• MidWestOne Financial Group, Inc. Reports Financial Results for the Fourth Quarter and Full Year of 2021

    ソース: Nasdaq GlobeNewswire / 27 1 2022 15:57:58   America/Chicago

    Fourth Quarter Summary1

    • Net income for the fourth quarter was $14.3 million, or $0.91 per diluted common share.
      • Total revenue, net of interest expense, of $50.0 million.
      • Credit loss expense of $0.6 million.
      • Noninterest expense of $30.4 million.
    • Excluding Paycheck Protection Program ("PPP") loans, commercial loans were $2.68 billion2, as compared to $2.64 billion2, an increase of 5.5% annualized.
    • Efficiency ratio was 56.74%2, an increase of 40 basis points ("bps").
    • Nonperforming assets ratio declined 5 bps to 0.53% and the net charge-off ratio was a recovery of 3 bps.
    • Average total deposits were $5.0 billion, as compared to $4.9 billion, an increase of 2.7%, while cost of average total deposits decreased 2 bps to 0.24% and cost of funds decreased 2 bps to 0.35%.

    Full Year 2021 Summary1

    • Record net income of $69.5 million, or $4.37 per diluted common share.
    • Book value and tangible book value per share grew 4.6% and 6.4%2, respectively.
    • Return on average equity and return on average tangible equity of 13.18% and 16.63%2, respectively.
    • Net charge-off ratio was a recovery of 1 basis point.
    • Efficiency ratio was 54.65%2, a decline of 227 bps from the prior year.

    IOWA CITY, Iowa, Jan. 27, 2022 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported net income for the fourth quarter of 2021 of $14.3 million, or $0.91 per diluted common share, compared to net income of $16.3 million, or $1.03 per diluted common share, for the linked quarter. For the full year of 2021, the Company reported record earnings, with net income of $69.5 million, or $4.37 per diluted common share, compared to net income for the full year of 2020 of $6.6 million, or $0.41 per diluted common share.

    CEO COMMENTARY

    Charles Funk, Chief Executive Officer of the Company, commented, "The fourth quarter of 2021 was a solid ending to a record earnings year for MidWestOne. During the quarter, we saw good ex-PPP commercial loan growth, continued progress in wealth management, and improvements in our nonperforming loans and nonperforming assets ratios. We are pleased with the return on average tangible equity of 13.50%.

    Key to continued progress in our Company is quality loan growth. We saw ex-PPP linked quarter commercial loan growth of 5.5% annualized in the fourth quarter. This is even more impressive when considering that we saw a high level of pay-offs during the fourth quarter and continued low credit line usage. We begin 2022 with a solid pipeline of new loans and optimism that this growth will continue.

    The consistent improvement in overall asset quality was one of the big stories for the Company in 2021. At year-end, nonperforming loans fell below 1.0%, at 0.97% of total loans. For the quarter and for the entire year, we had a net recovery of charged-off loans. Importantly, we expect to see continued progress in nonperforming assets in 2022.

    With respect to fee income, there is no doubt that our mortgage team contributed mightily to the record 2021 results. In line with the rise in long-term interest rates, we see that slowing in 2022. Our wealth management team also continued to shine as their revenue in 2021 was up $2.0 million, or 21.2%, from the prior year and we expect continued good progress.

    We have continued to make headway in our previously announced acquisition of Iowa First Bancshares Corp. ("IOFB"), which is expected to close late in the first quarter or early in the second quarter of 2022. We look forward to welcoming our new customers and employees to MidWestOne.

    Finally, between share repurchases and the cash dividend, we returned $25.8 million to our common shareholders in 2021. Looking ahead, our common stock dividend increase of 5.6% for 2022 reflects our confidence in continued sound financial performance."

    _________________________________
    1     Fourth Quarter Summary compares to the third quarter of 2021 (the "linked quarter") unless noted. Full Year 2021 Summary compares to the full year 2020 unless noted.
    2 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

         
    FINANCIAL HIGHLIGHTS
    		 Three Months Ended Year Ended
    (Dollars in thousands, except per share amounts) December 31, September 30, December 31, December 31, December 31,
      2021   2021   2020   2021   2020 
    Net interest income $38,819  $40,340  $39,037  $156,281  $152,964 
    Noninterest income  11,229   9,182   10,626   42,453   38,620 
    Total revenue, net of interest expense  50,048   49,522   49,663   198,734   191,584 
    Credit loss expense (benefit)  622   (1,080)  (3,041)  (7,336)  28,369 
    Noninterest expense  30,444   29,778   31,915   116,592   149,893 
    Income before income tax expense  18,982   20,824   20,789   89,478   13,322 
    Income tax expense  4,726   4,513   4,079   19,992   6,699 
    Net income $14,256  $16,311  $16,710  $69,486  $6,623 
    Diluted earnings per share $0.91  $1.03  $1.04  $4.37  $0.41 
               
    Return on average assets  0.95%  1.11%  1.22%  1.20%  0.13%
    Return on average equity  10.68%  12.00%  13.15%  13.18%  1.28%
    Return on average tangible equity(1)  13.50%  15.06%  17.07%  16.63%  10.80%
    Efficiency ratio(1)  56.74%  56.34%  59.69%  54.65%  56.92%
    (1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
     

    INCOME STATEMENT HIGHLIGHTS

    Net Interest Income

    Net interest income decreased to $38.8 million in the fourth quarter of 2021 from $40.3 million in the third quarter of 2021 due primarily to decreased PPP loan fee accretion stemming from loan forgiveness that continued to be robust in the fourth quarter of 2021. Net PPP loan fee accretion was $2.0 million in the fourth quarter of 2021 compared to $3.6 million in the linked quarter.

    Average interest earning assets increased $117.2 million to $5.61 billion in the fourth quarter of 2021, compared to the third quarter of 2021. When adjusting for the $91.0 million reduction in average PPP loan balances due to forgiveness, average interest earning assets increased $206.9 million, primarily due to cash inflows from deposit activity that resulted in an increase in interest earning deposits in banks on the balance sheet and that were used to purchase debt securities, coupled with non-PPP loan growth.

    The Company's tax equivalent net interest margin was 2.83% in the fourth quarter of 2021 compared to 3.00% in the linked quarter due to a decrease in total interest earning assets yield, partially offset by reduced funding costs. Total interest earning assets yield decreased 19 bps from the linked quarter due to the reduced benefit from PPP net loan fee accretion described above, coupled with lower loan coupon rates at origination and re-pricing, and an asset mix shift to cash and debt securities. The cost of interest bearing liabilities decreased 3 bps to 0.43%, primarily as a result of interest bearing deposits costs of 0.30%, which declined 2 bps from the linked quarter.

