MidWestOne Financial (MOFG) 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information is based on the historical financial statements of ISB Financial Corp. (“ISBF”) and MidWestOne Financial Group (“MWFG”) and has been prepared to illustrate the effects of the merger of MWFG with and into ISBF, as described in the pro forma financial statements, under the purchase method of accounting and the adjustments as described in the accompanying notes to the unaudited pro forma combined condensed consolidated financial statements.

The unaudited pro forma consolidated balance sheet reflects the historical position of ISBF and MWFG at December 31, 2007 with pro forma adjustments based on the assumption that the merger was consummated on that date. The unaudited pro forma consolidated statement of income for December 31, 2007 assumes that the merger was completed on January 1, 2007. Although the pro forma statements assume merger dates earlier than actual, wherever possible, amounts reflective of actual merger date events are utilized within these pro forma statements.

The unaudited pro forma financial statements are not necessarily indicative of either the results of operations or financial condition that would have been achieved had the merger in fact occurred on the dates indicated, nor do they purport to be indicative of results of operations or financial condition that may be achieved in the future by the combined company. The unaudited pro forma earnings amounts do not reflect any potential earnings enhancements or cost reductions that may result from the consolidation of ISBF and MWFG operations and are not necessarily indicative of the results expected of future combined operations. We cannot give any assurances with respect to the ultimate level of earnings enhancements or cost reductions to be realized. Further, consistent with applicable accounting guidelines, all purchase accounting adjustments are subject to revision for a period of up to one-year from the date of the date of the merger as additional information becomes available that would affect our original purchase price allocations.

The unaudited pro forma financial statements and related footnotes should be read in conjunction with, and are qualified in their entirety by, the consolidated financial statements and accompanying notes of each of ISBF’s Annual Report to Shareholders for the year ended December 31, 2007 and MWFG’s Annual Report on Form 10-K for the year ended December 31, 2007.

MIDWESTONE FINANCIAL GROUP, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

As of December 31, 2007

(dollars in thousands, except per share data)

	Historical						Pro Forma Before Entries			Purchase Accounting Adjustments						Pro Forma After Entries
	ISBF			MidWestOne						Debits			Credits
Assets
Cash and due from banks	$	16,378		$	26,128		$	42,506		$	—		$	2,364	(m),(n)	$	40,142
Federal funds sold		17,842			—			17,842			—			—			17,842
Investment securities		232,220			86,681			318,901			217	(a)		—			319,118
Loans (net of unearned interest)		401,554			536,051			937,605			—			9,429	(b),(p)		928,176
Allowance for loan losses		(5,466	)		(5,348	)		(10,814	)		1,047	(p)		—			(9,767	)
Net loans		396,088			530,703			926,791			1,047			9,429			918,409
Loan pool participations		—			93,058			93,058			—			1,237	(c)		91,821
Premises and equipment		11,802			13,927			25,729			2,000	(d)		—			27,729
Loans held for sale		2,709			—			2,709			—			—			2,709
Other real estate owned		—			1,303			1,303			—			—			1,303
Goodwill		4,356			13,405			17,761			30,340	(o)		13,405	(e)		34,696
Core deposit intangible		—			410			410			10,138	(k)		410	(e)		10,138
Other intangibles		268			466			734			451	(l)		466	(e)		719
Other assets (includes deferred taxes)		20,320			18,380			38,700			1,248	(j)		—			39,948
Total assets	$	701,983		$	784,461		$	1,486,444		$	45,441		$	27,311		$	1,504,574
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Non-interest bearing	$	66,340		$	65,492		$	131,832		$	—		$	—		$	131,832
Interest-bearing		460,275			509,297			969,572			—			105	(f)		969,677
Total deposits		526,615			574,789			1,101,404			—			105			1,101,509
Federal funds purchased and securities
sold under agreements to repurchase		45,997			35,725			81,722			—			—			81,722
Federal Home Loan Bank advances		47,000			85,600			132,600			602	(g)		—			131,998
Trust preferred securities		—			15,464			15,464			—			312	(h)		15,776
Other liabilities		4,979			8,328			13,307			—			—			13,307
Total liabilities	$	624,591		$	719,906		$	1,344,497		$	602		$	417		$	1,344,312
Stockholders’ Equity
Common stock	$	5,165		$	24,564			29,729			24,564	(i)		3,520	(n)	$	8,685
Surplus		100			13,233			13,333			13,233	(i)		79,350	(n)		79,450
Retained earnings		72,333			44,043			116,376			44,043	(i)		—			72,333
Accumulated other comprehensive income (loss)		(206	)		165			(41	)		165	(i)		—			(206	)
Total stockholders’ equity before treasury		77,392			82,005			159,397			82,005			82,870			160,262
stock								—
Treasury stock		—			(17,450	)		(17,450	)					17,450	(i)		—
Total stockholders’ equity		77,392			64,555			141,947			82,005			100,320			160,262
Total liabilities and stockholders’ equity	$	701,983		$	784,461		$	1,486,444		$	82,607		$	100,737		$	1,504,574

See Notes to Unaudited Pro Forma Combined Financial Statements

Following are estimates and assumptions for purchase accounting adjustments. Actual adjustments will be determined at transaction date and may differ significantly from this pro forma disclosure.

