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NEWS RELEASE | | | |
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FOR IMMEDIATE RELEASE | | | |
| Contact: | | | | | |
| | Charles N. Funk | | Gary J. Ortale | | Woody Wallace | |
| | President & CEO | | EVP & CFO | | The Investor Relations Company | |
| &n bsp; | 319.356.5800 | | 319.356.5800 | | 312.245.2700 | |
| | | ; | | | wwallace@tirc.com | |
MIDWESTONE FINANCIAL GROUP, INC.
REPORTS FOURTH QUARTER 2010 FINANCIAL RESULTS
Iowa City, Iowa, January 27, 2011 - MidWestOne Financial Group, Inc., (NASDAQ - MOFG) today reported results for its fourth quarter and fiscal year ended December 31, 2010.
Net income for the fourth quarter of 2010 rose sharply to $2,735,000 compared with $1,616,000 for the same period last year. After dividends and discount accretion on the Company's preferred stock, net income available to common shareholders also rose to $2,517,000, or $0.29 per diluted share, compared with net income available to common shareholders of $1,400,000, or $0.16 per diluted share, in the fourth quarter of 2009.
Net income for the fourth quarter was higher than for the same period in 2009 primarily due to:
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| • | a 4.2% increase in net interest income, which was attributable in part to a 4 basis point increase in the net interest margin to 3.32%; |
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| • | a 22.5% increase in noninterest income, due primarily to a 189.5% increase in mortgage origination and loan servicing fees and the absence of any impairment losses on the Company's investment securities portfolio; and |
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| • | a 4.3% decrease in noninterest expense, due primarily to a 36.0% reduction in professional fees. |
Net income for the year 2010 totaled $10,130,000, more than a twofold increase compared with $4,409,000 of net income for 2009. After dividends and discount accretion on the Company's preferred stock, net income available to common shareholders also rose to $9,262,000, or $1.07 per diluted share, compared with net income available to common shareholders of $3,630,000, or $0.42 per diluted share, for 2009.
"We believe 2010 was a year of immense progress for MidWestOne. We are very pleased, not only with the earnings progress of the company, but also with most components of our income statement," stated President and Chief Executive Officer, Charles N. Funk. "We improved our net interest margin. We made solid progress in the key elements of non-interest income, especially in wealth management and with our participation in the fourth quarter home loan refinance surge. And, finally, we became more efficient as our non-interest expenses fell 5.0% from 2009."
Results of Operations
Net interest income for the fourth quarter of 2010 increased to $11,863,000, up $473,000, or 4.2%, from $11,390,000 for the fourth quarter of 2009. The continuing low interest rate environment and its impact on deposit and borrowed fund rates was the primary cause of the higher net interest income, as decreased interest expense on deposits of $639,000 and on Federal Home Loan Bank borrowings of $245,000, more than offset the decreased interest income from loans of $843,000. In addition, interest income on loan pool participations increased to $271,000 for the fourth quarter of 2010, compared to just $102,000 for the same period a year ago. The net interest margin for the fourth quarter, calculated on a fully tax-equivalent basis, amounted to 3.32% or 4 basis points higher than the 3.28% net interest margin for the fourth quarter of 2009. The Company posted a net interest margin of 3.43% for the full year 2010, up 16 basis points from 3.27% for the previous year.
The provision for loan losses for the fourth quarter was $1,700,000, a decrease of $50,000 from $1,750,000 in the fourth quarter of 2009, but more than the $1,392,000 of net loan charge-offs in the fourth quarter of 2010. The provision for loan losses for the full year 2010 was $5,950,000 compared with $7,725,000 in 2009. Management believes that potential problem credits have been identified and adequately reserved.
Noninterest income for the fourth quarter of 2010 rose to $4,305,000, up $791,000, or 22.5%, from $3,514,000 for the fourth quarter of 2009. This increase was primarily attributable to increased mortgage origination and loan servicing fees, combined with the absence of any impairment charges on the Company's investment securities portfolio. Mortgage origination and loan servicing fees totaled $1,523,000 for the fourth quarter of 2010, up 189.5% from $526,000 for the same period last year. The increase in mortgage origination and loan servicing fees was attributable to higher refinancing activity in single family residential loans during the fourth quarter of 2010 compared to the same period of 2009. The Company did not recognize any impairment losses on the investment securities portfolio during the fourth quarter compared to an impairment loss of $402,000 recognized in the fourth quarter a year ago. These improvements were partially offset by net losses on the sale of premises and equipment of $427,000 for the fourth quarter of 2010. Such losses resulted from the sale of certain bank branch buildings no longer utilized.