    Noninterest Income

    Noninterest income for the fourth quarter of 2021 increased $2.0 million, or 22.3%, from the linked quarter. The increase was primarily due to an increase of $1.2 million in loan revenue and an increase of $0.5 million in 'Other' noninterest income. The increase in loan revenue was primarily driven by a $0.9 million increase in the fair value of our mortgage servicing rights. The increase in 'Other' noninterest income partially stemmed from a $0.2 million increase in income received from our commercial loan back-to-back swap program.

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

     Three Months Ended
    Noninterest IncomeDecember 31, September 30, December 31,
    (In thousands) 2021  2021  2020
    Investment services and trust activities$3,115 $2,915 $2,518
    Service charges and fees 1,684  1,613  1,571
    Card revenue 1,746  1,820  1,517
    Loan revenue 3,132  1,935  3,900
    Bank-owned life insurance 550  532  541
    Investment securities gains, net 137  36  30
    Other 865  331  549
    Total noninterest income$11,229 $9,182 $10,626
             

    Noninterest Expense

    Noninterest expense for the fourth quarter of 2021 increased $0.7 million, or 2.2%, from the linked quarter primarily due to an increase of $0.9 million in compensation and employee benefits and a $0.6 million increase in legal and professional expenses. The increase in compensation and employee benefits was primarily due to an increase of $0.5 million related to incentive and commission expense. The increase in legal and professional expenses was partially due to $0.2 million merger-related legal expenses. Partially offsetting these increases was a decrease of $0.5 million in 'other' noninterest expense. The decline in 'other' noninterest expense was primarily driven by the settlement of litigation claims totaling $0.7 million during the third quarter of 2021, which did not recur in the fourth quarter of 2021.

    The increase in noninterest expense and the decline in net interest income, partially offset by the increase in noninterest income noted above, were the primary drivers of the increase in the efficiency ratio, which increased 0.40 percentage points to 56.74% from 56.34% in the linked quarter.

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

     Three Months Ended
    Noninterest ExpenseDecember 31, September 30, December 31,
    (In thousands) 2021  2021  2020 
    Compensation and employee benefits$18,266 $17,350 $17,638 
    Occupancy expense of premises, net 2,211  2,547  2,476 
    Equipment 2,189  1,973  2,040 
    Legal and professional 1,826  1,272  2,052 
    Data processing 1,211  1,406  1,460 
    Marketing 1,121  1,022  986 
    Amortization of intangibles 1,245  1,264  1,569 
    FDIC insurance 380  435  495 
    Communications 277  275  412 
    Foreclosed assets, net 7  43  (35)
    Other 1,711  2,191  2,822 
    Total noninterest expense$30,444 $29,778 $31,915 

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

     Three Months Ended
     December 31, September 30, December 31,
    Merger-related Expenses 2021  2021  2020
    (In thousands)     
    Equipment$18 $— $—
    Legal and professional 202  —  —
    Marketing 2  —  —
    Other 2  —  —
    Total merger-related expenses$224 $— $—
             

    Income Taxes

    The effective income tax rate increased to 24.9% in the fourth quarter of 2021 compared to 21.7% in the linked quarter. This increase was primarily due to the year-end adjustment to federal tax expense based upon 2021 taxable income. The Company's effective tax rate is lower than its combined statutory tax rate due to benefits related to tax-exempt interest and bank-owned life insurance. The effective income tax rate for the full year 2022 is expected to be in the range of 19.5-21.5%.

    BALANCE SHEET, LIQUIDITY AND CAPITAL HIGHLIGHTS
    		As of or for the Three Months Ended
     December 31, September 30, December 31,
    (Dollars in millions, except per share amounts) 2021   2021   2020 
    Ending Balance Sheet     
    Total assets$6,025.1  $5,875.4  $5,556.6 
    Loans held for investment, net of unearned income 3,245.0   3,268.6   3,482.2 
    Total securities held for investment 2,288.1   2,136.9   1,657.4 
    Total deposits 5,114.5   4,957.8   4,547.0 
    Average Balance Sheet     
    Average total assets$5,934.1  $5,811.2  $5,457.9 
    Average total loans 3,268.8   3,356.7   3,560.6 
    Average total deposits 5,015.5   4,882.8   4,490.0 
    Funding and Liquidity     
    Short-term borrowings$181.4  $187.5  $230.8 
    Long-term debt 154.9   154.9   208.7 
    Loans to deposits ratio 63.45%  65.93%  76.58%
    Equity     
    Total shareholders' equity$527.5  $530.3  $515.3 
    Common equity ratio 8.75%  9.03%  9.27%
    Tangible common equity(1) 445.1   446.7   427.5 
    Tangible common equity ratio(1) 7.49%  7.71%  7.82%
    Per Share Data     
    Book value$33.66  $33.71  $32.17 
    Tangible book value(1)$28.40  $28.40  $26.69 
    (1) Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
     

    Loans Held for Investment

    Loans held for investment, net of unearned income, decreased $23.6 million, or 0.7%, to $3.25 billion from September 30, 2021, driven primarily by PPP loan forgiveness and partially offset by new loan production during the fourth quarter of 2021. The revolving line of credit utilization was consistent with the linked quarter at 32%.

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

    Loans Held for InvestmentDecember 31, 2021 September 30, 2021 December 31, 2020 
     Balance
    		 % of
    		 Balance
    		 % of Balance
    		 % of 
    (dollars in thousands) Total  Total  Total 
    Commercial and industrial$902,314 27.8%$927,258 28.4%$1,055,488 30.3%
    Agricultural 103,417 3.2  106,356 3.3  116,392 3.3 
    Commercial real estate            
    Construction and development 172,160 5.3  146,417 4.5  181,291 5.2 
    Farmland 144,673 4.5  130,936 4.0  144,970 4.2 
    Multifamily 244,503 7.5  273,347 8.4  256,525 7.4 
    Other 1,143,205 35.2  1,148,658 35.0  1,149,575 33.0 
        Total commercial real estate 1,704,541 52.5  1,699,358 51.9  1,732,361 49.8 
    Residential real estate            
    One-to-four family first liens 333,308 10.3  334,267 10.2  355,684 10.2 
    One-to-four family junior liens 133,014 4.1  133,869 4.1  143,422 4.1 
        Total residential real estate 466,322 14.4  468,136 14.3  499,106 14.3 
    Consumer 68,418 2.1  67,536 2.1  78,876 2.3 
        Loans held for investment, net of unearned income$3,245,012 100.0%$3,268,644 100.0%$3,482,223 100.0%
                 