(a) Increase carrying value of MidWestOne’s held-to-maturity investment securities by $ 217,000 to fair market value; fair market value adjustment to be amortized over remaining life for each security on a level-yield basis.

(b) Reduce carrying value of MidWestOne’s loans to fair market value and removes previously-deferred loan origination fees; fair market value adjustment to be accreted over average life of portfolio on a level-yield basis.

(c) Reduce carrying value of MidWestOne’s loan pool participations to fair market value; fair market value adjustment to be accreted over average life of portfolio on a level-yield basis.

(d) Increase carrying value of MidWestOne’s premises and equipment to fair market value; estimated fair market value adjustment to be amortized on straight-line basis over 15 years.

(e) Eliminate existing MidWestOne goodwill, core deposit, and customer list intangible asset.

(f) Adjust MidWestOne time deposits to fair market value; estimated fair market value adjustment to be accreted over the average life of time deposit portfolio on a level-yield basis.

(g) Adjust FHLB advances to fair market value; estimate fair market value adjustment to be accreted on individual advances over remaining term on a level-yield basis.

(h) Adjust Junior subordinated debentures to fair market value; estimate fair market value adjustment to be amortized over the remaining term on a level-yield basis.

(i) Eliminate MidWestOne stockholders’ equity.

(j) Net impact of deferred tax entries on purchase accounting adjustments.

(k) Record core deposit intangible, estimated at 4% of MidWestOne deposits, excluding certificates of deposit, anticipated to be amortized on an accelerated method over 10 year period.

	Amortization
Year 1	$	1,843
Year 2		1,659
Year 3		1,475
Year 4		1,290
Year 5		1,106
Year 6		922
Year 7		737
Year 8		553
Year 9		369
Year 10		184
	$	10,138

(l) Record customer list intangible, anticipated to be amortized on an accelerated basis over 5 year period.

	Amortization
Year 1	$	151
Year 2		121
Year 3		90
Year 4		60
Year 5		30
	$	452

(m) Additional cash merger costs expected by ISB Financial and MidWestOne.

(n)	MidWestOne shares outstanding as of March 14, 2008		3,705,170
	Fixed exchange ratio per merger agreement		0.95
	Total ISB Financial common shares to be issued		3,519,912
	Fair value per share of ISB Financial stock	$	23.23
	Fair value of stock consideration (dollars in thousands)	$	81,768
	MidWestOne stock options outstanding		417,032
	Fixed exchange ratio per merger agreement		0.95
	ISB Financial options to be granted		396,180
	Estimated per share fair value of ISB Financial stock options to be granted	$	2.79
	Fair value of stock option consideration (dollars in thousands)		1,105
	Total Stock and Stock Option Consideration (dollars in thousands)		82,873
	Merger costs incurred by ISB Financial:
	Professional fees (legal and accounting)		541
	Investment banking fees		300
	Proxy printing		124
	Stock registration		103
	Consulting & miscellaneous		46
	ISB Financial capitalized merger expenses	$	1,114
	Total Purchase Price		83,987
	MidWestOne Equity prior to Transaction		64,555
	Merger expenses		1,249
	Pre-existing goodwill and other intangibles		(14,281	)
	Adjusted Equity @ closing		51,523
	Purchase price to be allocated		32,464
	HTM Investment fair market value adjustment		217
	Loans fair market value adjustment		(8,382	)
	Purchased Loan Pools fair market value adjustment		(1,237	)
	Premises and equipment fair market value adjustment		2,000
	Time deposit fair market value adjustment		(105	)
	FHLB advances fair market value adjustment		602
	Junior subordinated debenture fair market value adjustment		(312	)
	Core deposit intangible		10,138
	MidwestOne Investment Service customer list		149
	MidWestOne Insurance Service customer list		302
	less Deferred Tax Asset/Liability on above		(1,248	)
	Purchase Accounting Adjustments		2,124
	Goodwill		30,340
	Par value of common shares to be issued ($1/share)		3,520
	Addition to surplus on common stock to be issued		78,248
	Reduction to surplus for fractional shares issued		(3	)
	Addition to surplus on fair value of stock options to be issued		1,105
	Net increase in Shareholders’ Equity		82,870

(o) Estimated goodwill related to total transaction cost in excess of net assets acquired: refer to (n).