For the year 2010, noninterest income rose to $14,907,000, up $2,388,000, or 19. 1%, from $12,519,000 for 2009. The primary reason for this increase was lower impairment charges on investment securities for the year 2010 of $189,000, compared with the $2,404,000 of charges recognized during 2009. Mortgage origination and loan servicing fees increased by $736,000, or 26.6%, from $2,770,000 for the year ended December 31, 2009 to $3,506,000 for the same period of 2010. These improvements were partially offset by lower gains on the sale of investment securities and losses on the sale of fixed assets. For the year ended December 31, 2010, net gains on the sale of investment securities declined to $453,000, down $360,000, or 44.3%, from the comparable period in 2009. Losses on the sale of fixed assets totaled $709,000 for the twelve months of 2010 compared to a gain of $8,000 for the year of 2009. Such losses resulted from the sale of certain bank branch buildings no longer utilized.
Noninterest expense for the fourth quarter totaled $10,695,000, a decrease of $479,000, o r 4.3%, from $11,174,000 for the fourth quarter of 2009. Noninterest expense includes salaries and employee benefits, occupancy and equipment expense, FDIC insurance premiums, professional fees, data processing expense, and other operating expenses. The primary reasons for the lower noninterest expense for the quarter were a decrease in professional fees from $984,000 in the fourth quarter of 2009 to $630,000 for the same period of 2010, and a decrease in net occupancy and equipment expense from $1,878,000 for the fourth quarter of 2009 to $1,562,000 for the fourth quarter of 2010. These decreases were the result of management's cost control and efficiency efforts, most notably the closing of two branches in the third quarter of 2010.
For the full year 2010, all noninterest expense categories experienced decreases compared with the full year 2009, except for salaries and employee benefits, which showed a small increase. The most significant changes were in professional fees, which declined $901,000 to $2,734,000 for the year of 2010 compared with $3,635,000 in 2009, and other operating expense, which decreased to $6,267,000 in 2010 from $6,743,000 in 2009. The lower professional fees were primarily due to lower costs associated with Sarbanes-Oxley compliance efforts, which were high in 2009 due to that being the Company's first full year as an SEC reporting company.
Income tax expense was $1,038,000 for the fourth quarter of 2010 compared with expense of $364,000 for the same period in 2009, and income tax expense was $3,403,000 for the full year of 2010 compared with an income tax benefit of $79,000 for 2009. The increase for both the quarter and the year was primarily due to increased income for both periods, and the relative amount of of tax-exempt income on municipal bonds earned during the respective periods.
Balance Sheet and Asset Quality
Total assets increased slightly to $1.58 billion at December 31, 2010 from $1.53 billion at December 31, 2009. This growth resulted primarily from increased investment in securities, partially offset by a decrease in portfolio loans and loan pool participation balances. The asset growth was funded by an increase in both deposits and repurchase agreements. Total deposits at December 31, 2010 rose to $1.22 billion, an increase of $39.5 million, or 3.3%, from December 31, 2009, while securities sold under agreements to repurchase increased $7.1 million from $43.1 million at December 31, 2009, to $50.2 million at December 31, 2010.
Total bank loans (excluding loan pool participations and loans held for sale) decreased 3.0% to $938.0 million at December 31, 2010, compared with $967.0 million as of December 31, 2009. This was primarily due to a decline in construction, land development, and agriculture-related loans in the loan portfolio. Such a decrease was attributable to declining utilization rates on lines of credit and pay-downs on term debt as the economic environment caused many customers to actively reduce their borrowing position. At the end of the fourth quarter of 2010, the largest category of bank loans was commercial real estate, comprising 42% of the portfolio, of which 8% was farmland, 8% construction and development, and 3% multifamily. Residential real estate loans was the next largest category of bank loans at 24%, then, commercial and financial loans 23%, agricultural loans 9%, and consumer loans 2%.
