCE SHEET, LIQUIDITY AND CAPITAL HIGHLIGHTSAs of or For the Three Months Ended June 30, March 31, June 30, 2020 2020 2019  (Dollars in millions, except per share amounts) Ending Balance Sheet      Total assets$5,231.0   $4,763.9   $4,662.5   Loans held for investment, net of unearned income3,597.0   3,425.8   3,536.5   Total securities held for investment1,187.5   881.9   653.5   Total deposits4,265.4   3,859.8   3,725.5   Average Balance Sheet      Average total assets$5,098.8   $4,669.7   $4,230.4   Average total loans3,633.7   3,436.3   3,183.1   Average total deposits4,165.6   3,760.0   3,391.0   Funding and Liquidity      Short-term borrowings$162.2   $129.5   $153.8   Long-term debt190.0   209.9   252.7   Loans to deposits ratio84.84 % 89.15 % 95.81 % Equity      Total shareholders' equity$520.8   $500.6   $488.4   Equity to assets ratio9.96 % 10.51 % 10.47 % Tangible common equity(1)398.4   376.4   358.4   Tangible common equity ratio(1)7.80 % 8.11 % 7.91 % Per Share Data      Book value$32.35   $31.11   $30.11   Tangible book value(1)$24.74   $23.39   $22.09   (1) Non-GAAP Measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. Mr. Funk noted, "Our borrowers tended to be cautious in the second quarter as lines of credit were paid down and liquidity was used to pay down loans. In addition, several projects we agreed to fund were put on hold due to the uncertainty surrounding the economy."Loans Held for InvestmentLoans held for investment, net of unearned income, increased $171.3 million, or 5%, to $3.60 billion from March 31, 2020 as a result of the Company's participation in the PPP, offset by the continued pay downs on loans held for investment. At June 30, 2020, commercial real estate loans comprised approximately 49% of the loan portfolio. Commercial and industrial loans were the next largest category at 30%, followed by residential real estate loans at 15%, 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: June 30, March 31, June 30, Loans Held for Investment2020 2020 2019  (In thousands) Commercial and industrial$1,084,527   $864,702   $866,023   Agricultural140,837   145,435   152,491   Commercial real estate      Construction and development199,950   282,921   273,149   Farmland161,897   168,777   187,393   Multifamily247,403   217,108   243,928   Other1,155,489   1,111,640   1,114,039   Total commercial real estate1,764,739   1,780,446   1,818,509   Residential real estate      One-to-four family first liens377,100   389,055   423,625   One-to-four family junior liens155,814   165,235   176,685   Total residential real estate532,914   554,290   600,310   Consumer74,022   80,889   99,170   Loans held for investment, net of unearned income$3,597,039   $3,425,762   $3,536,503   Credit Loss Expense & Allowance for Credit LossesThe following table shows the activity in the allowance for credit losses related to loans for the periods indicated: Three Months Ended Six Months Ended  June 30, March 31, June 30, June 30, June 30, Allowance for Credit Losses Roll Forward2020 2020 2019 2020 2019  (In thousands) Beginning balance$51,187    $29,079    $29,652    $29,079    $29,307    Cumulative effect of change in accounting principle - CECL—    3,984    —    3,984    —    Charge-offs(2,103)  (1,497)  (2,187)  (3,600)  (3,542)  Recoveries236    299    530    535    636    Net charge-offs(1,867)  (1,198)  (1,657)  (3,065)  (2,906)  Credit loss expense related to loans6,324    19,322    696    25,646    2,290    Ending balance$55,644    $51,187    $28,691    $55,644    $28,691    Effective January 1, 2020, the Company adopted the Financial Instruments - Credit Losses (CECL) accounting guidance. The adoption of this guidance established a single allowance framework for all financial assets carried at amortized cost and certain off-balance sheet credit exposures. The framework requires that management's estimate reflects credit losses over the full remaining expected life of each credit and considers expected future changes in macroeconomic conditions. The adoption resulted in the recognition on January 1, 2020 of cumulative effect adjustments of $4.0 million related to the allowance for credit losses (ACL) and $3.4 million related to the liability for off-balance sheet credit exposures.As of June 30, 2020, the ACL was $55.6 million, or 1.55% of loans held for investment, net of unearned income, compared with $51.2 million, or 1.49%, at March 31, 2020. When adjusted for the total amount of PPP loans, the ACL as a percentage of loans held for investment, net of unearned income increased to 1.70% as of June 30, 2020. The increase in the ACL was due to the continued deterioration in current and forecasted economic conditions from the first quarter of 2020, largely as a result of the COVID-19 pandemic.  