    Total commitments to extend credit$1,014,397   $950,157   $897,274   
                    

    PPP Loans

    The following table presents PPP loan measures as of the dates indicated:

      December 31, 2021 September 30, 2021
      Round 1(3) Round 2(3) Total Round 1(3) Round 2(3) Total
    (Dollars in millions) # $ # $ # $ # $ # $ # $
    Total PPP Loans Funded 2,681 348.5 2,175 149.3 4,856 497.8 2,681 348.5 2,175 149.3 4,856 497.8
    PPP Loan Forgiveness(1) 2,609 334.2 2,009 122.4 4,618 456.6 2,478 323.7 1,514 72.9 3,992 396.6
    Outstanding PPP Loans(2) 53 5.6 164 25.2 217 30.8 184 16.3 661 73.1 845 89.4
                             
    Unearned Income $— $0.9 $0.9 $0.1 $2.8 $2.9
    (1) Excluded from the PPP Loan Forgiveness is $9.3 million as of December 31, 2021 and $9.1 million as of September 30, 2021 of PPP loans that were paid off by the borrower prior to forgiveness or through the SBA PPP loan guarantee.
    (2) Outstanding loans are presented net of unearned income.
    (3) Round 1 refers to PPP loan applications from the first wave of funding made available through the CARES Act, which was signed into law by President Trump in March 2020. Round 2 refers to the second wave of PPP funding made available through the Consolidated Appropriations Act, 2021, which was signed into law by President Trump in December 2020 and extended by the PPP Extension Act of 2021, which was signed into law by President Biden in March 2021.
     

    Credit Loss Expense & Allowance for Credit Losses

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

     Three Months Ended Year Ended
    Allowance for Credit Losses Roll ForwardDecember 31, September 30, December 31, December 31, December 31,
    (In thousands) 2021   2021   2020   2021   2020 
    Beginning balance$47,900  $48,000  $58,500  $55,500  $29,079 
    Cumulative effect of change in accounting principle - CECL —   —   —   —   3,984 
    Charge-offs (255)  (234)  (1,005)  (2,332)  (6,793)
    Recoveries 533   1,114   646   2,768   1,528 
      Net recoveries (charge-offs) 278   880   (359)  436   (5,265)
    Credit loss (benefit) expense related to loans 522   (980)  (2,641)  (7,236)  27,702 
    Ending balance$48,700  $47,900  $55,500  $48,700  $55,500 

    As of December 31, 2021, the allowance for credit losses ("ACL") was $48.7 million, or 1.50% of loans held for investment, net of unearned income, compared with $47.9 million, or 1.47% of loans held for investment, net of unearned income, at September 30, 2021. The ACL declined 12.3% from the prior year-end. After excluding net PPP loans, the ACL as a percentage of loans held for investment, net of unearned income, increased to 1.52%(1) as of December 31, 2021, from 1.51%(1) at September 30, 2021. The increase in the ACL during the fourth quarter was primarily attributable to reserve taken to support loan growth.

    (1)Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

    Deposits

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

    Deposit CompositionDecember 31, 2021 September 30, 2021 December 31, 2020 
    (Dollars in thousands)Balance % of Total Balance % of Total Balance % of Total 
    Noninterest bearing deposits$1,005,369 19.6%$999,887 20.2%$910,655 20.0%
    Interest checking deposits 1,619,136 31.6  1,464,389 29.5  1,351,641 29.7 
    Money market deposits 939,523 18.4  989,095 20.0  918,654 20.2 
    Savings deposits 628,242 12.3  616,924 12.4  529,751 11.7 
    Total non-maturity deposits 4,192,270 81.9  4,070,295 82.1  3,710,701 81.6 
    Time deposits of $250 and under 505,392 9.9  522,907 10.5  581,471 12.8 
    Time deposits over $250 416,857 8.2  364,579 7.4  254,877 5.6 
    Total time deposits 922,249 18.1  887,486 17.9  836,348 18.4 
    Total deposits$5,114,519 100.0%$4,957,781 100.0%$4,547,049 100.0%
                    

    CREDIT RISK PROFILE

     As of or For the Three Months Ended
    HighlightsDecember 31, September 30, December 31,
    (Dollars in thousands) 2021   2021   2020 
    Credit loss (benefit) expense related to loans$522  $(980) $(2,641)
    Net (recoveries) charge-offs$(278) $(880) $359 
    Net (recovery) charge-off ratio(1) (0.03)%  (0.10)%  0.04%
          
    At period-end     
    Pass$3,013,917  $3,069,314  $3,202,704 
    Special Mention / Watch 117,401   82,871   157,213 
    Classified 113,694   116,459   122,306 
    Total loans held for investment, net$3,245,012  $3,268,644  $3,482,223 
    Classified loans ratio(2) 3.50%  3.56%  3.51%
          
    Nonaccrual loans held for investment$31,540  $33,657  $41,950 
    Accruing loans contractually past due 90 days or more —   51   739 
    Total nonperforming loans 31,540   33,708   42,689 
    Foreclosed assets, net 357   454   2,316 
    Total nonperforming assets$31,897  $34,162  $45,005 
    Nonperforming loans ratio(3) 0.97%  1.03%  1.23%
    Nonperforming assets ratio(4) 0.53%  0.58%  0.81%
    Allowance for credit losses$48,700  $47,900  $55,500 
    Allowance for credit losses ratio(5) 1.50%  1.47%  1.59%
    Adjusted allowance for credit losses ratio(6) 1.52%  1.51%  1.72%
    Allowance for credit losses to nonaccrual loans ratio(7) 154.41%  142.32%  132.30%
    (1) Net (recovery) charge-off ratio is calculated as annualized net (recoveries) charge-offs divided by average loans held for investment, net of unearned income, during the period.
    (2) Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period.
    (3) Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period.
    (4) Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period.
    (5) Allowance for credit losses ratio is calculated as allowance for credit losses divided by loans held for investment, net of unearned income, at the end of the period.
    (6) Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
    (7)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.
     

    During the fourth quarter of 2021, we saw improvements in overall asset quality when compared to the linked quarter and the corresponding period in the prior year. We continued to experience net recoveries in the fourth quarter of 2021 and recorded net recoveries of $0.4 million for the year-ended December 31, 2021. Our nonperforming loans ratio of 0.97% was an improvement of 6 bps from the linked quarter and 23 bps from the prior year-end. Special mention / watch credits did increase $34.5 million from the linked quarter based upon our proactive credit monitoring processes. However, year-over-year, special mention / watch credits were down $39.8 million, or 25.3%.