During 2010, the Company experienced an increase in nonperforming loans. Specifically, these loans totaled $19.8 million as of December 31, 2010, or 2.11% of total bank loans, compared with $13.9 million at December 31, 2009, or 1.44% of total bank loans. However, nonperforming loans for the fourth quarter of 2010 decreased slightly from $20.2 million at September 30, 2010. The annual increase was primarily attributable to two agricultural loans totaling $3.3 million being added to troubled debt restructures coupled with an additional two agricultural loans totaling $4.5 million added to nonaccrual loans. These four a gricultural loans have significant exposure in the hog industry. Nonperforming loans at December 31, 2010 consisted of $12.4 million in nonaccrual loans, $5.8 million in troubled debt restructures and $1.6 million in loans past due 90 days or more and still accruing. Loans past-due 30 to 89 days (not included in the nonperforming loan totals) were $10.5 million as of December 31, 2010 compared with $10.1 million as of December 31, 2009. While nonperforming loan levels increased during the year of 2010, the increase has been primarily in credits that management had already identified as weak and for which it believes adequate provisions already had been made. The provision for loan losses in 2010 of $6.0 million was greater than total net loan charge-off of $4.7 million.
"We believe we have seen the worst of the recession in our markets, and our non-performing assets have stabilized. Generally, our agricultural loan quality has strengthened due to a strong crop year in most of our markets," Mr. Funk noted. As of year end, other real estate owned (not included in nonperforming loans) totaled $3.9 million, an increase of $215,000 from December 31, 2009. This increase is primarily attributable to the bank receiving title to a mixed use development valued at $2.5 million, offset by property sales during the year. As of December 31, 2010, the allowance for bank loan losses was $15.2 million, or 1.62% of total bank loans, compared with $14.0 million, or 1.44% of total bank loans, at prior year end. The allowance for loan losses represented 76.7% of nonperforming loans at December 31, 2010, compared with 100.6% of nonperforming loans at December 31, 2009. Due to the early identification of potential problem loans, we expected to have a decline in the ratio of the allowance for loan losses to nonperforming loans in 2010, as the previously performing loans moved to nonperforming status. The bank had net loan charge-offs of $4.7 million during 2010, or an annualized 0.50% of average bank loans outstanding.
Loan pool participations totaled $68.0 million at December 31, 2010, down from $85.2 million at December 31, 2009. Loan pool participations are participation interests in performing, sub-performing and nonperforming loans that have been purchased from various nonaffiliated banking organizations. The former MidWestOne had engaged in this activity since 1988. The Company has not purchased any new loan pool participations since January 2010, and intends
to exit this line of business as current balances pay dow n. "The loan pools have been a positive contributor to company earnings for much of their 22 year history," stated Funk. "However, we are community bankers at heart and we believe all of our available resources should be devoted to that which we do best---helping our customers achieve their financial goals."
The Company has very minimal exposure in loan pools to consumer real estate, subprime credit or construction and real estate development loans. The net “all-in” yield (excluding the purchase accounting adjustment and after all expenses) on loan pool participations was 1.65% for the fourth quarter of 2010, relatively flat from 1.73% for the fourth quarter of 2009. Yields were 3.88% and 3.21% for the full years 2010 and 2009, respectively. The net yield was higher in 2010 due to a stabilizat ion of charge-off levels and payment collections in the portfolio. Including loan pool participations, the loan to deposit ratio was 82.5% as of December 31, 2010, compared with 89.2% as of December 31, 2009.
Investment securities totaled $466.0 million at December 31, 2010, or 29.5% of total assets, up from $370.9 million, or 24.2% of total assets, as of December 31, 2009. A total of $462.0 million of the investment securities were classified as available for sale. The portfolio consisted mainly of U.S. government agencies (17.2%), mortgage-backed securities (38.6%), and obligations of states and political subdivisions (41.5%).
