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MidWestOne Financial Group, Inc. Reports Financial Results for the Fourth Quarter and Full Year of 2024
Source: Nasdaq GlobeNewswire / 23 Jan 2025 16:15:01 America/New_York
IOWA CITY, Iowa, Jan. 23, 2025 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported results for the fourth quarter and full year of 2024.
Fourth Quarter 2024 Summary1
- Net income of $16.3 million, or $0.78 per diluted common share.
- Return on average assets of 1.03%.
- Net interest margin (tax equivalent) was 3.43%;2 Core net interest margin expanded 85 bps to 3.26%.2
- Efficiency ratio improved to 59.06%2 from 70.32%2 in the linked quarter.
- Noninterest bearing deposits and core deposits increased 3.7% and 2.3%, respectively.
- Classified loan ratio improved 54 bps to 2.57%; nonperforming assets ratio remained stable at 0.40%; net charge-off ratio was 0.06%.
- Common equity tier 1 ("CET1") ratio improved 82 bps to 10.73%.
Full Year 2024 Summary1
- Noninterest bearing deposits and core deposits increased 6.1% and 3.9%, respectively.
- Investment services and trust activities revenue increased 15.9% to $14.2 million.
- CET1 ratio improved 114 bps to 10.73%.
- Classified loan ratio improved 150 bps to 2.57%; nonperforming assets ratio improved 7 bps to 0.40%; net charge-off ratio was 0.07%.
- Completed a common equity capital raise, resulting in net proceeds to the Company of $118.6 million to facilitate a balance sheet repositioning.
CEO Commentary
Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, “We are pleased with our fourth quarter results which highlight the successful execution of our balance sheet repositioning, as well as the continued momentum of our strategic initiatives. Return on average assets eclipsed the 1.0% threshold, driven by significant expansion of our net interest margin, thus net interest income. Our core deposit franchise expanded, with noninterest bearing deposits increasing for the second consecutive quarter, reflecting our Treasury Management initiatives and strong branch network. Our Wealth Management focus, including our Investment Services and Private Wealth teams, continues to bear fruit as revenue increased 16% year-over-year. In addition, asset quality metrics improved from the third quarter, as the classified loans ratio improved 54 bps and the charge-off ratio was only 0.06%."
Mr. Reeves continued, "2024 was an outstanding year of transformation and execution for MidWestOne. As we enter 2025, we are well positioned to become a consistent, high performing organization for the benefit of our stakeholders.”
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1 Fourth Quarter Summary compares to the third quarter of 2024 (the "linked quarter") unless noted. Full Year 2024 Summary compares to the full year 2023 unless noted.
2 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.As of or for the quarter ended Year Ended (Dollars in thousands, except per share amounts and as noted) December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023 Financial Results Revenue $ 59,775 $ (92,867 ) $ 36,421 $ 69,290 $ 162,595 Credit loss expense 1,291 1,535 1,768 8,782 5,849 Noninterest expense 37,372 35,798 32,131 144,496 131,913 Net income (loss) 16,330 (95,707 ) 2,730 (60,289 ) 20,859 Adjusted earnings(3) 16,112 9,141 7,265 37,954 35,311 Per Common Share Diluted earnings (loss) per share $ 0.78 $ (6.05 ) $ 0.17 $ (3.54 ) $ 1.33 Adjusted earnings per share(3) 0.77 0.58 0.46 2.23 2.25 Book value 26.94 27.06 33.41 26.94 33.41 Tangible book value(3) 22.37 22.43 27.90 22.37 27.90 Balance Sheet & Credit Quality Loans In millions $ 4,315.6 $ 4,328.8 $ 4,126.9 $ 4,315.6 $ 4,126.9 Investment securities In millions 1,328.4 1,623.1 1,870.3 1,328.4 1,870.3 Deposits In millions 5,478.0 5,368.7 5,395.7 5,478.0 5,395.7 Net loan charge-offs In millions 0.7 1.7 2.1 3.1 3.7 Allowance for credit losses ratio 1.28 % 1.25 % 1.25 % 1.28 % 1.25 % Selected Ratios Return on average assets 1.03 % (5.78 )% 0.17 % (0.92 )% 0.32 % Net interest margin, tax equivalent(3) 3.43 % 2.51 % 2.22 % 2.66 % 2.46 % Return on average equity 11.53 % (69.05 )% 2.12 % (11.08 )% 4.12 % Return on average tangible equity(3) 14.80 % (82.78 )% 3.57 % (12.45 )% 6.14 % Efficiency ratio(3) 59.06 % 70.32 % 70.16 % 63.44 % 67.28 % REVENUE REVIEW
Revenue Change Change 4Q24 vs 4Q24 vs (Dollars in thousands) 4Q24 3Q24 4Q23 3Q24 4Q23 Net interest income $ 48,938 $ 37,521 $ 32,559 30 % 50 % Noninterest income (loss) 10,837 (130,388 ) 3,862 n/m 181 % Total revenue, net of interest expense $ 59,775 $ (92,867 ) $ 36,421 n/m 64 % (n/m) - Not meaningful Total revenue for the fourth quarter of 2024 increased $152.6 million from the third quarter of 2024 and increased $23.4 million compared to the fourth quarter of 2023, due to higher net interest income and higher noninterest income. Excluding the pre-tax securities loss of $140.4 million that was recorded in the third quarter of 2024 in connection with balance sheet repositioning efforts, total revenue increased $12.3 million from the linked quarter.
Net interest income of $48.9 million for the fourth quarter of 2024 increased $11.4 million from the third quarter of 2024, due to higher earning asset yields and lower funding volumes and costs, partially offset by lower earning asset volumes. When compared to the fourth quarter of 2023, net interest income increased $16.4 million, due to higher earning asset yields and lower funding volumes and costs, partially offset by lower earning asset volumes.
The Company's tax equivalent net interest margin was 3.43%3 in the fourth quarter of 2024, compared to 2.51%3 in the third quarter of 2024, driven by higher earning asset yields and lower funding costs. Total earning assets yield during the fourth quarter of 2024 increased 60 bps from the third quarter of 2024 due primarily to an increase of 171 bps in total investment securities yields. Funding costs during the fourth quarter of 2024 decreased 35 bps to 2.52%, due to reductions of 43 bps, 23 bps and 17 bps in long-term debt, short-term borrowings and interest bearing deposit costs, to 6.48%, 4.53% and 2.41%, respectively, from the third quarter of 2024.