As of June 30, 2020, the liability for off-balance sheet credit losses was $4.2 million as compared to $5.8 million as of March 31, 2020 and was included in 'Other liabilities' on the balance sheet. The reduction in this liability from the prior quarter-end was primarily due to lower expected line utilization.DepositsThe following table presents the composition of our deposit portfolio as of the dates indicated: June 30, March 31, June 30, Deposit Composition2020 2020 2019  (In thousands) Noninterest bearing deposits$867,637   $637,127   $647,078   Interest checking deposits1,153,697   995,762   762,530   Money market deposits811,368   793,482   1,019,886   Savings deposits463,262   404,100   356,328   Total non-maturity deposits3,295,964   2,830,471   2,785,822   Time deposits of $250,000 and under656,723   688,409   678,752   Time deposits over $250,000312,748   340,964   260,898   Total time deposits969,471   1,029,373   939,650   Total deposits$4,265,435   $3,859,844   $3,725,472   CREDIT QUALITYThe following table presents selected loan credit quality metrics as of the dates indicated: June 30, March 31, June 30, Credit Quality Metrics2020 2020 2019  (dollars in thousands) Nonaccrual loans held for investment$41,303   $43,973   $30,875   Accruing loans contractually past due 90 days or more3,238   303   947   Total nonperforming loans(1)44,541   44,276   31,822   Foreclosed assets, net965   968   4,922   Total nonperforming assets (1)$45,506   $45,244   $36,744   Allowance for credit losses55,644   51,187   28,691   Credit loss expense related to loans (for the quarter)6,324   19,322   696   Net charge-offs (for the quarter)1,867   1,198   1,657   Net charge-offs to average loans held for investment (for the quarter, annualized)0.21 % 0.14 % 0.21 % ACL to loans held for investment, net of unearned income1.55 % 1.49 % 0.81 % ACL to loans held for investment, net of unearned income (adjusted)(2)1.70 % 1.49 % 0.81 % ACL to nonaccrual loans held for investment, net of unearned income134.72 % 116.41 % 92.93 % Nonaccrual loans held for investment to loans held for investment, net of unearned income1.15 % 1.28 % 0.87 %        (1) Starting in the second quarter of 2020, performing troubled debt restructured loans held for investment are no longer considered nonperforming loans or nonperforming assets. Prior period credit quality metrics have been adjusted to exclude these loans. (2) Loans held for investment, net of unearned income was adjusted for the total amount of PPP loans.  Non-GAAP Measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. "Monitoring of our loan portfolio increased significantly and we believe our ACL, at 1.55% (1.70% excluding PPP loans) sits in a strong position," stated Mr. Funk.CAPITALEffective March 31, 2020, we elected the 5-year phase-in option allowed under the interim final rule (IFR) recently issued by the federal banking regulatory agencies that delays the estimated impact on regulatory capital stemming from the implementation of CECL. The IFR allows the add back of 100% of the capital effect from the day one CECL transition adjustment and 25% of the capital effect from subsequent increases in the allowance for credit losses through the two-year period ending December 31, 2021. This cumulative amount will then be reduced from capital over the subsequent three-year period.The following table presents the regulatory capital ratios of the Company and its banking subsidiary as of the dates indicated: June 30, March 31, June 30, Regulatory Capital Ratios2020 2020 2019 MidWestOne Financial Group, Inc. Consolidated      Common equity tier 1 capital ratio(1)9.48 % 9.25 % 8.76 % Tier 1 capital ratio(1)10.48 % 10.25 % 9.76 % Total capital ratio(1)11.72 % 11.48 % 10.60 % Tier 1 leverage ratio(1)8.72 % 9.39 % 8.98 % MidWestOne Bank      Common equity tier 1 capital ratio(1)11.34 % 10.95 % 10.15 % Tier 1 capital ratio(1)11.34 % 10.95 % 10.15 % Total capital ratio(1)12.47 % 12.03 % 10.84 % Tier 1 leverage ratio(1)9.39 % 10.03 % 9.34 % (1) Capital ratios for June 30, 2020 are preliminary      CORPORATE UPDATEShare Repurchase ProgramAt June 30, 2020, the total amount available under the Company's current share repurchase program was $6.4 million. In light of the economic uncertainty, the Company has yet to resume share repurchases since discontinuing them in mid-March of 2020.   