Capital Adequacy
Total shareholders' equity (including $16.0 million of senior preferred stock issued to the U.S. Treasury pursuant to the Capital Purchase Program) was $158.5 million as of December 31, 2010. The total shareholders' equity to total assets ratio was 10.02% at Decem ber 31, 2010, compared with 9.92% at December 31, 2009, while the tangible common equity to tangible assets ratio was 8.37% as of the same date, up from 8.16% at December 31, 2009. Tangible common equity pe r share was $15.27 at December 31, 2010, up from $14.42 per share at December 31, 2009, but lower than the $15.55 per share at September 30, 2010. The annual increase was primarily attributable to net income of $10.1 million for the year 2010, less the $800,000 of dividends paid during the year on the senior preferred stock issued to the U.S. Treasury. The decrease from September 30, 2010 was due to a reduction in unrecognized gains in our investment securities portfolio resulting from the rise in interest rates during the fourth quarter of 2010.
Other Developments
On January 18, 2011, the Company's Board of Directors declared a first quarter cash dividend of $0.05 per common share, which is consistent with the dividend paid in the fourth quarter of 2010. The dividend is payable March 15, 2011 to shareholders of record at the close of business on March 1, 2011. At this quarterly rate, the indicated annual cash dividend is equivalent to $0.20 per common share.
About MidWestOne Financial Group, Inc.
MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. The Company's bank subsidiary is also headquartered in Iowa City. MidWestOne Bank has office locations in Belle Plaine, Burlington, Cedar Falls, Conrad, Coralville, Davenport, Fairfield, Fort Madison, Melbourne, North English, North Liberty, Oskaloosa, Ottumwa, Parkersburg, Pella, Sigourney, Waterloo and West Liberty, Iowa. MidWestOne Insurance Services, Inc. provides personal and business insurance services in Pella, Melbourne and Oskaloosa, Iowa. MidWestOne Financial Group, Inc. common stock is traded on the NASDAQ Global Select Market under the symbol “MOFG.”
Non-GAAP Presentations:
We have traditionally disclosed certain non-GAAP ratios to evaluate and measure our operating performance and financial condition, including our net interest margin and tangible common equity to tangible assets ratio. We believe these ratios provide investors with information regarding our balance sheet profitability, financial condition and capital adequacy and how we evaluate such metrics internally. The tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
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| | | | As of | | As of | | As of | | As of | | As of |
| | | | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
| | | | 2010 | | 2010 | | 2010 | | 2010 | | 2009 |
| (in thousands) | | | | | | | | | | |
| Tangible Common Equity | | | | | | | | | | |
| Total shareholders' equity | | $ | 158,466 | | | $ | 161,116 | | | $ | 157,387 | | | $ | 154,158 | | | $ | 152,208 | |
| Less: Preferred equity | | (15,767 | ) | | (15,749 | ) | | (15,733 | ) | | (15,716 | ) | | (15,699 | ) |
| Goodwill and intangibles | | (11,243 | ) | | (11,506 | ) | | (11,761 | ) | | (12,016 | ) | | (12,272 | ) |
| Tangible common equity | | $ | 131,456 | | | $ | 133,861 | | | $ | 129,893 | | | $ | 126,426 | | | $ | 124,237 | |
| Tangible Assets | | | | | | | | | | |
| Total assets | | $ | 1,581,259 | | | $ | 1,553,528 | | | $ | 1,563,548 | | | $ | 1,542,061 | | | $ | 1,534,783 | |
| Less: Goodwill and intangibles | | (11,243 | ) | | (11,506 | ) | | (11,761 | ) | | (12,016 | ) | | (12,272 | ) |
| Tangible assets | | $ | 1,570,016 | | | $ | 1,542,022 | | | $ | 1,551,787 | | | $ | 1,530,045 | | | $ | 1,522,511 | |
| Tangible common equity/tangible assets | | 8.37 | % | | 8.68 | % | | 8.37 | % | | 8.26 | % | | 8.16 | % |