The Company's tax equivalent net interest margin was 3.43%3 in the fourth quarter of 2024, compared to 2.22%3 in the fourth quarter of 2023, driven by higher earning asset yields and lower funding costs. Total earning assets yield increased 106 bps from the fourth quarter of 2023, primarily due to increases of 172 bps and 52 bps in total investment securities and loan yields, respectively. Funding costs decreased 13 bps to 2.52%, due to short-term borrowing costs of 4.53% and long-term debt costs of 6.48%, which decreased 38 bps and 31 bps, respectively, from the fourth quarter of 2023.
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3 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.Noninterest Income (Loss) Change Change 4Q24 vs 4Q24 vs (In thousands) 4Q24 3Q24 4Q23 3Q24 4Q23 Investment services and trust activities $ 3,779 $ 3,410 $ 3,193 11 % 18 % Service charges and fees 2,159 2,170 2,148 (1 )% 1 % Card revenue 1,833 1,935 1,802 (5 )% 2 % Loan revenue 1,841 760 909 142 % 103 % Bank-owned life insurance 719 879 656 (18 )% 10 % Investment securities gains (losses), net 161 (140,182 ) (5,696 ) n/m n/m Other 345 640 850 (46 )% (59 )% Total noninterest income (loss) $ 10,837 $ (130,388 ) $ 3,862 n/m 181 % MSR adjustment (included above in Loan revenue) $ 164 $ (1,026 ) $ (105 ) (116 )% (256 )% (n/m) - Not meaningful Noninterest income for the fourth quarter of 2024 increased $141.2 million from the linked quarter, due primarily to the securities impairment of $140.4 million recognized in the linked quarter related to the Company's balance sheet repositioning, and increases of $1.1 million and $0.4 million in loan revenue and investment services and trust activities revenue, respectively. The increase in loan revenue stemmed from a favorable quarter-over-quarter change in the fair value of our mortgage servicing rights. The increase in investment services and trust activities revenue was driven by growth in assets under administration and transaction fees. Partially offsetting these increases in noninterest income was a decrease of $0.3 million in other revenue.
Noninterest income for the fourth quarter of 2024 increased $7.0 million from the fourth quarter of 2023, primarily due to an increases of $5.9 million, $0.9 million and $0.6 million in investment securities gains (losses), net, loan revenue, and investment services and trust activities revenue, respectively. The increase in investment securities gains (losses), net stemmed primarily from a balance sheet repositioning loss recognized in the fourth quarter of 2023. The increase in loan revenue was driven by an increase of $0.6 million in SBA gain on sale, coupled with a favorable year-over-year change in the fair value of our mortgage servicing rights. The increase in investment services and trust activities revenue was driven by growth in assets under administration and transaction fees. Partially offsetting these increases in noninterest income was a decrease of $0.5 million in other revenue, due primarily to a $0.3 million decline in swap origination fee income.
EXPENSE REVIEW
Noninterest Expense Change Change 4Q24 vs 4Q24 vs (In thousands) 4Q24 3Q24 4Q23 3Q24 4Q23 Compensation and employee benefits $ 20,684 $ 19,943 $ 17,859 4 % 16 % Occupancy expense of premises, net 2,772 2,443 2,309 13 % 20 % Equipment 2,688 2,486 2,466 8 % 9 % Legal and professional 2,534 2,261 2,269 12 % 12 % Data processing 1,719 1,580 1,411 9 % 22 % Marketing 793 619 700 28 % 13 % Amortization of intangibles 1,449 1,470 1,441 (1 )% 1 % FDIC insurance 980 923 900 6 % 9 % Communications 154 159 183 (3 )% (16 )% Foreclosed assets, net 56 330 45 (83 )% 24 % Other 3,543 3,584 2,548 (1 )% 39 % Total noninterest expense $ 37,372 $ 35,798 $ 32,131 4 % 16 % Merger-related Expenses (In thousands) 4Q24 3Q24 4Q23 Equipment $ 21 $ — $ — Legal and professional — 127 180 Data processing 10 — — Marketing — — 38 Other — 6 27 Total merger-related expenses $ 31 $ 133 $ 245 Noninterest expense for the fourth quarter of 2024 increased $1.6 million from the linked quarter, primarily due to increases in compensation and employee benefits and occupancy expense of premises, net, which increased $0.7 million and $0.3 million, respectively. The increase in compensation and employee benefits was primarily due to a $0.6 million increase in medical benefit expense compared to the linked quarter, as well as an increase in incentives and commissions. The increase in occupancy expense of premises, net was primarily driven by elevated property tax expense and building maintenance expense.
Noninterest expense for the fourth quarter of 2024 increased $5.2 million from the fourth quarter of 2023. The largest contributors to the increase in noninterest expense were compensation and employee benefits, other expense, and occupancy expense of premises, net, which increased $2.8 million, $1.0 million, and $0.5 million, respectively. The increase in compensation and employee benefits expense was primarily driven by an increase in headcount, annual compensation adjustments, incentive expense due to improved performance, and medical benefit expense. The increase in other expense was driven by an increase of $1.0 million in customer deposit expense. The increase in occupancy expense of premises, net was primarily driven by higher property tax expense, partially offset by a reduction in building rental expense, which stemmed from the sale of our Florida banking operations and the consolidation of our legacy Denver branch.
The Company's effective tax rate was 22.7% in the fourth quarter of 2024, compared to 26.5% in the linked quarter. The decrease in the effective tax rate reflected the impact of the investment security impairments that were recorded in the third quarter of 2024 related to the balance sheet repositioning. The effective income tax rate for the full year 2025 is expected to be 22-24%.
BALANCE SHEET REVIEW
Total assets were $6.24 billion at December 31, 2024, compared to $6.55 billion at September 30, 2024 and $6.43 billion at December 31, 2023. The decrease from September 30, 2024 was primarily driven by lower securities balances due to the sale of securities, with the proceeds from the sale being used to pay-off Bank Term Funding Program ("BTFP") borrowings and purchase higher yielding securities, as part of balance sheet repositioning efforts. Compared to December 31, 2023, the decrease was primarily driven by the sale of assets associated with our Florida banking operations and lower securities balances due to balance sheet repositioning transactions, partially offset by the assets acquired in the Denver Bankshares, Inc ("DNVB") acquisition, as well as higher cash and loan balances.