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

    Nonperforming Loans   90+ Days Past Due
    		    
    (Dollars in thousands)Nonaccrual & Still Accruing  Total 
    Balance at September 30, 2021$33,657  $51  $33,708 
    Loans placed on nonaccrual or 90+ days past due & still accruing 512   10   522 
    Repayments (including interest applied to principal) (2,153)  —   (2,153)
    Loans returned to accrual status or no longer past due (312)  (49)  (361)
    Charge-offs (164)  (10)  (174)
    Transfers to nonaccrual —   (2)  (2)
    Balance at December 31, 2021$31,540  $—  $31,540 

    CAPITAL

    Effective March 31, 2020, we elected the 5-year phase-in option allowed under the interim final rule (IFR) issued by the federal banking regulatory agencies that delays the estimated impact on regulatory capital stemming from the implementation of the current expected credit losses (CECL) accounting standard. The IFR allows the add back of 100% of the capital effect from the day one CECL transition adjustment and 25% of the capital effect from subsequent increases in the allowance for credit losses through the two-year period ending December 31, 2021. The modified CECL transitional amount of $9.4 million will then be reduced from capital over the subsequent three-year period.

    Regulatory Capital Ratios

    		December 31, September 30, December 31,
    2021 (1) 2021  2020 
    MidWestOne Financial Group, Inc. Consolidated     
    Tier 1 leverage to average assets ratio8.67% 8.70% 8.50%
    Common equity tier 1 capital to risk-weighted assets ratio9.94% 10.26% 9.72%
    Tier 1 capital to risk-weighted assets ratio10.83% 11.20% 10.70%
    Total capital to risk-weighted assets ratio13.09% 13.58% 13.41%
    MidWestOne Bank     
    Tier 1 leverage to average assets ratio9.25% 9.41% 9.35%
    Common equity tier 1 capital to risk-weighted assets ratio11.58% 12.14% 11.79%
    Tier 1 capital to risk-weighted assets ratio11.58% 12.14% 11.79%
    Total capital to risk-weighted assets ratio12.46% 13.05% 12.89%
    (1) Capital ratios for December 31, 2021 are preliminary     
          

    CORPORATE UPDATE

    Share Repurchase Program

    Under the current repurchase program, the Company repurchased 58,900 shares of its common stock at an average price of $31.02 per share and a total cost of $1.8 million in the fourth quarter of 2021. At December 31, 2021, the total amount available under the Company's current share repurchase program was $5.8 million.

    Cash Dividend Announcement

    On January 25, 2022, the Company’s board of directors declared a quarterly cash dividend of $0.2375 per common share. The dividend is payable March 15, 2022, to shareholders of record at the close of business on March 1, 2022.

    CONFERENCE CALL DETAILS

    The Company will host a conference call for investors at 11:00 a.m. CT on Friday, January 28, 2022. To participate, you may pre-register for this call utilizing the following link: https://www.incommglobalevents.com/registration/q4inc/9571/midwestone-financial-group-inc-4th-quarter-2021-earnings-call/. After pre-registering for this event you will receive your access details via email. You are also able to on the day of the call dial 1-844-200-6205, using an access code of 306531 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 28, 2022, by calling 1-866-813-9403 and using the replay access code of 602023. A transcript of the call will also be available on the Company’s web site (www.midwestonefinancial.com) within three business days of the call.

    ABOUT MIDWESTONE FINANCIAL GROUP, INC.

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

    Cautionary Note Regarding Forward-Looking Statements

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

    Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have an impact on our ability to achieve operating results, growth plan goals and future prospects include, but are not limited to, the following: (1) effects of the COVID-19 pandemic, including its effects on the economic environment, our customers and our operations, including due to supply chain disruptions, as well as any changes to federal, state, or local government laws, regulations, or orders in connection with the pandemic; (2) government intervention in the U.S. financial system in response to the COVID-19 pandemic, including the effects of recent legislative, tax, accounting and regulatory actions and reforms; (3) the impact of the COVID-19 pandemic on our financial results, including possible lost revenue and increased expenses (including the cost of capital), as well as possible goodwill impairment charges; (4) the risks of mergers (including with IOFB), including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions; (5) credit quality deterioration or pronounced and sustained reduction in real estate market values causing an increase in the allowance for credit losses, an increase in the credit loss expense, and a reduction in net earnings; (6) the effects of interest rates, including on our net income and the value of our securities portfolio; (7) changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing; (8) fluctuations in the value of our investment securities; (9) governmental monetary and fiscal policies; (10) changes in and uncertainty related to benchmark interest rates used to price loans and deposits, including the expected elimination of LIBOR and the adoption of a substitute; (11) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators; (12) the ability to attract and retain key executives and employees experienced in banking and financial services; (13) the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio; (14) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (15) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (16) the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds, financial technology companies, and other financial institutions operating in our markets or elsewhere or providing similar services; (17) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (18) volatility of rate-sensitive deposits; (19) operational risks, including data processing system failures or fraud; (20) asset/liability matching risks and liquidity risks; (21) the costs, effects and outcomes of existing or future litigation; (22) changes in general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business; (23) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (24) war or terrorist activities, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (25) the effects of cyber-attacks; (26) the imposition of tariffs or other domestic or international governmental policies impacting the value of the agricultural or other products of our borrowers; and (27) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.