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| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Year Ended December 31, | | Three Months Ended Decemb er 31, | | Year Ended December 31, |
| | | 2010 | | 2010 | | 2009 | | 2009 |
| (in thousands) | | | | | | | |
| Net Interest Margin Tax Equivalent Adjustment | | | | | | | |
| Net interest income | $ | 11,863 | | | $ | 47,865 | | | $ | 11,390 | | | $ | 45,115 | |
| Plus tax equivalent adjustment: | | | | | | | |
| Loans | 79 | | | 324 | | | 150 | | | 418 | |
| Securities | 510 | | | 2,038 | | | 542 | | | 2,149 | |
Tax equivalent interest income (1) | $ | 12,452 | | | $ | 50,227 | | | $ | 12,082 | | | $ | 47,682 | |
| Average interest earning assets | $ | 1,488,855 | | | $ | 1,466,265 | | | $ | 1,462,3 43 | | | $ | 1,457,599 | |
| Net interest margin | 3.32 | % | | 3.43 | % | | 3.28 | % | | 3.27 | % |
(1) Computed on a tax-equivalent basis, assuming a federal income tax rate of 34% | | |
Cautionary Note Regarding Forward-Looking Statements
Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this document an d are based on current expectations and involve a number of assumptions. These include, among other things, statements regarding future results or expectations. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. Our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could cause actual results to differ from those set forth in the forward-looking statements or that could have a material effect on the operations and future prospects of the Company include, but are not limited to: (1) the strength and the local and national economy; (2) changes in interest rates, legislative/regulatory changes, monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board, and changes in the scop e and cost of Federal Deposit Insurance Corporation insurance and fees; (3) the loss of key executives or employees; (4) changes in the quality and composition of the Company's loan and securities portfolios, demand for loan products and deposit flows; (5) changes in the assumptions and estimates underlying the establishment of reserves for possible loan losses and other estimates; (6) the effects of competition and the overall demand for financial services in the Company's respective market areas; (7) our ability to implement new technologies and develop and maintain secure and reliable electronic systems; (8) changes in accounting principles, policies, and guidelines; (9) expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame; and (10) other risk factors detailed from time to time in filings made by the Company with the SEC.
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | | | | | | |
| | December 31,
2010 | | December 31, 2009 |
| (dollars in thousands) | (unaudited) | | |
| ASSETS | | | |
| Cash and due from banks | 13,720 | | | $ | 25,452 | |
| Interest-bearing deposits in banks | 6,077 | | | 2,136 | |
| Federal funds sold | 726 | | | — | |
| Cash and cash equivalents | 20,523 | | | 27,588 | |
| Investment securities: | | | |
| Available for sale | 461,954 | | | 362,903 | |
| Held to maturity (fair value 2010 $4,086; 2009 $8,118) | 4,032 | | | 8,009 | |
| Loans held for sale | 702 | | | 1,208 | |
| Loans | 938,035 | | | 966,998 | |
| Allowance for loan losses | (15,167 | ) | | (13,957 | ) |
| Net loans | 922,868 | | | 953,041 | |
| Loan pool participations, net | 65,871 | | | 83,052 | |
| Premises and equipment, net | 26,518 | | | 28,969 | |
| Accrued interest receivable | 10,648 | | | 11,534 | |
| Other intangible assets, net | 11,143 | | | 12,172 | |
| Bank-owned life insurance | 26,772 | | | 18,118 | |
| Other real estate owned | 3,850 | | | 3,635 | |
| Deferred income taxes | 6,430 | | | 5, 163 | |
| Other assets | 19,948 | | | 19,391 | |
| Total assets | $ | 1,581,259 | | | $ | 1,534,783 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Deposits: | | | |