Len Devaisher Named President and Chief Operating OfficerOn July 6, 2020, following an extensive national search, the Company announced the appointment of Len Devaisher as President and Chief Operating Officer of the Company and MidWestOne Bank, effective July 27, 2020. Mr. Devaisher was most recently Vice President of Resource Development with the United Way of Dane County. Prior to that, he served Old National Bank as the Chief Executive Officer for the Wisconsin Region. Mr. Devaisher has focused expertise in commercial banking, corporate profitability, and business development that will be valuable to the Company.Subordinated Debenture OfferingOn July 28, 2020, the Company completed the private placement of $65.0 million of its subordinated notes with registration rights. The 5.75% fixed-to-floating rate subordinated notes are due July 2030. For regulatory capital purposes, the subordinated notes have been structured to qualify initially as Tier 2 Capital for the Company.Cash Dividend AnnouncementOn July 29, 2020, the Company’s board of directors declared a quarterly cash dividend of $0.22 per common share. The dividend is payable September 15, 2020, to shareholders of record at the close of business on September 1, 2020.Branch ConsolidationEffective October 28, 2020, the Company plans to consolidate its branch office in Newport, Minnesota into its nearby branch office in South St. Paul, Minnesota. This branch consolidation is part of the Company's strategy to improve operating efficiency. The Company estimates the branch consolidation will reduce its annual operating expenses by approximately $360 thousand.CONFERENCE CALL DETAILSThe Company will host a conference call for investors at 11:00 a.m. CT on Friday, July 31, 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 October 31, 2020, by calling 877-344-7529 and using the replay access code of 10136661. A transcript of the call will also be available on the Company’s web site (www.midwestonefinancial.com) within three business days of the call.EARNINGS CALL PRESENTATIONThe Company has prepared presentation materials that management intends to use during its second quarter 2020 conference call on July 31, 2020. These materials have been furnished to the U.S. Securities and Exchange Commission in a Form 8-K concurrently with this press release, and are also available on the Company's website at www.midwestonefinancial.com.ABOUT MIDWESTONE FINANCIAL GROUP, INC.MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWestOne is the parent company of MidWestOne Bank, which operates banking offices in Iowa, Minnesota, Wisconsin, Florida, and Colorado. MidWestOne provides electronic delivery of financial services through its website, MidWestOne.bank. MidWestOne Financial Group, Inc. trades on the Nasdaq Global Select Market under the symbol “MOFG”.Cautionary Note Regarding Forward-Looking Statements This release contains certain “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We and our representatives may, from time to time, make written or oral statements that are “forward-looking” and provide information other than historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. These factors include, among other things, the factors listed below. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “should,” “could,” “would,” “plans,” “goals,” “intend,” “project,” “estimate,” “forecast,” “may” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Additionally, we undertake no obligation to update any statement in light of new information or future events, except as required under federal securities law.Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have an impact on our ability to achieve operating results, growth plan goals and future prospects include, but are not limited to, the following: (1) effects of the COVID-19 pandemic, including its potential effects on the economic environment, our customers and our operations, as well as any changes to federal, state, or local government laws, regulations, or orders in connection with the pandemic; (2) government intervention in the U.S. financial system in response to the COVID-19 pandemic, including the effects of recent legislative, tax, accounting and regulatory actions and reforms including the Coronavirus Aid, Relief, and Economic Security Act; (3) the impact of the COVID-19 pandemic on our financial results, including possible lost revenue and increased expenses (including the cost of capital), as well as possible goodwill impairment charges; (4) credit quality deterioration or pronounced and sustained reduction in real estate market values causing an increase in the allowance for credit losses, an increase in the credit loss expense, and a reduction in net earnings; (5) the effects of interest rates, including on our net income and the value of our securities portfolio; (6) changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing; (7) fluctuations in the value of our investment securities; (8) governmental monetary and fiscal policies; (9) changes in benchmark interest rates used to price loans and deposits, including the expected elimination of LIBOR; (10) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators; (11) the ability to attract and retain key executives and employees experienced in banking and financial services; (12) the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio; (13) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (14) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (15) the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds, financial technology companies, and other