Loans Held for Investment December 31, 2024 September 30, 2024 December 31, 2023 Balance % of Total Balance % of Total Balance % of Total (Dollars in thousands) Commercial and industrial $ 1,126,813 26.1 % $ 1,149,758 26.6 % $ 1,075,003 26.0 % Agricultural 119,051 2.8 112,696 2.6 118,414 2.9 Commercial real estate Construction and development 324,896 7.5 386,920 8.9 323,195 7.8 Farmland 182,460 4.2 182,164 4.2 184,955 4.5 Multifamily 423,157 9.8 409,544 9.5 383,178 9.3 Other 1,414,168 32.7 1,353,513 31.2 1,333,982 32.4 Total commercial real estate 2,344,681 54.2 2,332,141 53.8 2,225,310 54.0 Residential real estate One-to-four family first liens 477,150 11.1 485,210 11.2 459,798 11.1 One-to-four family junior liens 179,232 4.2 176,827 4.1 180,639 4.4 Total residential real estate 656,382 15.3 662,037 15.3 640,437 15.5 Consumer 68,700 1.6 72,124 1.7 67,783 1.6 Loans held for investment, net of unearned income $ 4,315,627 100.0 % $ 4,328,756 100.0 % $ 4,126,947 100.0 % Total commitments to extend credit $ 1,080,737 $ 1,149,815 $ 1,210,796 Loans held for investment, net of unearned income, remained stable, reflecting a slight decrease of $13.1 million, or 0.3%, to $4.32 billion from $4.33 billion at September 30, 2024, primarily due to payoffs during the quarter.
Loans held for investment, net of unearned income, increased $188.7 million, or 4.6%, to $4.32 billion from $4.13 billion at December 31, 2023. The increase from the fourth quarter of 2023 was driven primarily by loans acquired in the DNVB transaction, organic loan growth, and higher line of credit usage. Partially offsetting these identified increases was a decline stemming from the sale of loans associated with our Florida banking operations.
Investment Securities December 31, 2024 September 30, 2024 December 31, 2023 (Dollars in thousands) Balance % of Total Balance % of Total Balance % of Total Available for sale $ 1,328,433 100.0 % $ 1,623,104 100.0 % $ 795,134 42.5 % Held to maturity — — % — — % 1,075,190 57.5 % Total investment securities $ 1,328,433 $ 1,623,104 $ 1,870,324 Investment securities at December 31, 2024 were $1.33 billion, decreasing $294.7 million from September 30, 2024 and $541.9 million from December 31, 2023. The decrease from each prior period stemmed primarily from the sale of debt securities as part of the balance sheet repositioning, as well as principal cash flows received from scheduled payments, calls, and maturities.
Deposits December 31, 2024 September 30, 2024 December 31, 2023 (Dollars in thousands) Balance % of Total Balance % of Total Balance % of Total Noninterest bearing deposits $ 951,423 17.4 % $ 917,715 17.1 % $ 897,053 16.6 % Interest checking deposits 1,258,191 22.9 1,230,605 23.0 1,320,435 24.5 Money market deposits 1,053,988 19.2 1,038,575 19.3 1,105,493 20.5 Savings deposits 820,549 15.0 768,298 14.3 650,655 12.1 Time deposits of $250 and under 826,793 15.1 844,298 15.7 752,214 13.9 Total core deposits 4,910,944 89.6 4,799,491 89.4 4,725,850 87.6 Brokered time deposits 200,000 3.7 200,000 3.7 221,039 4.1 Time deposits over $250 367,038 6.7 369,236 6.9 448,784 8.3 Total deposits $ 5,477,982 100.0 % $ 5,368,727 100.0 % $ 5,395,673 100.0 % Total deposits increased $109.3 million, or 2.0%, to $5.48 billion, from $5.37 billion at September 30, 2024. Core deposits increased $111.5 million, while noninterest bearing deposits increased $33.7 million from September 30, 2024. Total deposits increased $82.3 million, or 1.5%, from $5.40 billion at December 31, 2023, primarily due to $224.2 million of deposits assumed in the DNVB acquisition, partially offset by $133.3 million of deposits divested as part of the sale of our Florida banking operations and a decline of $21.0 million in brokered deposits.
Borrowed Funds December 31, 2024 September 30, 2024 December 31, 2023 (Dollars in thousands) Balance % of Total Balance % of Total Balance % of Total Short-term borrowings $ 3,186 2.7 % $ 410,630 78.1 % $ 300,264 70.9 % Long-term debt 113,376 97.3 % 115,051 21.9 % 123,296 29.1 % Total borrowed funds $ 116,562 $ 525,681 $ 423,560 Borrowed funds were $116.6 million at December 31, 2024, a decrease of $409.1 million from September 30, 2024 and a decrease of $307.0 million from December 31, 2023. The decrease compared to the linked quarter was primarily due to the payoff of BTFP borrowings. The decrease compared to December 31, 2023 was primarily due to the pay-off of BTFP borrowings, coupled with lower overnight borrowings from the Federal Home Loan Bank and scheduled payments on long-term debt.
Capital December 31, September 30, December 31, (Dollars in thousands) 2024(1) 2024 2023 Total shareholders' equity $ 559,696 $ 562,238 $ 524,378 Accumulated other comprehensive loss (72,762 ) (58,842 ) (64,899 ) MidWestOne Financial Group, Inc. Consolidated Tier 1 leverage to average assets ratio 9.15 % 8.78 % 8.58 % Common equity tier 1 capital to risk-weighted assets ratio 10.73 % 9.91 % 9.59 % Tier 1 capital to risk-weighted assets ratio 11.59 % 10.70 % 10.38 % Total capital to risk-weighted assets ratio 14.07 % 12.96 % 12.53 % MidWestOne Bank Tier 1 leverage to average assets ratio 10.12 % 9.69 % 9.39 % Common equity tier 1 capital to risk-weighted assets ratio 12.86 % 11.83 % 11.54 % Tier 1 capital to risk-weighted assets ratio 12.86 % 11.83 % 11.54 % Total capital to risk-weighted assets ratio 14.02 % 12.88 % 12.49 % (1)Regulatory capital ratios for December 31, 2024 are preliminary Total shareholders' equity at December 31, 2024 decreased $2.5 million from September 30, 2024, driven primarily by an increase in accumulated other comprehensive loss, partially offset by an increase in retained earnings. Total shareholders' equity at December 31, 2024 increased $35.3 million from December 31, 2023, primarily due to increases in common stock and additional paid-in-capital stemming from the common equity capital raise in the third quarter of 2024, partially offset by a decrease in retained earnings and an increase in accumulated other comprehensive loss.
On January 22, 2025, the Board of Directors of the Company declared a cash dividend of $0.2425 per common share. The dividend is payable March 17, 2025, to shareholders of record at the close of business on March 3, 2025.
No common shares were repurchased by the Company during the period September 30, 2024 through December 31, 2024 or for the subsequent period through January 23, 2025. The current share repurchase program allows for the repurchase of up to $15.0 million of the Company's common shares. As of December 31, 2024, $15.0 million remained available under this program.