     
    MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
    FIVE QUARTER CONSOLIDATED BALANCE SHEETS
              
     December 31, September 30, June 30, March 31, December 31,
    (In thousands) 2021   2021   2021   2021   2020 
    ASSETS         
    Cash and due from banks$42,949  $53,562  $52,297  $57,154  $65,078 
    Interest earning deposits in banks 160,881   84,952   11,124   80,924   17,409 
    Federal funds sold —   —   13   7,691   172 
    Total cash and cash equivalents 203,830   138,514   63,434   145,769   82,659 
    Debt securities available for sale at fair value 2,288,110   2,136,902   2,072,452   1,896,894   1,657,381 
    Loans held for sale 12,917   58,679   6,149   58,333   59,956 
    Gross loans held for investment 3,252,194   3,278,150   3,344,156   3,374,076   3,496,790 
    Unearned income, net (7,182)  (9,506)  (14,000)  (15,915)  (14,567)
    Loans held for investment, net of unearned income 3,245,012   3,268,644   3,330,156   3,358,161   3,482,223 
    Allowance for credit losses (48,700)  (47,900)  (48,000)  (50,650)  (55,500)
    Total loans held for investment, net 3,196,312   3,220,744   3,282,156   3,307,511   3,426,723 
    Premises and equipment, net 83,492   84,130   84,667   85,581   86,401 
    Goodwill 62,477   62,477   62,477   62,477   62,477 
    Other intangible assets, net 19,885   21,130   22,394   23,735   25,242 
    Foreclosed assets, net 357   454   755   1,487   2,316 
    Other assets 157,748   152,393   154,731   155,525   153,493 
    Total assets$6,025,128  $5,875,423  $5,749,215  $5,737,312  $5,556,648 
    LIABILITIES          
    Noninterest bearing deposits$1,005,369  $999,887  $952,764  $958,526  $910,655 
    Interest bearing deposits 4,109,150   3,957,894   3,839,902   3,836,037   3,636,394 
    Total deposits 5,114,519   4,957,781   4,792,666   4,794,563   4,547,049 
    Short-term borrowings 181,368   187,508   212,261   175,785   230,789 
    Long-term debt 154,879   154,860   169,839   201,696   208,691 
    Other liabilities 46,887   45,010   44,156   53,948   54,869 
    Total liabilities 5,497,653   5,345,159   5,218,922   5,225,992   5,041,398 
    SHAREHOLDERS' EQUITY          
    Common stock 16,581   16,581   16,581   16,581   16,581 
    Additional paid-in capital 300,940   300,327   299,888   299,747   300,137 
    Retained earnings 243,365   232,639   219,884   206,230   188,191 
    Treasury stock (24,546)  (22,735)  (15,888)  (15,278)  (14,251)
    Accumulated other comprehensive (loss) income (8,865)  3,452   9,828   4,040   24,592 
    Total shareholders' equity 527,475   530,264   530,293   511,320   515,250 
    Total liabilities and shareholders' equity$6,025,128  $5,875,423  $5,749,215  $5,737,312  $5,556,648 
                        


    MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
    FIVE QUARTER AND YEAR TO DATE CONSOLIDATED STATEMENTS OF INCOME
     
     Three Months Ended Year Ended
    (In thousands, except per share data)December
    31,    		 September
    30,    		 June
    30,    		 March
    31,    		 December
    31,    		 December
    31,    		 December
    31,
    2021 2021   2021   2021   2020   2021  2020
    Interest income             
    Loans, including fees$33,643 $36,115  $34,736  $36,542  $38,239  $141,036  $158,656
    Taxable investment securities 7,461  6,655   6,483   5,093   4,673   25,692   17,610
    Tax-exempt investment securities 2,415  2,428   2,549   2,555   2,529   9,947   8,259
    Other 37  21   19   14   29   91   262
    Total interest income 43,556  45,219   43,787   44,204   45,470   176,766   184,787
    Interest expense             
    Deposits 3,031  3,150   3,409   3,608   4,265   13,198   23,919
    Short-term borrowings 130  132   161   128   142   551   914
    Long-term debt 1,576  1,597   1,712   1,851   2,026   6,736   6,990
    Total interest expense 4,737  4,879   5,282   5,587   6,433   20,485   31,823
    Net interest income 38,819  40,340   38,505   38,617   39,037   156,281   152,964
    Credit loss expense (benefit) 622  (1,080)  (2,144)  (4,734)  (3,041)  (7,336)  28,369
    Net interest income after credit loss expense (benefit) 38,197  41,420   40,649   43,351   42,078   163,617   124,595
    Noninterest income             
    Investment services and trust activities 3,115  2,915   2,809   2,836   2,518   11,675   9,632
    Service charges and fees 1,684  1,613   1,475   1,487   1,571   6,259   6,178
    Card revenue 1,746  1,820   1,913   1,536   1,517   7,015   5,719
    Loan revenue 3,132  1,935   3,151   4,730   3,900   12,948   10,185
    Bank-owned life insurance 550  532   538   542   541   2,162   2,226
    Investment securities gains, net 137  36   42   27   30   242   184
    Other 865  331   290   666   549   2,152   4,496
    Total noninterest income 11,229  9,182   10,218   11,824   10,626   42,453   38,620
    Noninterest expense             
    Compensation and employee benefits 18,266  17,350   17,404   16,917   17,638   69,937   66,397
    Occupancy expense of premises, net 2,211  2,547   2,198   2,318   2,476   9,274   9,348
    Equipment 2,189  1,973   1,861   1,793   2,040   7,816   7,865
    Legal and professional 1,826  1,272   1,375   783   2,052   5,256   6,153
    Data processing 1,211  1,406   1,347   1,252   1,460   5,216   5,362
    Marketing 1,121  1,022   873   1,006   986   4,022   3,815
    Amortization of intangibles 1,245  1,264   1,341   1,507   1,569   5,357   6,976
    FDIC insurance 380  435   245   512   495   1,572   1,858
    Communications 277  275   371   409   412   1,332   1,746
    Foreclosed assets, net 7  43   136   47   (35)  233   150
    Goodwill impairment —  —   —   —   —   —   31,500
    Other 1,711  2,191   1,519   1,156   2,822   6,577   8,723
    Total noninterest expense 30,444  29,778   28,670   27,700   31,915   116,592   149,893
    Income before income tax expense 18,982  20,824   22,197   27,475   20,789   89,478   13,322
    Income tax expense 4,726  4,513   4,926   5,827   4,079   19,992   6,699
    Net income $14,256 $16,311  $17,271  $21,648  $16,710  $69,486  $6,623
                  
    Earnings per common share             
    Basic$0.91 $1.03  $1.08  $1.35  $1.04  $4.38  $0.41
    Diluted$0.91 $1.03  $1.08  $1.35  $1.04  $4.37  $0.41
    Weighted average basic common shares outstanding 15,692  15,841   15,987   15,991   16,074   15,877   16,102
    Weighted average diluted common shares outstanding 15,734  15,863   16,012   16,021   16,092   15,905   16,110
    Dividends paid per common share$0.2250 $0.2250  $0.2250  $0.2250  $0.2200  $0.9000  $0.8800
                              


    MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
    FINANCIAL STATISTICS
     
     As of or for the Three Months Ended As of or for the Year Ended
    (Dollars in thousands, except per share amounts)December 31, September 30, December 31, December 31, December 31,
     2021   2021   2020   2021   2020 
    Earnings:         
    Net interest income$38,819  $40,340  $39,037  $156,281  $152,964 
    Noninterest income 11,229   9,182   10,626   42,453   38,620 
    Total revenue, net of interest expense 50,048   49,522   49,663   198,734   191,584 
    Credit loss expense (benefit) 622   (1,080)  (3,041)  (7,336)  28,369 
    Noninterest expense 30,444   29,778   31,915   116,592   149,893 
    Income before income tax expense 18,982   20,824   20,789   89,478   13,322 
    Income tax expense 4,726   4,513   4,079   19,992   6,699 
    Net income$14,256  $16,311  $16,710  $69,486  $6,623 
    Per Share Data:         
    Diluted earnings$0.91  $1.03  $1.04  $4.37  $0.41 
    Book value 33.66   33.71   32.17   33.66   32.17 
    Tangible book value(1) 28.40   28.40   26.69   28.40   26.69 
    Ending Balance Sheet:         
    Total assets$6,025,128  $5,875,423  $5,556,648  $6,025,128  $5,556,648 
    Loans held for investment, net of unearned income 3,245,012   3,268,644   3,482,223   3,245,012   3,482,223 
    Total securities held for investment 2,288,110   2,136,902   1,657,381   2,288,110   1,657,381 
    Total deposits 5,114,519   4,957,781   4,547,049   5,114,519   4,547,049 
    Short-term borrowings 181,368   187,508   230,789   181,368   230,789 
    Long-term debt 154,879   154,860   208,691   154,879   208,691 
    Total shareholders' equity 527,475   530,264   515,250   527,475   515,250 
    Average Balance Sheet:         
    Average total assets$5,934,076  $5,811,228  $5,457,939  $5,780,556  $5,135,841 
    Average total loans 3,268,783   3,356,680   3,560,632   3,362,488   3,551,945 
    Average total deposits 5,015,506   4,882,835   4,490,048   4,838,227   4,184,406 
    Financial Ratios:         
    Return on average assets 0.95%  1.11%  1.22%  1.20%  0.13%
    Return on average equity 10.68%  12.00%  13.15%  13.18%  1.28%
    Return on average tangible equity(1) 13.50%  15.06%  17.07%  16.63%  10.80%
    Efficiency ratio(1) 56.74%  56.34%  59.69%  54.65%  56.92%
    Net interest margin, tax equivalent(1) 2.83%  3.00%  3.13%  2.95%  3.30%
    Loans to deposits ratio 63.45%  65.93%  76.58%  63.45%  76.58%
    Common equity ratio 8.75%  9.03%  9.27%  8.75%  9.27%
    Tangible common equity ratio(1) 7.49%  7.71%  7.82%  7.49%  7.82%
    Credit Risk Profile:         
    Total nonperforming loans$31,540  $33,708  $42,689  $31,540  $42,689 
    Nonperforming loans ratio 0.97%  1.03%  1.23%  0.97%  1.23%
    Total nonperforming assets$31,897  $34,162  $45,005  $31,897  $45,005 
    Nonperforming assets ratio 0.53%  0.58%  0.81%  0.53%  0.81%
    Net (recoveries) charge-offs$(278) $(880) $359  $(436) $5,265 
    Net (recovery) charge-off ratio (0.03)%  (0.10)%  0.04%  (0.01)%  0.15%
    Allowance for credit losses$48,700  $47,900  $55,500  $48,700  $55,500 
    Allowance for credit losses ratio 1.50%  1.47%  1.59%  1.50%  1.59%
    Adjusted allowance for credit losses ratio(1) 1.52%  1.51%  1.72%  1.52%  1.72%
    Allowance for credit losses to nonaccrual ratio 154.41%  142.32%  132.30%  154.41%  132.30%
    PPP Loans:         
    Average PPP loans$52,564  $143,628  $313,252  $186,333  $223,137 
    Fee Income 1,996   3,593   2,853   11,731   5,228 
              
    (1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
     


    MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
    AVERAGE BALANCE SHEET AND YIELD ANALYSIS
     Three Months Ended
     December 31, 2021 September 30, 2021 December 31, 2020
    (Dollars in thousands)Average
    Balance    		 Interest
    Income/
    Expense    		 Average
    Yield/
    Cost    		 Average
    Balance    		 Interest
    Income/
    Expense    		 Average
    Yield/
    Cost    		 Average
    Balance    		 Interest
    Income/
    Expense    		 Average
    Yield/
    Cost
    ASSETS                 
    Loans, including fees (1)(2)(3)$3,268,783 $34,191 4.15% $3,356,680 $36,622 4.33% $3,560,632 $38,795 4.33%
    Taxable investment securities 1,802,349  7,461 1.64%  1,628,605  6,655 1.62%  1,026,359  4,673 1.81%
    Tax-exempt investment securities (2)(4) 455,570  3,026 2.64%  459,717  3,043 2.63%  450,659  3,180 2.81%
    Total securities held for investment(2) 2,257,919  10,487 1.84%  2,088,322  9,698 1.84%  1,477,018  7,853 2.12%
    Other 80,415  37 0.18%  44,915  21 0.19%  80,019  29 0.14%
    Total interest earning assets(2)$5,607,117  44,715 3.16% $5,489,917  46,341 3.35% $5,117,669  46,677 3.63%
    Other assets 326,959      321,311      340,270    
    Total assets$5,934,076     $5,811,228     $5,457,939    
    LIABILITIES AND SHAREHOLDERS’ EQUITY                 
    Interest checking deposits$1,506,600 $1,065 0.28% $1,434,560 $1,056 0.29% $1,276,320 $958 0.30%
    Money market deposits 976,018  520 0.21%  955,174  506 0.21%  931,900  544 0.23%
    Savings deposits 621,871  285 0.18%  606,449  316 0.21%  508,763  279 0.22%
    Time deposits 903,765  1,161 0.51%  890,866  1,272 0.57%  862,408  2,484 1.15%
    Total interest bearing deposits 4,008,254  3,031 0.30%  3,887,049  3,150 0.32%  3,579,391  4,265 0.47%
    Short-term borrowings 190,788  130 0.27%  182,484  132 0.29%  182,080  142 0.31%
    Long-term debt 154,870  1,576 4.04%  163,817  1,597 3.87%  223,407  2,026 3.61%
    Total borrowed funds 345,658  1,706 1.96%  346,301  1,729 1.98%  405,487  2,168 2.13%
    Total interest bearing liabilities$4,353,912 $4,737 0.43% $4,233,350 $4,879 0.46% $3,984,878 $6,433 0.64%
    Noninterest bearing deposits 1,007,252      995,786      910,657    
    Other liabilities 43,576      43,040      56,898    
    Shareholders’ equity 529,336      539,052      505,506    
    Total liabilities and shareholders’ equity$5,934,076     $5,811,228     $5,457,939    
    Net interest income(2)  $39,978     $41,462     $40,244  
    Net interest spread(2)    2.73%     2.89%     2.99%
    Net interest margin(2)    2.83%     3.00%     3.13%
                      
    Total deposits(5)$5,015,506 $3,031 0.24% $4,882,835 $3,150 0.26% $4,490,048 $4,265 0.38%
    Cost of funds(6)    0.35%     0.37%     0.52%

    (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 $1.9 million, $3.5 million, and $2.5 million for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively. Loan purchase discount accretion was $599 thousand, $774 thousand, and $1.5 million for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively. Tax equivalent adjustments were $548 thousand, $507 thousand, and $556 thousand for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively. The federal statutory tax rate utilized was 21%.
    (4) Interest income includes tax equivalent adjustments of $611 thousand, $615 thousand, and $651 thousand for the three months ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively. The federal statutory tax rate utilized was 21%.
    (5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
    (6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.