financial institutions operating in our markets or elsewhere or providing similar services; (16) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (17) the risks of mergers, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; (18) volatility of rate-sensitive deposits; (19) operational risks, including data processing system failures or fraud; (20) asset/liability matching risks and liquidity risks; (21) the costs, effects and outcomes of existing or future litigation; (22) changes in general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business; (23) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board, such as the implementation of CECL; (24) war or terrorist activities, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (25) the effects of cyber-attacks; (26) the imposition of tariffs or other domestic or international governmental policies impacting the value of the agricultural or other products of our borrowers; and (27) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company. MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS  June 30, March 31, December 31,  2020 2020 2019  (In thousands) ASSETS      Cash and due from banks$65,863    $60,396    $67,174    Interest earning deposits in banks45,018    58,319    6,112    Federal funds sold6,329    6,830    198    Total cash and cash equivalents117,210    125,545    73,484    Debt securities available for sale at fair value1,187,455    881,859    785,977    Loans held for sale12,048    9,483    5,400    Gross loans held for investment3,618,675    3,440,907    3,469,236    Unearned income, net(21,636)  (15,145)  (17,970)  Loans held for investment, net of unearned income3,597,039    3,425,762    3,451,266    Allowance for credit losses(55,644)  (51,187)  (29,079)  Total loans held for investment, net3,541,395    3,374,575    3,422,187    Premises and equipment, net88,929    89,860    90,723    Goodwill93,977    93,977    91,918    Other intangible assets, net28,443    30,190    32,218    Foreclosed assets, net965    968    3,706    Other assets160,541    157,452    147,960    Total assets$5,230,963    $4,763,909    $4,653,573    LIABILITIES      Noninterest bearing deposits$867,637    $637,127    $662,209    Interest bearing deposits3,397,798    3,222,717    3,066,446    Total deposits4,265,435    3,859,844    3,728,655    Short-term borrowings162,224    129,489    139,349    Long-term debt189,973    209,874    231,660    Other liabilities92,550    64,138    44,927    Total liabilities4,710,182    4,263,345    4,144,591    SHAREHOLDERS' EQUITY      Common stock16,581    16,581    16,581    Additional paid-in capital299,542    299,412    297,390    Retained earnings198,382    190,212    201,105    Treasury stock(12,272)  (12,518)  (10,466)  Accumulated other comprehensive income18,548    6,877    4,372    Total shareholders' equity520,781    500,564    508,982    Total liabilities and shareholders' equity$5,230,963    $4,763,909    $4,653,573    MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME   Three Months Ended Six Months Ended   June 30, March 31, June 30, June 30,   2020 2020 2019 2020 2019   (In thousands, except per share data) Interest income           Loans, including fees $40,214   $42,012    $40,053   $82,226   $69,088   Taxable investment securities 4,646   3,717    3,289   8,363   6,216   Tax-exempt investment securities 1,858   1,512    1,424   3,370   2,830   Other 40   164    185   204   205   Total interest income 46,758   47,405    44,951   94,163   78,339   Interest expense           Deposits 6,409   7,949    7,743   14,358   13,438   Short-term borrowings 263   334    500   597   957   Long-term debt 1,374   1,716    1,876   3,090   3,136   Total interest expense 8,046   9,999    10,119   18,045   17,531   Net interest income 38,712   37,406    34,832   76,118   60,808   Credit loss expense 4,685   21,733    696   26,418   2,290   Net interest income after credit loss expense 34,027   15,673    34,136   49,700   58,518   Noninterest income           Investment services and trust activities 2,217   2,536    1,890   4,753   3,280   Service charges and fees 1,290   1,826    1,870   3,116   3,312   Card revenue 1,237   1,365    1,799   2,602   2,797   Loan revenue 1,910   1,123    648   3,033   1,041   Bank-owned life insurance 635   520    470   1,155   862   Insurance commissions —   —    314   —   734   Investment securities gains, net 6   42    32   48   49   Other 974   2,743    1,773   3,717   2,131   Total noninterest income 8,269   10,155    8,796   18,424   14,206   Noninterest expense           Compensation and employee benefits 15,682   16,617    16,409   32,299   28,988   Occupancy expense of premises, net 2,253   2,341    2,127   4,594   4,006   Equipment 2,010   1,880    1,914   3,890   3,285   Legal and professional 1,382   1,535    3,291   2,917   4,256   Data processing 1,240   1,354    1,008   2,594   1,853   Marketing 