(p) Reduce carrying value of MidWestOne’s FAS 114 impaired loans to fair market value.

MIDWESTONE FINANCIAL GROUP, INC.

UNAUDITED PRO FORMA STATEMENT OF INCOME

For the Year Ended December 31, 2007

(dollars in thousands, except per share data)

										Purchase Accounting
							Pro Forma			Transaction						Pro Forma
	Historical						Before			Adjustments						After
	ISBF			MidWestOne			Entries			Debits			Credits			Entries
Interest Income
Loans	$	27,564		$	38,640		$	66,204		$	—		$	1,197	(b)		67,401
Loan pool participations		—			7,802			7,802			—			247	(c)		8,049
Securities		10,193			3,725			13,918			44	(a)					13,874
Federal funds sold and other		548			99			647			—			—			647
Total Interest Income		38,305			50,266			88,571			44			1,444			89,971
Interest Expense
Deposits		14,798			19,716			34,514			—			105	(e)		34,409
Federal funds purchased and repurchase agreements and short-term borrowings		2,114			491			2,605			—			—			2,605
Federal Home Loan Bank advances		2,023			4,584			6,607			301	(f)		—			6,908
Long-term debt		103			308			411			—			—			411
Junior subordinated debt owed to unconsolidated trusts		—			1,251			1,251			—			10	(g)		1,241
Total Interest Expense		19,038			26,350			45,388			301			115			45,574
Net interest income before provision
for loan losses		19,267			23,916			43,183			345			1,559			44,397
Provision for loan losses		500			982			1,482			—			—			1,482
Net interest income after provision
for loan losses		18,767			22,934			41,701			345			1,559			42,915
Noninterest income
Trust and investment fees		3,688			815			4,503			—			—			4,503
Service charges on deposit accounts		2,082			2,113			4,195			—			—			4,195
Gain on sale of mortgage loans and servicing fees		1,208			552			1,760			—			—			1,760
Other service fees and commissions		2,084			2,460			4,544			—			—			4,544
Investment securities gains (losses), net		(256	)		(40	)		(296	)		—			—			(296	)
Total noninterest income		8,806			5,900			14,706			—			—			14,706
Noninterest expense
Salaries and employee benefits		10,926			12,401			23,327			—						23,327
Occupancy		1,353			3,492			4,845			133	(d)		—			4,978
Equipment		1,625			1,588			3,213			—			—			3,213
Office supplies, postage, and telephone		1,013			662			1,675			—			—			1,675
Other		3,703			4,276			7,979			1,994	(h),(l)		252	(j)		9,721
Total other expenses		18,620			22,419			41,039			2,127			252			42,914
Income before taxes		8,953			6,415			15,368			2,472			1,811			14,707
Income taxes		2,305			2,153			4,458			—			245	(k)		4,213
Net Income	$	6,648		$	4,262		$	10,910		$	2,472		$	2,056		$	10,494
Net income for common stockholders	$	6,648		$	4,262											$	10,494
Basic earnings per common share	$	1.29		$	1.15											$	1.21
Diluted earnings per common share	$	1.29		$	1.14											$	1.20
Basic weighted average common shares outstanding		5,170,898			3,702,159						3,702,159			3,519,788			8,690,686
Diluted weighted average common shares outstanding		5,172,558			3,735,618												8,722,472

See Notes to Unaudited Pro Forma Combined Financial Statements

Following are estimates and assumptions for purchase accounting adjustments for Unaudited Pro Forma Combined Statement of Income for the Year Ended December 31, 2007. Actual adjustments will be determined at the completion of the fair market valuation and may differ significantly from this pro forma disclosure.

(a)	Amortization of purchase accounting adjustment on investments acquired over expected five-year life.	44
(b)	Accretion of purchase accounting adjustment on acquired loans over expected seven-year life.	(1,197	)
(c)	Accretion of purchase accounting adjustment on acquired loan pools over expected five-year life.	(247	)
(d)	Amortization of purchase accounting adjustment on acquired premises and equipment on straight- line basis over estimated remaining life of 15 years.	133
(e)	Accretion of purchase accounting adjustment on time deposits over expected one-year life.	(105	)
(f)	Amortization of purchase accounting adjustment on FHLB advances over expected two-year life.	301
(g)	Accretion of purchase accounting adjustment on trust preferred securities over 30 year term.	(10	)
(h)	Amortization of core deposit intangible on accelerated basis over expected ten-year life.	1,843
(i)	Amortization of customer list intangible on accelerated basis over expected five-year life	151
(j)	Elimination of amortization expense on existing MidWestOne intangible assets	(252	)
(k)	Tax benefit of amortization and accretion of purchase accounting adjustments assuming a combined marginal tax rate of 37%.	(245	)