CREDIT QUALITY REVIEW
Credit Quality As of or For the Three Months Ended December 31, September 30, December 31, (Dollars in thousands) 2024 2024 2023 Credit loss expense related to loans $ 1,891 $ 1,835 $ 1,968 Net charge-offs 691 1,735 2,068 Allowance for credit losses 55,200 54,000 51,500 Pass $ 4,056,361 $ 4,016,683 $ 3,846,012 Special Mention 148,462 177,241 113,029 Classified 110,804 134,832 167,906 Loans greater than 30 days past due and accruing $ 9,378 $ 11,940 $ 10,778 Nonperforming loans $ 21,847 $ 21,954 $ 26,359 Nonperforming assets 25,184 25,537 30,288 Net charge-off ratio(1) 0.06 % 0.16 % 0.20 % Classified loans ratio(2) 2.57 % 3.11 % 4.07 % Nonperforming loans ratio(3) 0.51 % 0.51 % 0.64 % Nonperforming assets ratio(4) 0.40 % 0.39 % 0.47 % Allowance for credit losses ratio(5) 1.28 % 1.25 % 1.25 % Allowance for credit losses to nonaccrual loans ratio(6) 254.32 % 260.84 % 198.91 % (1)Net charge-off ratio is calculated as annualized net charge-offs divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, during the period. (2)Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period. (3)Nonperforming loans ratio is calculated as nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period. (4)Nonperforming assets ratio is calculated as nonperforming assets divided by total assets at the end of the period. (5)Allowance for credit losses ratio is calculated as allowance for credit losses divided by loans held for investment, net of unearned income, at the end of the period. (6)Allowance for credit losses to nonaccrual loans ratio is calculated as allowance for credit losses divided by nonaccrual loans at the end of the period. Nonperforming loans and nonperforming assets ratios remained stable at 0.51% and 0.40%, respectively, compared to the linked quarter, while the classified loans ratio improved 54 bps to 2.57%. In addition, special mention loan balances decreased $28.8 million, or 16%. When compared to the same period of the prior year, the nonperforming loans and nonperforming asset ratios decreased 13 bps and 7 bps, respectively, while the classified loan ratio improved 150 bps. Special mention loan balances increased $35.4 million, or 31%. The net charge-off ratio decreased 10 bps from the linked quarter and 14 bps from the same period in the prior year.
As of December 31, 2024, the allowance for credit losses was $55.2 million and the allowance for credit losses ratio was 1.28%, compared with $54.0 million and 1.25%, respectively, at September 30, 2024. Credit loss expense of $1.3 million in the fourth quarter of 2024 reflected additional reserve primarily related to additions to nonperforming loans, offset by a reduction of $0.6 million in the reserve for unfunded loan commitments.
Nonperforming Loans Roll Forward Nonaccrual 90+ Days Past Due & Still Accruing Total (Dollars in thousands) Balance at September 30, 2024 $ 20,702 $ 1,252 $ 21,954 Loans placed on nonaccrual or 90+ days past due & still accruing 9,824 312 10,136 Proceeds related to repayment or sale (7,802 ) (65 ) (7,867 ) Charge-offs (1,003 ) (273 ) (1,276 ) Transfers to foreclosed assets (16 ) — (16 ) Transfer to nonaccrual — (1,084 ) (1,084 ) Balance at December 31, 2024 $ 21,705 $ 142 $ 21,847 CONFERENCE CALL DETAILS
The Company will host a conference call for investors at 11:00 a.m. CT on Friday, January 24, 2025. To participate, you may pre-register for this call utilizing the following link: https://www.netroadshow.com/events/login?show=edad992a&confId=75837. After pre-registering for this event you will receive your access details via email. On the day of the call, you are also able to dial 1-833-470-1428 using an access code of 135335 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, 2025 by calling 1-866-813-9403 and using the replay access code of 395859. A transcript of the call will also be available on the Company’s web site (www.midwestonefinancial.com) within three business days of the call.
ABOUT MIDWESTONE FINANCIAL GROUP, INC.
MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWestOne is the parent company of MidWestOne Bank, which operates banking offices in Iowa, Minnesota, Wisconsin, 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) the risks of mergers or branch sales (including the sale of our Florida banking operations and the acquisition of DNVB), 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; (2) credit quality deterioration, pronounced and sustained reduction in real estate market values, or other uncertainties, including the impact of changing inflationary pressures on economic conditions and our business, resulting in an increase in the allowance for credit losses, an increase in the credit loss expense, and a reduction in net earnings; (3) the effects of changes in interest rates, including on our net income and the value of our securities portfolio; (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) the economic impacts on the Company and its customers of climate change, natural disasters and exceptional weather occurrences, such as: tornadoes, floods and blizzards; (8) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators, including changes in interpretation or prioritization, and any changes in response to the failures of other banks; (9) the ability to attract and retain key executives and employees experienced in banking and financial services; (10) the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio; (11) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (12) credit risks and risks from concentrations (by type of borrower, collateral, geographic area and by industry) within our loan portfolio; (13) 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; (14) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (15) volatility of rate-sensitive deposits; (16) operational risks, including data processing system failures or fraud; (17) asset/liability matching risks and liquidity risks; (18) the costs, effects and outcomes of existing or future litigation or other legal proceedings and regulatory actions; (19) changes in general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business, including the risk of a recession; (20) new or revised accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (21) war or terrorist activities, including ongoing conflicts in the Middle East and the Russian invasion of Ukraine, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (22) the occurrence of fraudulent activity, breaches, or failures of our or our third-party vendors' information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; (23) the imposition of tariffs or other domestic or international governmental policies impacting the value of products produced by our borrowers; (24) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company's cost of funds; (25) the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; (26) changes in the business and economic conditions generally and in the financial services industry, and the effects of developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in prior bank failures; and (27) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.
MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED BALANCE SHEETSDecember 31, September 30, June 30, March 31, December 31, (In thousands) 2024 2024 2024 2024 2023 ASSETS Cash and due from banks $ 71,803 $ 72,173 $ 66,228 $ 68,430 $ 76,237 Interest earning deposits in banks 133,092 129,695 35,340 29,328 5,479 Federal funds sold — — — 4 11 Total cash and cash equivalents 204,895 201,868 101,568 97,762 81,727 Debt securities available for sale at fair value 1,328,433 1,623,104 771,034 797,230 795,134 Held to maturity securities at amortized cost — — 1,053,080 1,064,939 1,075,190 Total securities 1,328,433 1,623,104 1,824,114 1,862,169 1,870,324 Loans held for sale 749 3,283 2,850 2,329 1,045 Gross loans held for investment 4,328,413 4,344,559 4,304,619 4,433,258 4,138,352 Unearned income, net (12,786 ) (15,803 ) (17,387 ) (18,612 ) (11,405 ) Loans held for investment, net of unearned income 4,315,627 4,328,756 4,287,232 4,414,646 4,126,947 Allowance for credit losses (55,200 ) (54,000 ) (53,900 ) (55,900 ) (51,500 ) Total loans held for investment, net 4,260,427 4,274,756 4,233,332 4,358,746 4,075,447 Premises and equipment, net 90,851 90,750 91,793 95,986 85,742 Goodwill 69,788 69,788 69,388 71,118 62,477 Other intangible assets, net 25,019 26,469 27,939 29,531 24,069 Foreclosed assets, net 3,337 3,583 6,053 3,897 3,929 Other assets 252,830 258,881 224,621 226,477 222,780 Total assets $ 6,236,329 $ 6,552,482 $ 6,581,658 $ 6,748,015 $ 6,427,540 LIABILITIES Noninterest bearing deposits $ 951,423 $ 917,715 $ 882,472 $ 920,764 $ 897,053 Interest bearing deposits 4,526,559 4,451,012 4,529,947 4,664,472 4,498,620 Total deposits 5,477,982 5,368,727 5,412,419 5,585,236 5,395,673 Short-term borrowings 3,186 410,630 414,684 422,988 300,264 Long-term debt 113,376 115,051 114,839 122,066 123,296 Other liabilities 82,089 95,836 96,430 89,685 83,929 Total liabilities 5,676,633 5,990,244 6,038,372 6,219,975 5,903,162 SHAREHOLDERS' EQUITY Common stock 21,580 21,580 16,581 16,581 16,581 Additional paid-in capital 414,987 414,965 300,831 300,845 302,157 Retained earnings 217,776 206,490 306,030 294,066 294,784 Treasury stock (21,885 ) (21,955 ) (22,021 ) (22,648 ) (24,245 ) Accumulated other comprehensive loss (72,762 ) (58,842 ) (58,135 ) (60,804 ) (64,899 ) Total shareholders' equity 559,696 562,238 543,286 528,040 524,378 Total liabilities and shareholders' equity $ 6,236,329 $ 6,552,482 $ 6,581,658 $ 6,748,015 $ 6,427,540 MIDWESTONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOMEThree Months Ended Year Ended December 31, September 30, June 30, March 31, December 31, December 31, December 31, (In thousands, except per share data) 2024 2024 2024 2024 2023 2024 2023 Interest income Loans, including fees $ 62,458 $ 62,521 $ 61,643 $ 57,947 $ 54,093 $ 244,569 $ 202,179 Taxable investment securities 11,320 8,779 9,228 9,460 9,274 38,787 38,978 Tax-exempt investment securities 728 1,611 1,663 1,710 1,789 5,712 7,540 Other 3,761 785 242 418 230 5,206 916 Total interest income 78,267 73,696 72,776 69,535 65,386 294,274 249,613 Interest expense Deposits 27,324 29,117 28,942 27,726 27,200 113,109 85,764 Short-term borrowings 115 5,043 5,409 4,975 3,496 15,542 11,119 Long-term debt 1,890 2,015 2,078 2,103 2,131 8,086 8,558 Total interest expense 29,329 36,175 36,429 34,804 32,827 136,737 105,441 Net interest income 48,938 37,521 36,347 34,731 32,559 157,537 144,172 Credit loss expense 1,291 1,535 1,267 4,689 1,768 8,782 5,849 Net interest income after credit loss expense 47,647 35,986 35,080 30,042 30,791 148,755 138,323 Noninterest income Investment services and trust activities 3,779 3,410 3,504 3,503 3,193 14,196 12,249 Service charges and fees 2,159 2,170 2,156 2,144 2,148 8,629 8,349 Card revenue 1,833 1,935 1,907 1,943 1,802 7,618 7,214 Loan revenue 1,841 760 1,525 856 909 4,982 4,700 Bank-owned life insurance 719 879 668 660 656 2,926 2,500 Investment securities gains (losses), net 161 (140,182 ) 33 36 (5,696 ) (139,952 ) (18,789 ) Other 345 640 11,761 608 850 13,354 2,200 Total noninterest income (loss) 10,837 (130,388 ) 21,554 9,750 3,862 (88,247 ) 18,423 Noninterest expense Compensation and employee benefits 20,684 19,943 20,985 20,930 17,859 82,542 76,410 Occupancy expense of premises, net 2,772 2,443 2,435 2,813 2,309 10,463 10,034 Equipment 2,688 2,486 2,530 2,600 2,466 10,304 9,195 Legal and professional 2,534 2,261 2,253 2,059 2,269 9,107 7,365 Data processing 1,719 1,580 1,645 1,360 1,411 6,304 5,799 Marketing 793 619 636 598 700 2,646 3,610 Amortization of intangibles 1,449 1,470 1,593 1,637 1,441 6,149 6,247 FDIC insurance 980 923 1,051 942 900 3,896 3,294 Communications 154 159 191 196 183 700 910 Foreclosed assets, net 56 330 138 358 45 882 13 Other 3,543 3,584 2,304 2,072 2,548 11,503 9,036 Total noninterest expense 37,372 35,798 35,761 35,565 32,131 144,496 131,913 Income (loss) before income tax expense 21,112 (130,200 ) 20,873 4,227 2,522 (83,988 ) 24,833 Income tax expense (benefit) 4,782 (34,493 ) 5,054 958 (208 ) (23,699 ) 3,974 Net income (loss) $ 16,330 $ (95,707 ) $ 15,819 $ 3,269 $ 2,730 $ (60,289 ) $ 20,859 Earnings (loss) per common share Basic $ 0.79 $ (6.05 ) $ 1.00 $ 0.21 $ 0.17 $ (3.54 ) $ 1.33 Diluted $ 0.78 $ (6.05 ) $ 1.00 $ 0.21 $ 0.17 $ (3.54 ) $ 1.33 Weighted average basic common shares outstanding 20,776 15,829 15,763 15,723 15,693 17,030 15,678 Weighted average diluted common shares outstanding 20,851 15,829 15,781 15,774 15,756 17,030 15,725 Dividends paid per common share $ 0.2425 $ 0.2425 $ 0.2425 $ 0.2425 $ 0.2425 $ 0.9700 $ 0.9700 MIDWESTONE FINANCIAL GROUP, INC.