910   1,062    869   1,972   1,475   Amortization of intangibles 1,748   2,028    930   3,776   1,382   FDIC insurance 445   448    434   893   804   Communications 449   457    377   906   719   Foreclosed assets, net 34   138    84   172   142   Other 1,885   2,141    1,597   4,026   2,747   Total noninterest expense 28,038   30,001    29,040   58,039   49,657   Income (loss) before income tax expense (benefit) 14,258   (4,173)  13,892   10,085   23,067   Income tax expense (benefit) 2,546   (2,198)  3,218   348   5,108   Net income (loss) $11,712   $(1,975)  $10,674   $9,737   $17,959               Earnings (loss) per common share           Basic $0.73   $(0.12)  $0.72   $0.60   $1.33   Diluted $0.73   $(0.12)  $0.72   $0.60   $1.33   Weighted average basic common shares outstanding 16,094   16,142    14,894   16,118   13,537   Weighted average diluted common shares outstanding 16,100   16,142    14,900   16,125   13,545   Dividends paid per common share $0.2200   $0.2200    $0.2025   $0.44   $0.405   MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES FIVE QUARTER CONSOLIDATED BALANCE SHEETS  June 30, March 31, December 31, September 30, June 30,  2020 2020 2019 2019 2019  (In thousands) ASSETS          Cash and due from banks$65,863    $60,396    $67,174    $79,776    $72,801    Interest earning deposits in banks45,018    58,319    6,112    6,413    47,708    Federal funds sold6,329    6,830    198    478    —    Total cash and cash equivalents117,210    125,545    73,484    86,667    120,509    Debt securities available for sale at fair value1,187,455    881,859    785,977    503,278    460,302    Held to maturity securities at amortized cost—    —    —    190,309    193,173    Total securities held for investment1,187,455    881,859    785,977    693,587    653,475    Loans held for sale12,048    9,483    5,400    7,906    4,306    Gross loans held for investment3,618,675    3,440,907    3,469,236    3,545,993    3,569,236    Unearned income, net(21,636)  (15,145)  (17,970)  (21,265)  (32,733)  Loans held for investment, net of unearned income3,597,039    3,425,762    3,451,266    3,524,728    3,536,503    Allowance for credit losses(55,644)  (51,187)  (29,079)  (31,532)  (28,691)  Total loans held for investment, net3,541,395    3,374,575    3,422,187    3,493,196    3,507,812    Premises and equipment, net88,929    89,860    90,723    91,190    93,395    Goodwill93,977    93,977    91,918    93,258    93,376    Other intangible assets, net28,443    30,190    32,218    33,635    36,624    Foreclosed assets, net965    968    3,706    4,366    4,922    Other assets160,541    157,452    147,960    144,482    148,044    Total assets$5,230,963    $4,763,909    $4,653,573    $4,648,287    $4,662,463    LIABILITIES          Noninterest bearing deposits$867,637    $637,127    $662,209    $673,777    $647,078    Interest bearing deposits3,397,798    3,222,717    3,066,446    3,035,935    3,078,394    Total deposits4,265,435    3,859,844    3,728,655    3,709,712    3,725,472    Short-term borrowings162,224    129,489    139,349    155,101    153,829    Long-term debt189,973    209,874    231,660    244,677    252,673    Other liabilities92,550    64,138    44,927    40,912    42,138    Total liabilities4,710,182    4,263,345    4,144,591    4,150,402    4,174,112    SHAREHOLDERS' EQUITY          Common stock16,581    16,581    16,581    16,581    16,581    Additional paid-in capital299,542    299,412    297,390    297,144    296,879    Retained earnings198,382    190,212    201,105    191,007    181,984    Treasury stock(12,272)  (12,518)  (10,466)  (9,933)  (8,716)  Accumulated other comprehensive income18,548    6,877    4,372    3,086    1,623    Total shareholders' equity520,781    500,564    508,982    497,885    488,351    Total liabilities and shareholders' equity$5,230,963    $4,763,909    $4,653,573    $4,648,287    $4,662,463    MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME  Three Months Ended  June 30, March 31, December 31, September 30, June 30,  2020 2020 2019 2019 2019  (In thousands, except per share data) Interest income          Loans, including fees$40,214   $42,012    $44,906    $49,169    $40,053   Taxable investment securities4,646   3,717    3,540    3,376    3,289   Tax-exempt investment securities1,858   1,512    1,465    1,401    1,424   Other40   164    115    130    185   Total interest income46,758   47,405    50,026    54,076    44,951   Interest expense          Deposits6,409   7,949    8,251    8,238    7,743   Short-term borrowings263   334    368    522    500   Long-term debt1,374   1,716    1,823    2,058    1,876   Total interest expense8,046   9,999    10,442    10,818    10,119   Net interest income38,712   37,406    39,584    43,258    34,832   Credit loss expense4,685   21,733    604    4,264    696   Net interest income after credit loss expense34,027   15,673    38,980    38,994    