| Non-interest bearing demand | 129,978 | | | $ | 133,990 | |
| Interest-bearing checking | 442,878 | | | 401,264 | |
| Savings | 74,826 | | | 62,989 | |
| Certificates of deposit under $100,000 | 380,082 | | | 394,369 | |
| Certificates of deposit $100,000 and over | 191,564 | | | 187,256 | |
| Total deposits | 1,219,328 | | | 1,179,868 | |
| Federal funds purchased | — | | | 1,875 | |
| Securities sold under agreements to repurchase | 50,194 | | | 43,098 | |
| Federal Home Loan Bank borrowings | 127,200 | | | 130,200 | |
| Deferred compensation liabil ity | 3,712 | | | 3,832 | |
| Long-term debt | 15,464 | | | 15,588 | |
| Accrued interest payable | 1,872 | | | 2,248 | |
| Other liabilities | 5,023 | | | 5,866 | |
| Total liabilities | 1,422,793 | | | 1,382,575 | |
| | | | |
| Shareholders' equity: | | | |
| Preferred stock, no par value, with a liquidation preference of $1,000 per share; authorized 500,000 | | | |
| shares; issued 16,000 shares as of December 31, 2010 and December 31, 2009 | 15,767 | | | $ | 15,699 | |
| Common stock, $1 par value; authorized 15,000 ,000 shares at December 31, 2010 and December 31, 2009; | | | |
| issued 8,690,398 shares at December 31, 2 010 and December 31, 2009; outstanding 8,614,790 shares | | | |
| at December 31, 2010 and 8,605,333 shares at December 31, 2009 | 8,690 | | | 8,690 | |
| Additional paid-in capital | 81,268 | | | 81,179 | |
| Treasury stock at cost, 75,608 shares as of December 31, 2010 and 85,065 shares at December 31, 2009 | (1,052 | ) | | (1,183 | ) |
| Retained earnings | 55,619 | | | 48,079 | |
| Accumulated other comprehensive income (loss) | (1,826 | ) | | (256 | ) |
| Total shareholders' equity | 158,466 | &n bsp; | | 152,208 | |
| Total liabilities and shareholders' equity | $ | 1,581,259 | | | $ | 1,534,783 | |
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| | | | | | | | | | | | | | | | |
(unaudited)
(dollars in thousands, except per share amounts) | | Three Months Ended
December 30, | | Years Ended
December 31, |
| | | 2010 | | 2009 | | 2010 | | 2009 |
| Interest income: | | | | | | | | |
| Interest and fees on loans | | $ | 13,489 | | | $ | 14,332 | | | $ | 54,731 | | | $ | 58,697 | |
| Interest and discount on loan pool participations | | 271 | | | 102 | | | 2,631 | | | 1,809 | |
| Interest on bank deposits | | 5 | | | 7 | | | 34 | | | 11 | |
| Interest on federal funds sold | | 2 | | | 3 | | | 6 | | | 47 | |
| Interest on investment securities: | | | | | | | | |
| Taxable securities | | 2,552 | | | 2,368 | | | 9,667 | | | 8,797 | |
| Tax-exempt securities | | 990 | | | 1,009 | | | 3,912 | | | 3,997 | |
| Total interest income | | 17,309 | | | 17,821 | | | 70,981 | | | 73,358 | |
| | | | | | | | | |
| Interest expense: | | | | | | | | |
| Interest on deposits: | | | | | | | | |
| Interest-bearing checking | | 1,047 | | | 1,051 | | | 4,260 | | | 4,501 | |
| Savings | | 57 | | | 39 | | | 183 | | | 213 | |
| Certificates of deposit under $100,000 | | 2,229 | | &nb sp; | 2,616 | | | 9,538 | | | 11,871 | |
| Certificates of deposit $100,000 and over | | 855 | | | 1,121 | | | 3,599 | | | 5,026 | |
| Total interest expense on deposits | | 4,188 | | | 4,827 | | | 17,580 | | | 21,611 | |
| Interest on federal funds purchased | | — | | | — | | | 6 | | | 11 | |
| Interest on securities sold under agreements to repurchase | | 76 | | | 105 | | | 297 | | | 453 | |
| Interest on Federal Home Loan Bank borrowings | | 1,090 | | | 1,335 | | | 4,650 | | | 5,450 | |
| Interest on other borrowings | | 15 | | | 11 | | | 49 | | | 60 | |
| Interest on long-term debt | | 77 | | | 153 | | | 534 | | | 658 | |
| Total interest expense | | 5,446 | | | 6,431 | | | 23,116 | | | 28,243 | |
| Net interest income | | 11,863 | | | 11,390 | | | 47,865 | | | 45,115 | |