FINANCIAL STATISTICSAs of or for the Three Months Ended As of or for the Year Ended December 31, September 30, December 31, December 31, December 31, (Dollars in thousands, except per share amounts) 2024 2024 2023 2024 2023 Earnings: Net interest income $ 48,938 $ 37,521 $ 32,559 $ 157,537 $ 144,172 Noninterest income (loss) 10,837 (130,388 ) 3,862 (88,247 ) 18,423 Total revenue, net of interest expense 59,775 (92,867 ) 36,421 69,290 162,595 Credit loss expense 1,291 1,535 1,768 8,782 5,849 Noninterest expense 37,372 35,798 32,131 144,496 131,913 Income (loss) before income tax expense 21,112 (130,200 ) 2,522 (83,988 ) 24,833 Income tax expense (benefit) 4,782 (34,493 ) (208 ) (23,699 ) 3,974 Net income (loss) $ 16,330 $ (95,707 ) $ 2,730 $ (60,289 ) $ 20,859 Adjusted earnings(1) $ 16,112 $ 9,141 $ 7,265 $ 37,954 $ 35,311 Per Share Data: Diluted earnings (loss) $ 0.78 $ (6.05 ) $ 0.17 $ (3.54 ) $ 1.33 Adjusted earnings(1) 0.77 0.58 0.46 2.23 2.25 Book value 26.94 27.06 33.41 26.94 33.41 Tangible book value(1) 22.37 22.43 27.90 22.37 27.90 Ending Balance Sheet: Total assets $ 6,236,329 $ 6,552,482 $ 6,427,540 $ 6,236,329 $ 6,427,540 Loans held for investment, net of unearned income 4,315,627 4,328,756 4,126,947 4,315,627 4,126,947 Total securities 1,328,433 1,623,104 1,870,324 1,328,433 1,870,324 Total deposits 5,477,982 5,368,727 5,395,673 5,477,982 5,395,673 Short-term borrowings 3,186 410,630 300,264 3,186 300,264 Long-term debt 113,376 115,051 123,296 113,376 123,296 Total shareholders' equity 559,696 562,238 524,378 559,696 524,378 Average Balance Sheet: Average total assets $ 6,279,975 $ 6,583,404 $ 6,459,705 $ 6,552,420 $ 6,475,360 Average total loans 4,307,583 4,311,693 4,080,243 4,334,163 3,993,389 Average total deposits 5,464,900 5,402,634 5,443,323 5,465,718 5,455,609 Financial Ratios: Return on average assets 1.03 % (5.78) % 0.17 % (0.92) % 0.32 % Return on average equity 11.53 % (69.05) % 2.12 % (11.08) % 4.12 % Return on average tangible equity(1) 14.80 % (82.78) % 3.57 % (12.45) % 6.14 % Efficiency ratio(1) 59.06 % 70.32 % 70.16 % 63.44 % 67.28 % Net interest margin, tax equivalent(1) 3.43 % 2.51 % 2.22 % 2.66 % 2.46 % Loans to deposits ratio 78.78 % 80.63 % 76.49 % 78.78 % 76.49 % CET1 Ratio 10.73 % 9.91 % 9.59 % 10.73 % 9.59 % Common equity ratio 8.97 % 8.58 % 8.16 % 8.97 % 8.16 % Tangible common equity ratio(1) 7.57 % 7.22 % 6.90 % 7.57 % 6.90 % Credit Risk Profile: Total nonperforming loans $ 21,847 $ 21,954 $ 26,359 $ 21,847 $ 26,359 Nonperforming loans ratio 0.51 % 0.51 % 0.64 % 0.51 % 0.64 % Total nonperforming assets $ 25,184 $ 25,537 $ 30,288 $ 25,184 $ 30,288 Nonperforming assets ratio 0.40 % 0.39 % 0.47 % 0.40 % 0.47 % Net charge-offs $ 691 $ 1,735 $ 2,068 $ 3,139 $ 3,749 Net charge-off ratio 0.06 % 0.16 % 0.20 % 0.07 % 0.09 % Allowance for credit losses $ 55,200 $ 54,000 $ 51,500 $ 55,200 $ 51,500 Allowance for credit losses ratio 1.28 % 1.25 % 1.25 % 1.28 % 1.25 % Allowance for credit losses to nonaccrual ratio 254.32 % 260.84 % 198.91 % 254.32 % 198.91 % (1)Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure. MIDWESTONE FINANCIAL GROUP, INC.
AVERAGE BALANCE SHEET AND YIELD ANALYSISThree Months Ended December 31, 2024 September 30, 2024 December 31, 2023 (Dollars in thousands) Average
BalanceInterest
Income/
ExpenseAverage
Yield/
CostAverage
BalanceInterest
Income/
ExpenseAverage
Yield/
CostAverage Balance Interest
Income/
ExpenseAverage
Yield/
CostASSETS Loans, including fees(1)(2)(3) $ 4,307,583 $ 63,443 5.86 % $ 4,311,693 $ 63,472 5.86 % $ 4,080,243 $ 54,939 5.34 % Taxable investment securities 1,080,716 11,320 4.17 % 1,489,843 8,779 2.34 % 1,593,699 9,274 2.31 % Tax-exempt investment securities(2)(4) 109,183 896 3.26 % 313,935 1,976 2.50 % 338,243 2,217 2.60 % Total securities held for investment(2) 1,189,899 12,216 4.08 % 1,803,778 10,755 2.37 % 1,931,942 11,491 2.36 % Other 309,904 3,761 4.83 % 52,054 785 6.00 % 22,937 230 3.98 % Total interest earning assets(2) $ 5,807,386 $ 79,420 5.44 % $ 6,167,525 $ 75,012 4.84 % $ 6,035,122 $ 66,660 4.38 % Other assets 472,589 415,879 424,583 Total assets $ 6,279,975 $ 6,583,404 $ 6,459,705 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest checking deposits $ 1,252,481 $ 2,205 0.70 % $ 1,243,327 $ 3,041 0.97 % $ 1,305,759 $ 2,991 0.91 % Money market deposits 1,046,571 7,197 2.74 % 1,047,081 7,758 2.95 % 1,103,637 7,954 2.86 % Savings deposits 799,931 3,158 1.57 % 761,922 3,128 1.63 % 639,766 1,493 0.93 % Time deposits 1,410,542 14,764 4.16 % 1,430,723 15,190 4.22 % 1,463,498 14,762 4.00 % Total interest bearing deposits 4,509,525 27,324 2.41 % 4,483,053 29,117 2.58 % 4,512,660 27,200 2.39 % Securities sold under agreements to repurchase 3,640 8 0.87 % 5,812 12 0.82 % 8,661 17 0.78 % Other short-term borrowings 6,465 107 6.58 % 415,961 5,031 4.81 % 273,963 3,479 5.04 % Total short-term borrowings 10,105 115 4.53 % 421,773 5,043 4.76 % 282,624 3,496 4.91 % Long-term debt 116,018 1,890 6.48 % 116,032 2,015 6.91 % 124,495 2,131 6.79 % Total borrowed funds 126,123 2,005 6.32 % 537,805 7,058 5.22 % 407,119 5,627 5.48 % Total interest bearing liabilities $ 4,635,648 $ 29,329 2.52 % $ 5,020,858 $ 36,175 2.87 % $ 4,919,779 $ 32,827 2.65 % Noninterest bearing deposits 955,375 919,581 930,663 Other liabilities 125,536 91,551 98,027 Shareholders’ equity 563,416 551,414 511,236 Total liabilities and shareholders’ equity $ 6,279,975 $ 6,583,404 $ 6,459,705 Net interest income(2) $ 50,091 $ 38,837 $ 33,833 Net interest spread(2) 2.92 % 1.97 % 1.73 % Net interest margin(2) 3.43 % 2.51 % 2.22 % Total deposits(5) $ 5,464,900 $ 27,324 1.99 % $ 5,402,634 $ 29,117 2.14 % $ 5,443,323 $ 27,200 1.98 % Cost of funds(6) 2.09 % 2.42 % 2.23 % (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 $456 thousand, $378 thousand, and $207 thousand for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. Loan purchase discount accretion was $2.5 million, $1.4 million, and $0.8 million for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. Tax equivalent adjustments were $985 thousand, $951 thousand, and $846 thousand for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $168 thousand, $365 thousand, and $428 thousand for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. The federal statutory tax rate utilized was 21%.