34,136   Noninterest income          Investment services and trust activities2,217   2,536    2,421    2,339    1,890   Service charges and fees1,290   1,826    2,072    2,068    1,870   Card revenue1,237   1,365    1,142    1,655    1,799   Loan revenue1,910   1,123    1,757    991    648   Bank-owned life insurance635   520    501    514    470   Insurance commissions—   —    —    —    314   Investment securities gains, net6   42    18    23    32   Other974   2,743    1,125    414    1,773   Total noninterest income8,269   10,155    9,036    8,004    8,796   Noninterest expense          Compensation and employee benefits15,682   16,617    19,246    17,426    16,409   Occupancy expense of premises, net2,253   2,341    2,347    2,294    2,127   Equipment2,010   1,880    2,251    2,181    1,914   Legal and professional1,382   1,535    1,797    1,996    3,291   Data processing1,240   1,354    1,492    1,234    1,008   Marketing910   1,062    1,147    1,167    869   Amortization of intangibles1,748   2,028    1,941    2,583    930   FDIC insurance445   448    (72)  (42)  434   Communications449   457    493    489    377   Foreclosed assets, net34   138    173    265    84   Other1,885   2,141    5,621    1,849    1,597   Total noninterest expense28,038   30,001    36,436    31,442    29,040   Income (loss) before income tax expense (benefit)14,258   (4,173)  11,580    15,556    13,892   Income tax expense (benefit)2,546   (2,198)  (1,791)  3,256    3,218   Net income (loss)$11,712   $(1,975)  $13,371    $12,300    $10,674              Earnings (loss) per common share          Basic$0.73   $(0.12)  $0.83    $0.76    $0.72   Diluted$0.73   $(0.12)  $0.83    $0.76    $0.72   Weighted average basic common shares outstanding16,094   16,142    16,162    16,201    14,894   Weighted average diluted common shares outstanding16,100   16,142    16,193    16,215    14,900   Dividends paid per common share$0.2200   $0.2200    $0.2025    $0.2025    $0.2025   MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES AVERAGE BALANCE SHEET AND YIELD ANALYSIS Three Months Ended  June 30, 2020 March 31, 2020 June 30, 2019  Average Balance Interest Income/ Expense Average Yield/ Cost Average Balance Interest Income/ Expense Average Yield/ Cost Average Balance Interest Income/ Expense Average Yield/ Cost  (Dollars in thousands) ASSETS                  Loans, including fees (1)(2)(3)$3,633,695   $40,721   4.51 % $3,436,263   $42,509   4.98 % $3,183,138   $40,495   5.10 % Taxable investment securities731,699   4,646   2.55 % 567,001   3,717   2.64 % 458,438   3,289   2.88 % Tax-exempt investment securities (2)(4)285,758   2,340   3.29 % 224,171   1,907   3.42 % 203,179   1,794   3.54 % Total securities held for investment(2)1,017,457   6,986   2.76 % 791,172   5,624   2.86 % 661,617   5,083   3.08 % Other67,429   40   0.24 % 55,833   164   1.18 % 36,031   185   2.06 % Total interest earning assets(2)$4,718,581   47,747   4.07 % $4,283,268   48,297   4.54 % $3,880,786   45,763   4.73 % Other assets380,266       386,456       349,661       Total assets$5,098,847       $4,669,724       $4,230,447       LIABILITIES AND SHAREHOLDERS’ EQUITY                  Interest checking deposits$1,091,565   $1,113   0.41 % $965,077   $1,316   0.55 % $731,973   $1,021   0.56 % Money market deposits829,826   885   0.43 % 766,766   1,645   0.86 % 880,973   2,491   1.13 % Savings deposits439,592   365   0.33 % 393,833   391   0.40 % 328,694   182   0.22 % Time deposits990,797   4,046   1.64 % 997,136   4,597   1.85 % 874,619   4,049   1.86 % Total interest bearing deposits3,351,780   6,409   0.77 % 3,122,812   7,949   1.02 % 2,816,259   7,743   1.10 % Short-term borrowings159,157   263   0.66 % 121,942   334   1.10 % 123,586   500   1.62 % Long-term debt201,240   1,374   2.75 % 225,587   1,716   3.06 % 229,152   1,876   3.28 % Total borrowed funds360,397   1,637   1.83 % 347,529   2,050   2.37 % 352,738   2,376   2.70 % Total interest bearing liabilities$3,712,177   $8,046   0.87 % $3,470,341   $9,999   1.16 % $3,168,997   $10,119   1.28 % Noninterest bearing deposits813,794       637,204       574,720       Other liabilities61,637       47,010       43,616       Shareholders’ equity511,239       515,169       443,114       Total liabilities and shareholders’ equity$5,098,847       $4,669,724       $4,230,447       Net interest income(2)  $39,701       $38,298       $35,644     Net interest spread(2)    3.20 %     3.38 %     3.45 % Net interest margin(2)    3.38 %     3.60 %     3.68 %                    Total deposits(5)$4,165,574   $6,409   0.62 % $3,760,016   $7,949   0.85 % $3,390,979   $7,743   0.92 % Cost of funds(6)    0.72 %     0.98 %     1.08 % (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 $748 thousand, $(122) thousand, and $(202) thousand for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, respectively. Loan purchase discount accretion was $2.6 million, $3.0 million, and $2.2 million for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, respectively. Tax equivalent adjustments were $507 thousand, $497 thousand, and $442 thousand for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, respectively. The federal statutory tax rate utilized was 21%.