     
    MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
    AVERAGE BALANCE SHEET AND YIELD ANALYSIS
     
     Year Ended
     December 31, 2021 December 31, 2020
    (Dollars in thousands)Average
    Balance    		 Interest
    Income/
    Expense    		 Average
    Yield/
    Cost    		 Average
    Balance    		 Interest
    Income/
    Expense    		 Average
    Yield/
    Cost
    ASSETS           
    Loans, including fees (1)(2)(3)$3,362,488 $143,141 4.26% $3,551,945 $160,752 4.53%
    Taxable investment securities 1,577,146  25,692 1.63%  797,954  17,610 2.21%
    Tax-exempt investment securities (2)(4) 463,526  12,468 2.69%  342,000  10,395 3.04%
    Total securities held for investment(2) 2,040,672  38,160 1.87%  1,139,954  28,005 2.46%
    Other 52,617  91 0.17%  73,255  262 0.36%
    Total interest earning assets(2)$5,455,777  181,392 3.32% $4,765,154  189,019 3.97%
    Other assets 324,779      370,687    
    Total assets$5,780,556     $5,135,841    
    LIABILITIES AND SHAREHOLDERS’ EQUITY           
    Interest checking deposits$1,440,585 $4,208 0.29% $1,108,997 $4,435 0.40%
    Money market deposits 946,784  2,006 0.21%  844,137  3,696 0.44%
    Savings deposits 594,543  1,210 0.20%  454,000  1,386 0.31%
    Time deposits 882,271  5,774 0.65%  945,234  14,402 1.52%
    Total interest bearing deposits 3,864,183  13,198 0.34%  3,352,368  23,919 0.71%
    Short-term borrowings 191,757  551 0.29%  157,346  914 0.58%
    Long-term debt 178,395  6,736 3.78%  220,448  6,990 3.17%
    Total borrowed funds 370,152  7,287 1.97%  377,794  7,904 2.09%
    Total interest bearing liabilities$4,234,335 $20,485 0.48% $3,730,162 $31,823 0.85%
    Noninterest bearing deposits 974,044      832,038    
    Other liabilities 45,141      58,186    
    Shareholders’ equity 527,036      515,455    
    Total liabilities and shareholders’ equity$5,780,556     $5,135,841    
    Net interest income(2)  $160,907     $157,196  
    Net interest spread(2)    2.84%     3.12%
    Net interest margin(2)    2.95%     3.30%
                
    Total deposits(5)$4,838,227 $13,198 0.27% $4,184,406 $23,919 0.57%
    Cost of funds(6)    0.39%     0.70%

    (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 $11.2 million and $4.4 million for the years ended December 31, 2021 and December 31, 2020, respectively. Loan purchase discount accretion was $3.3 million and $9.1 million for the years ended December 31, 2021 and December 31, 2020, respectively. Tax equivalent adjustments were $2.1 million and $2.1 million for the years ended December 31, 2021 and December 31, 2020, respectively. The federal statutory tax rate utilized was 21%.
    (4) Interest income includes tax equivalent adjustments of $2.5 million and $2.1 million for the years ended December 31, 2021 and December 31, 2020, respectively. The federal statutory tax rate utilized was 21%.
    (5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
    (6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.

    Non-GAAP Measures

    This earnings release contains non-GAAP measures for tangible common equity, tangible book value per share, tangible common equity ratio, return on average tangible equity, net interest margin (tax equivalent), core net interest margin, loan yield (tax equivalent), core yield on loans, efficiency ratio, adjusted allowance for credit losses ratio, core loans, and core commercial loans. Management believes these measures provide investors with useful information regarding the Company’s profitability, financial condition and capital adequacy, consistent with how management evaluates the Company’s financial performance. The following tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP measure.

    Tangible Common Equity/Tangible Book Value
     
    per Share/Tangible Common Equity Ratio December 31,
    2021
    		 September 30,
    2021    		 June 30,
    2021    		 March 31,
    2021    		 December 31,  
    2020
    (Dollars in thousands, except per share data)     
    Total shareholders’ equity $527,475  $530,264  $530,293  $511,320  $515,250 
    Intangible assets, net  (82,362)  (83,607)  (84,871)  (86,212)  (87,719)
    Tangible common equity $445,113  $446,657  $445,422  $425,108  $427,531 
               
    Total assets $6,025,128  $5,875,423  $5,749,215  $5,737,312  $5,556,648 
    Intangible assets, net  (82,362)  (83,607)  (84,871)  (86,212)  (87,719)
    Tangible assets $5,942,766  $5,791,816  $5,664,344  $5,651,100  $5,468,929 
               
    Book value per share $33.66  $33.71  $33.22  $32.00  $32.17 
    Tangible book value per share(1) $28.40  $28.40  $27.90  $26.60  $26.69 
    Shares outstanding  15,671,147   15,729,451   15,963,468   15,981,088   16,016,780 
               
    Common equity ratio  8.75%  9.03%  9.22%  8.91%  9.27%
    Tangible common equity ratio(2)  7.49%  7.71%  7.86%  7.52%  7.82%

    (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)  2021   2021   2020   2021   2020 
    Net income $14,256  $16,311  $16,710  $69,486  $6,623 
    Intangible amortization, net of tax(1)  934   948   1,177   4,018   5,232 
    Goodwill impairment  —   —   —   —   31,500 
    Tangible net income $15,190  $17,259  $17,887  $73,504  $43,355 
               
    Average shareholders’ equity $529,336  $539,052  $505,506  $527,036  $515,455 
    Average intangible assets, net  (82,990)  (84,288)  (88,543)  (84,927)  (113,978)
    Average tangible equity $446,346  $454,764  $416,963  $442,109  $401,477 
               
    Return on average equity  10.68%  12.00%  13.15%  13.18%  1.28%
    Return on average tangible equity(2)  13.50%  15.06%  17.07%  16.63%  10.80%

    (1) The combined income tax rate utilized was 25%.
    (2) Annualized tangible net income divided by average tangible equity.