(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.MIDWESTONE FINANCIAL GROUP, INC.
AVERAGE BALANCE SHEET AND YIELD ANALYSISYear Ended December 31, 2024 December 31, 2023 (Dollars in thousands) Average
BalanceInterest
Income/
ExpenseAverage
Yield/
CostAverage
BalanceInterest
Income/
ExpenseAverage
Yield/
CostASSETS Loans, including fees(1)(2)(3) $ 4,334,163 $ 248,409 5.73 % $ 3,993,389 $ 205,189 5.14 % Taxable investment securities 1,411,411 38,787 2.75 % 1,684,360 38,978 2.31 % Tax-exempt investment securities(2)(4) 268,175 7,028 2.62 % 355,454 9,353 2.63 % Total securities held for investment(2) 1,679,586 45,815 2.73 % 2,039,814 48,331 2.37 % Other 103,679 5,206 5.02 % 22,791 916 4.02 % Total interest earning assets(2) $ 6,117,428 $ 299,430 4.89 % $ 6,055,994 $ 254,436 4.20 % Other assets 434,992 419,366 Total assets $ 6,552,420 $ 6,475,360 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest checking deposits $ 1,273,518 $ 11,281 0.89 % $ 1,398,538 $ 8,990 0.64 % Money market deposits 1,067,109 30,841 2.89 % 1,037,123 23,924 2.31 % Savings deposits 748,868 11,006 1.47 % 624,990 2,802 0.45 % Time deposits 1,439,697 59,981 4.17 % 1,443,770 50,048 3.47 % Total interest bearing deposits 4,529,192 113,109 2.50 % 4,504,421 85,764 1.90 % Securities sold under agreements to repurchase 5,019 41 0.82 % 94,563 975 1.03 % Other short-term borrowings 318,037 15,501 4.87 % 199,530 10,144 5.08 % Total short-term borrowings 323,056 15,542 4.81 % 294,093 11,119 3.78 % Long-term debt 118,877 8,086 6.80 % 131,137 8,558 6.53 % Total borrowed funds 441,933 23,628 5.35 % 425,230 19,677 4.63 % Total interest bearing liabilities $ 4,971,125 $ 136,737 2.75 % $ 4,929,651 $ 105,441 2.14 % Noninterest bearing deposits 936,526 951,188 Other liabilities 100,607 88,770 Shareholders’ equity 544,162 505,751 Total liabilities and shareholders’ equity $ 6,552,420 $ 6,475,360 Net interest income(2) $ 162,693 $ 148,995 Net interest spread(2) 2.14 % 2.06 % Net interest margin(2) 2.66 % 2.46 % Total deposits(5) $ 5,465,718 $ 113,109 2.07 % $ 5,455,609 $ 85,764 1.57 % Cost of funds(6) 2.31 % 1.79 % (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 $1.4 million and $522 thousand for the year ended December 31, 2024 and December 31, 2023, respectively. Loan purchase discount accretion was $6.3 million and $3.7 million for the year ended December 31, 2024 and December 31, 2023, respectively. Tax equivalent adjustments were $3.8 million and $3.0 million for the year ended December 31, 2024 and December 31, 2023, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $1.3 million and $1.8 million for the year ended December 31, 2024 and December 31, 2023, respectively. The federal statutory tax rate utilized was 21%.
(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.Non-GAAP Measures
This earnings release contains non-GAAP measures for tangible common equity, tangible book value per share, tangible common equity ratio, return on average tangible equity, net interest margin (tax equivalent), core net interest margin, loan yield (tax equivalent), core yield on loans, efficiency ratio, adjusted earnings and adjusted earnings per share. 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 December 31, September 30, June 30, March 31, December 31, (Dollars in thousands, except per share data) 2024 2024 2024 2024 2023 Total shareholders’ equity $ 559,696 $ 562,238 $ 543,286 $ 528,040 $ 524,378 Intangible assets, net (94,807 ) (96,257 ) (97,327 ) (100,649 ) (86,546 ) Tangible common equity $ 464,889 $ 465,981 $ 445,959 $ 427,391 $ 437,832 Total assets $ 6,236,329 $ 6,552,482 $ 6,581,658 $ 6,748,015 $ 6,427,540 Intangible assets, net (94,807 ) (96,257 ) (97,327 ) (100,649 ) (86,546 ) Tangible assets $ 6,141,522 $ 6,456,225 $ 6,484,331 $ 6,647,366 $ 6,340,994 Book value per share $ 26.94 $ 27.06 $ 34.44 $ 33.53 $ 33.41 Tangible book value per share(1) $ 22.37 $ 22.43 $ 28.27 $ 27.14 $ 27.90 Shares outstanding 20,777,485 20,774,919 15,773,468 15,750,471 15,694,306 Common equity ratio 8.97 % 8.58 % 8.25 % 7.83 % 8.16 % Tangible common equity ratio(2) 7.57 % 7.22 % 6.88 % 6.43 % 6.90 % (1) Tangible common equity divided by shares outstanding.