(4) Interest income includes tax equivalent adjustments of $482 thousand, $395 thousand, and $370 thousand for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, respectively. The federal statutory tax rate utilized was 21%.(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.  Six Months Ended  June 30, 2020 June 30, 2019  Average Balance Interest Income/ Expense Average Yield/ Cost Average Balance Interest Income/ Expense Average Yield/ Cost  (Dollars in thousands) ASSETS            Loans, including fees (1)(2)(3)$3,534,979   $83,230   4.73 % $2,798,526   $69,803   5.03 % Taxable investment securities648,678   8,363   2.59 % 436,832   6,216   2.87 % Tax-exempt investment securities (2)(4)254,963   4,247   3.35 % 202,606   3,566   3.55 % Total securities held for investment(2)903,641   12,610   2.81 % 639,438   9,782   3.08 % Other62,304   204   0.66 % 19,633   205   2.11 % Total interest earning assets(2)$4,500,924   96,044   4.29 % $3,457,597   79,790   4.65 % Other assets383,361       310,132       Total assets$4,884,285       $3,767,729       LIABILITIES AND SHAREHOLDERS’ EQUITY            Interest checking deposits$1,028,321   $2,428   0.47 % $698,654   $1,931   0.56 % Money market deposits798,296   2,530   0.64 % 746,339   3,825   1.03 % Savings deposits416,713   756   0.36 % 267,068   240   0.18 % Time deposits993,966   8,644   1.75 % 800,109   7,442   1.88 % Total interest bearing deposits3,237,296   14,358   0.89 % 2,512,170   13,438   1.08 % Short-term borrowings140,550   597   0.85 % 116,795   957   1.65 % Long-term debt213,413   3,090   2.91 % 204,471   3,136   3.09 % Total borrowed funds353,963   3,687   2.09 % 321,266   4,093   2.57 % Total interest bearing liabilities$3,591,259   $18,045   1.01 % $2,833,436   $17,531   1.25 % Noninterest bearing deposits725,499       498,733       Other liabilities54,323       34,070       Shareholders’ equity513,204       401,490       Total liabilities and shareholders’ equity$4,884,285       $3,767,729       Net interest income(2)  $77,999       $62,259     Net interest spread(2)    3.28 %     3.40 % Net interest margin(2)    3.48 %     3.63 %              Total deposits(5)$3,962,795   $14,358   0.73 % $3,010,903   $13,438   0.90 % Cost of funds(6)    0.84 %     1.06 % (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 $626 thousand and $(317) thousand for the six months ended June 30, 2020 and June 30, 2019, respectively. Loan purchase discount accretion was $5.6 million and $2.8 million for the six months ended June 30, 2020 and June 30, 2019, respectively. Tax equivalent adjustments were $1.0 million and $715 thousand for the six months ended June 30, 2020 and June 30, 2019, respectively. The federal statutory tax rate utilized was 21%.(4) Interest income includes tax equivalent adjustments of $877 thousand and $736 thousand for the six months ended June 30, 2020 and June 30, 2019, respectively. The federal statutory tax rate utilized was 21%.(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.Non-GAAP Measures This earnings release contains non-GAAP measures for tangible common equity, tangible book value per share, tangible common equity ratio, return on average tangible equity, net interest margin (tax equivalent), core net interest margin, loan yield (tax equivalent), efficiency ratio, pre-tax pre-provision net revenue, and ACL to adjusted loans held for investment, net of unearned income. 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 June 30, March 31, December 31, September 30, June 30,  2020 2020 2019 2019 2019   (Dollars in thousands, except per share data) Total shareholders’ equity $520,781    $500,564    $508,982    $497,885    $488,351    Intangible assets, net (122,420)  (124,167)  (124,136)  (126,893)  (130,000)  Tangible common equity $398,361    $376,397    $384,846    $370,992    $358,351                Total assets $5,230,963    $4,763,909    $4,653,573    $4,648,287    $4,662,463    Intangible assets, net (122,420)  (124,167)  (124,136)  (126,893)  (130,000)  Tangible assets $5,108,543    $4,639,742    $4,529,437    $4,521,394    $4,532,463                Book value per share $32.35    $31.11    $31.49    $30.77    $30.11    Tangible book value per share(1) $24.74    $23.39    $23.81    $22.93    $22.09    Shares outstanding 16,099,324    16,089,782    16,162,176    16,179,734    16,221,160                Equity to assets ratio 9.96  % 10.51  % 10.94  % 10.71  % 10.47  % Tangible common equity ratio(2) 7.80  % 8.11  % 8.50  % 8.21  % 7.91  % (1) Tangible common equity divided by shares outstanding. (2) Tangible common equity divided by tangible assets.  