         
    Net Interest Margin, Tax Equivalent/
    Core Net Interest Margin
    		 Three Months Ended Year Ended
     December 31, September 30, December 31, December 31, December 31,
    (Dollars in thousands)  2021   2021   2020   2021   2020 
    Net interest income $38,819  $40,340  $39,037  $156,281  $152,964 
    Tax equivalent adjustments:          
    Loans(1)  548   507   556   2,105   2,096 
    Securities(1)  611   615   651   2,521   2,136 
    Net interest income, tax equivalent $39,978  $41,462  $40,244  $160,907  $157,196 
    Loan purchase discount accretion  (599)  (774)  (1,542)  (3,344)  (9,098)
    Core net interest income $39,379  $40,688  $38,702  $157,563  $148,098 
               
    Net interest margin  2.75%  2.92%  3.03%  2.86%  3.21%
    Net interest margin, tax equivalent(2)  2.83%  3.00%  3.13%  2.95%  3.30%
    Core net interest margin(3)  2.79%  2.94%  3.01%  2.89%  3.11%
    Average interest earning assets $5,607,117  $5,489,917  $5,117,669  $5,455,777  $4,765,154 

    (1) The federal statutory tax rate utilized was 21%.
    (2) Annualized tax equivalent net interest income divided by average interest earning assets.
    (3) Annualized core net interest income divided by average interest earning assets.

    Loan Yield, Tax Equivalent / Core Yield on Loans Three Months Ended Year Ended
     December 31, September 30, December 31, December 31, December 31,
    (Dollars in thousands)  2021   2021   2020   2021   2020 
    Loan interest income, including fees $33,643  $36,115  $38,239  $141,036  $158,656 
    Tax equivalent adjustment(1)  548   507   556   2,105   2,096 
    Tax equivalent loan interest income $34,191  $36,622  $38,795  $143,141  $160,752 
    Loan purchase discount accretion  (599)  (774)  (1,542)  (3,344)  (9,098)
    Core loan interest income $33,592  $35,848  $37,253  $139,797  $151,654 
               
    Yield on loans  4.08%  4.27%  4.27%  4.19%  4.47%
    Yield on loans, tax equivalent(2)  4.15%  4.33%  4.33%  4.26%  4.53%
    Core yield on loans(3)  4.08%  4.24%  4.16%  4.16%  4.27%
    Average loans $3,268,783  $3,356,680  $3,560,632  $3,362,488  $3,551,945 

    (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)  2021   2021   2020   2021   2020 
    Total noninterest expense $30,444  $29,778  $31,915  $116,592  $149,893 
    Amortization of intangibles  (1,245)  (1,264)  (1,569)  (5,357)  (6,976)
    Merger-related expenses  (224)  —   —   (224)  (61)
    Goodwill impairment  —   —   —   —   (31,500)
    Noninterest expense used for efficiency ratio $28,975  $28,514  $30,346  $111,011  $111,356 
               
    Net interest income, tax equivalent(1) $39,978  $41,462  $40,244  $160,907  $157,196 
    Noninterest income  11,229   9,182   10,626   42,453   38,620 
    Investment securities gains, net  (137)  (36)  (30)  (242)  (184)
    Net revenues used for efficiency ratio $51,070  $50,608  $50,840  $203,118  $195,632 
               
    Efficiency ratio (2)  56.74%  56.34%  59.69%  54.65%  56.92%

    (1) The federal statutory tax rate utilized was 21%.
    (2) Noninterest expense adjusted for amortization of intangibles, merger-related expenses, and goodwill impairment divided by the sum of tax equivalent net interest income, noninterest income and net investment securities gains.

               
    Adjusted Allowance for Credit Losses Ratio December 31, September 30, June 30, March 31, December 31,
    (Dollars in thousands)  2021   2021   2021   2021   2020 
    Loans held for investment, net of unearned income $3,245,012  $3,268,644  $3,330,156  $3,358,161  $3,482,223 
    PPP loans  (30,841)  (89,354)  (184,390)  (248,682)  (259,260)
    Core loans $3,214,171  $3,179,290  $3,145,766  $3,109,479  $3,222,963 
    Allowance for credit losses $48,700  $47,900  $48,000  $50,650  $55,500 
               
    Allowance for credit losses ratio  1.50%  1.47%  1.44%  1.51%  1.59%
    Adjusted allowance for credit losses ratio(1)  1.52%  1.51%  1.53%  1.63%  1.72%

    (1) Allowance for credit losses divided by core loans.

               
    Core Loans/Core Commercial Loans December 31, September 30, June 30, March 31, December 31,
    (Dollars in thousands) 2021 2021 2021 2021 2020
    Commercial loans:          
    Commercial and industrial $902,314  $927,258  $982,092  $993,770  $1,055,488 
    Agricultural  103,417   106,356   107,834   117,099   116,392 
    Commercial real estate  1,704,541   1,699,358   1,705,789   1,693,592   1,732,361 
    Total commercial loans $2,710,272  $2,732,972  $2,795,715  $2,804,461  $2,904,241 
    Consumer loans:          
    Residential real estate $466,322  $468,136  $468,581  $474,433  $499,106 
    Other consumer  68,418   67,536   65,860   79,267   78,876 
    Total consumer loans $534,740  $535,672  $534,441  $553,700  $577,982 
    Loans held for investment, net of unearned income $3,245,012  $3,268,644  $3,330,156  $3,358,161  $3,482,223 
               
    PPP loans $30,841  $89,354  $184,390  $248,682  $259,260 
               
    Core loans(1) $3,214,171  $3,179,290  $3,145,766  $3,109,479  $3,222,963 
    Core commercial loans(2) $2,679,431  $2,643,618  $2,611,325  $2,555,779  $2,644,981 

    (1) Core loans are calculated as loans held for investment, net of unearned income less PPP loans.
    (2) Core commercial loans are calculated as total commercial loans less PPP loans.

    Category: Earnings

    Source: MidWestOne Financial Group, Inc.

    Industry: Banks

    Contact:  
     Charles N. Funk Barry S. Ray
     Chief Executive Officer Senior Executive Vice President and Chief Financial Officer
     319.356.5800 319.356.5800

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