(2) Tangible common equity divided by tangible assets.Three Months Ended Year Ended Return on Average Tangible Equity December 31, September 30, December 31, December 31, December 31, (Dollars in thousands) 2024 2024 2023 2024 2023 Net income (loss) $ 16,330 $ (95,707 ) $ 2,730 $ (60,289 ) $ 20,859 Intangible amortization, net of tax(1) 1,075 1,090 1,081 4,561 4,685 Tangible net income (loss) $ 17,405 $ (94,617 ) $ 3,811 $ (55,728 ) $ 25,544 Average shareholders’ equity $ 563,416 $ 551,414 $ 511,236 $ 544,162 $ 505,751 Average intangible assets, net (95,498 ) (96,706 ) (87,258 ) (96,699 ) (89,539 ) Average tangible equity $ 467,918 $ 454,708 $ 423,978 $ 447,463 $ 416,212 Return on average equity 11.53 % (69.05) % 2.12 % (11.08) % 4.12 % Return on average tangible equity(2) 14.80 % (82.78) % 3.57 % (12.45) % 6.14 % (1) The income tax rate utilized was the blended marginal tax rate.
(2) Annualized tangible net income divided by average tangible equity.Net Interest Margin, Tax Equivalent/
Core Net Interest MarginThree Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (Dollars in thousands) 2024 2024 2023 2024 2023 Net interest income $ 48,938 $ 37,521 $ 32,559 $ 157,537 $ 144,172 Tax equivalent adjustments: Loans(1) 985 951 846 3,840 3,010 Securities(1) 168 365 428 1,316 1,813 Net interest income, tax equivalent $ 50,091 $ 38,837 $ 33,833 $ 162,693 $ 148,995 Loan purchase discount accretion (2,496 ) (1,426 ) (765 ) (6,335 ) (3,729 ) Core net interest income $ 47,595 $ 37,411 $ 33,068 $ 156,358 $ 145,266 Net interest margin 3.35 % 2.42 % 2.14 % 2.58 % 2.38 % Net interest margin, tax equivalent(2) 3.43 % 2.51 % 2.22 % 2.66 % 2.46 % Core net interest margin(3) 3.26 % 2.41 % 2.17 % 2.56 % 2.40 % Average interest earning assets $ 5,807,386 $ 6,167,525 $ 6,035,122 $ 6,117,428 $ 6,055,994 (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.Three Months Ended Year Ended Loan Yield, Tax Equivalent / Core Yield on Loans December 31, September 30, December 31, December 31, December 31, (Dollars in thousands) 2024 2024 2023 2024 2023 Loan interest income, including fees $ 62,458 $ 62,521 $ 54,093 $ 244,569 $ 202,179 Tax equivalent adjustment(1) 985 951 846 3,840 3,010 Tax equivalent loan interest income $ 63,443 $ 63,472 $ 54,939 $ 248,409 $ 205,189 Loan purchase discount accretion (2,496 ) (1,426 ) (765 ) (6,335 ) (3,729 ) Core loan interest income $ 60,947 $ 62,046 $ 54,174 $ 242,074 $ 201,460 Yield on loans 5.77 % 5.77 % 5.26 % 5.64 % 5.06 % Yield on loans, tax equivalent(2) 5.86 % 5.86 % 5.34 % 5.73 % 5.14 % Core yield on loans(3) 5.63 % 5.72 % 5.27 % 5.59 % 5.04 % Average loans $ 4,307,583 $ 4,311,693 $ 4,080,243 $ 4,334,163 $ 3,993,389 (1) The federal statutory tax rate utilized was 21%.
(2) Annualized tax equivalent loan interest income divided by average loans.
(3) Annualized core loan interest income divided by average loans.Three Months Ended Year Ended Efficiency Ratio December 31, September 30, December 31, December 31, December 31, (Dollars in thousands) 2024 2024 2023 2024 2023 Total noninterest expense $ 37,372 $ 35,798 $ 32,131 $ 144,496 $ 131,913 Amortization of intangibles (1,449 ) (1,470 ) (1,441 ) (6,149 ) (6,247 ) Merger-related expenses (31 ) (133 ) (245 ) (2,332 ) (392 ) Noninterest expense used for efficiency ratio $ 35,892 $ 34,195 $ 30,445 $ 136,015 $ 125,274 Net interest income, tax equivalent(1) $ 50,091 $ 38,837 $ 33,833 $ 162,693 $ 148,995 Plus: Noninterest income (loss) 10,837 (130,388 ) 3,862 (88,247 ) 18,423 Less: Investment securities gains (losses), net 161 (140,182 ) (5,696 ) (139,952 ) (18,789 ) Net revenues used for efficiency ratio $ 60,767 $ 48,631 $ 43,391 $ 214,398 $ 186,207 Efficiency ratio(2) 59.06 % 70.32 % 70.16 % 63.44 % 67.28 % (1) The federal statutory tax rate utilized was 21%.
(2) Noninterest expense adjusted for amortization of intangibles and merger-related expenses divided by the sum of tax equivalent net interest income, noninterest income and net investment securities gains.Three Months Ended Year Ended Adjusted Earnings December 31, September 30, December 31, December 31, December 31, (Dollars in thousands, except per share data) 2024 2024 2023 2024 2023 Net income (loss) $ 16,330 $ (95,707 ) $ 2,730 $ (60,289 ) $ 20,859 Less: Investment securities gains (losses), net of tax(1) 119 (103,988 ) (4,272 ) (103,818 ) (14,092 ) Less: Mortgage servicing rights gain (loss), net of tax(1) 122 (761 ) (79 ) (817 ) (66 ) Plus: Merger-related expenses, net of tax(1) 23 99 184 1,730 294 Less: Gain on branch sale, net of tax(1) — — — 8,122 — Adjusted earnings $ 16,112 $ 9,141 $ 7,265 $ 37,954 $ 35,311 Weighted average diluted common shares outstanding 20,851 15,829 15,756 17,030 15,725 Earnings (loss) per common share - diluted $ 0.78 $ (6.05 ) $ 0.17 $ (3.54 ) $ 1.33 Adjusted earnings per common share(2) $ 0.77 $ 0.58 $ 0.46 $ 2.23 $ 2.25 (1) The income tax rate utilized was the blended marginal tax rate.
(2) Adjusted earnings divided by weighted average diluted common shares outstanding.Category: Earnings
This news release may be downloaded from https://www.midwestonefinancial.com/corporate-profile/default.aspx
Source: MidWestOne Financial Group, Inc.
Industry: Banks
Contacts: Charles N. Reeves Barry S. Ray Chief Executive Officer Chief Financial Officer 319.356.5800 319.356.5800 
- Net income of $16.3 million, or $0.78 per diluted common share.