For the Three Months Ended Six Months Ended Return on Average Tangible Equity June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019   (Dollars in thousands) Net income (loss) $11,712    $(1,975)  $10,674    $9,737    $17,959    Intangible amortization, net of tax(1) 1,311    1,521    698    2,832    1,037    Tangible net income (loss) $13,023    $(454)  $11,372    $12,569    $18,996                Average shareholders’ equity $511,239    $515,169    $443,114    $513,204    $401,490    Average intangible assets, net (123,313)  (122,948)  (102,919)  (123,130)  (88,633)  Average tangible equity $387,926    $392,221    $340,195    $390,074    $312,857                Return on average equity 9.21  % (1.54)% 9.66  % 3.82  % 9.02  % Return on average tangible equity(2) 13.50  % (0.47)% 13.41  % 6.48  % 12.24  % (1) The combined income tax rate utilized was 25%. (2) Annualized tangible net (loss) income divided by average tangible equity.  For the Three Months Ended Six Months Ended Net Interest Margin, Tax Equivalent/ Core Net Interest Margin June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019   (Dollars in thousands) Net interest income $38,712    $37,406    $34,832    $76,118    $60,808    Tax equivalent adjustments:           Loans(1) 507    497    442    1,004    715    Securities(1) 482    395    370    877    736    Net interest income, tax equivalent $39,701    $38,298    $35,644    $77,999    $62,259    Loan purchase discount accretion (2,610)  (3,023)  (2,246)  (5,633)  (2,832)  Core net interest income $37,091    $35,275    $33,398    $72,366    $59,427                Net interest margin 3.30  % 3.51  % 3.60  % 3.40  % 3.55  % Net interest margin, tax equivalent(2) 3.38  % 3.60  % 3.68  % 3.48  % 3.63  % Core net interest margin(3) 3.16  % 3.31  % 3.45  % 3.23  % 3.47  % Average interest earning assets $4,718,581    $4,283,268    $3,880,786    $4,500,924    $3,457,597    (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.  For the Three Months Ended Six Months Ended Loan Yield, Tax Equivalent June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019   (Dollars in thousands) Loan interest income, including fees $40,214    $42,012    $40,053    $82,226    $69,088    Tax equivalent adjustment(1) 507    497    442    1,004    715    Tax equivalent loan interest income $40,721    $42,509    $40,495    $83,230    $69,803    Loan purchase discount accretion (2,610)  (3,023)  (2,246)  (5,633)  (2,833)  Core loan interest income $38,111    $39,486    $38,249    $77,597    $66,970                Yield on loans 4.45  % 4.92  % 5.05  % 4.68  % 4.98  % Yield on loans, tax equivalent(2) 4.51  % 4.98  % 5.10  % 4.73  % 5.03  % Core yield on loans(3) 4.22  % 4.62  % 4.82  % 4.41  % 4.83  % Average loans $3,633,695    $3,436,263    $3,183,138    $3,534,979    $2,798,526    (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.  For the Three Months Ended Six Months Ended Efficiency Ratio June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019   (Dollars in thousands) Total noninterest expense $28,038    $30,001    $29,040    $58,039    $49,657    Amortization of intangibles (1,748)  (2,028)  (930)  (3,776)  (1,382)  Merger-related expenses (7)  (54)  (3,134)  (61)  (3,301)  Noninterest expense used for efficiency ratio $26,283    $27,919    $24,976    $54,202    $44,974                Net interest income, tax equivalent(1) $39,701    $38,298    $35,644    $77,999    $62,259    Noninterest income 8,269    10,155    8,796    18,424    14,206    Investment securities gains, net (6)  (42)  (32)  (48)  (49)  Net revenues used for efficiency ratio $47,964    $48,411    $44,408    $96,375    $76,416                Efficiency ratio 54.80  % 57.67  % 56.24  % 56.24  % 58.85  % (1) The federal statutory tax rate utilized was 21%.  For the Three Months Ended Six Months Ended Pre-tax Pre-provision Net Revenue June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019   (Dollars in thousands) Net interest income $38,712    $37,406    $34,832    $76,118    $60,808    Noninterest income 8,269    10,155    8,796    18,424    14,206    Noninterest expense (28,038)  (30,001)  (29,040)  (58,039)  (49,657)  Pre-tax Pre-provision Net Revenue $18,943    $17,560    $14,588    $36,503    $25,357      June 30, March 31, June 30,  ACL / Loans Held for Investment, Net of Unearned Income 2020 2020 2019    (Dollars in thousands) Loans held for investment, net of unearned income $3,597,039   $3,425,762   $3,536,503    PPP loans 327,648   —   —    Adjusted loans held for investment, net of unearned income $3,269,391   $3,425,762   $3,536,503    Allowance for credit losses $55,644   $51,187   $28,691             ACL to adjusted loans held for investment, net of unearned income 1.70 % 1.49 % 0.81 %  Contact:    Charles N. Funk Barry S. Ray  President and Chief Executive Officer Senior Executive Vice President and Chief Financial Officer  319.356.5800 319.356.5800