| Provision for loan losses | | 1,700 | | | 1,750 | | | 5,950 | | | 7,725 | |
| Net interest income after provision for loan losses | | 10,163 | | | 9,640 | | | 41,915 | | | 37,390 | |
| | | | | | | | | |
| Noninterest income: | | | | | | | | |
| Trust and investment fees | | 1,059 | | | 1,059 | | | 4,556 | | | 4,180 | |
| Service charges and fees on deposit accounts | | 1,026 | | | 1,013 | | | 4,042 | | | 3,988 | |
| Mortgage origination and loan servicing fees | | 1,523 | | | 526 | | | 3,506 | | | 2,770 | |
| Other service charges, commissions and fees | | 770 | | | 783 | | | 2,563 | | | 2,386 | |
| Bank-owned life insurance income | | 213 | | | 202 | | | 685 | | | 778 | |
| Investment securities losses, net: | | | | | | | | |
| Impairment losses on investment securities | | — | | | (402 | ) | | (189 | ) | | (2,404 | ) |
| Less noncredit-related losses | | — | | | — | | | — | | | — | |
| Net impairment losses | | — | | | (402 | ) | | (189 | ) | | (2,404 | ) |
| Gain on sale of available for sale securities | | 141 | | | 322 | | | 453 | | | 813 | |
| Loss on sale of premises and equipment | | (427 | ) | | 11 | | | (709 | ) | | 8 | |
| Total noninterest income | | 4,305 | | | 3,514 | | | 14,907 | | | 12,519 | |
| | | | | | | | | |
| Noninterest expense: | | | | | | | | |
| Salaries and employee benefits | | 5,851 | | | 5,689 | | | 23,170 | | | 23,152 | |
| Net occupancy and equipment expense | | 1,562 | | | 1,878 | | | 6,566 | | | 6,961 | |
| Professional fees | | 630 | | | 984 | | | 2,734 | | | 3,635 | |
| Data processing expense | | 410 | | | 399 | | | 1,702 | | | 1,844 | |
| FDIC Insurance expense | | 727 | | | 676 | | | 2,850 | | | 3,244 | |
| Other operating expense | | 1,515 | | | 1,548 | | | 6,267 | | | 6,743 | |
| Total noninterest expense | | 10,695 | | | 11,174 | | | 43,289 | | | 45,579 | |
| Income before income tax expense | | 3,773 | | | 1,980 | | | 13,533 | | | 4,330 | |
| Income tax expense | | 1,038 | | | 364 | | | 3,403 | | | (79 | ) |
| Net income | | $ | 2,735 | | | $ | 1,616 | | | $ | 10,130 | | | $ | 4,409 | |
| Less: Preferred stock dividends and discount accretion | | $ | 218 | | | $ | 216 | | | $ | 868 | | | $ | 779 | |
| Net income available to common shareholders | | $ | 2,517 | | | $ | 1,400 | | | $ | 9,262 | | | $ | 3,630 | |
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MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
| | | | | | | | | | | | | | | | | | | |
| | December 31,
2010 | | September 30,
2010 | | June 30,
2010 | | March 31,
2010 | | December 31,
2009 |
| (unaudited, dollars in thousands, except per share amounts) | | | | | | | | | |
| Per share data: | | | | | | | | | |
| Book value per share | $ | 18.39 | | | $ | 18.70 | | | $ | 18.27 | | | $ | 17.90 | | | $ | 17.69 | |
| Tangible common equity per share | 15.27 | | | 15.55 | | | 15.09 | | | 14.70 | | | 14.42 | |
| Financial Ratios: | | | | | | | | | |
| Tangible common equity/tangible assets | 8.37 | % | | 8.68 | % | | 8.37 | % | | 8.26 | % | | 8.16 | % |
| Total shareholders' equity/total assets | 10.02 | % | | 10.37 | % | | 10.07 | % | | 10.00 | % | | 9.92 | % |
| Total bank loans/total deposits | 76.93 | % | | 80.84 | % | | 79.98 | % | | 80.01 | % | | 81.96 | % |
| Total loans + loan pools/total deposits | 82.51 | % | | 87.03 | % | | 86.59 | % | | 87.02 | % | | 89.18 | % |
| Asset Quality | | | | | | | | | |
| Gross bank loans | $ | 938,035 | | | $ | 956,324 | | | $ | 956,187 | | | $ | 954,689 | | | $ | 966,998 | |
| Allowance for bank loan losses | 15,167 | | | 14,859 | | | 14,823 | | | 14,553 | | | 13,957 | |
| Net charge-offs (YTD) | 4,740 | | | 3,348 | | | 2,134 | | | 904 | | | 4,745 | |
| Bank loans past due 30 - 89 days | 10,482 | | | 8,695 | | | 8,947 | | | 11,078 | | | 10,075 | |
| Other real estate owned | 3,850 | | | 4,738 | | | 2,634 | | | 2,547 | | | 3,635 | |
| Non-performing bank loans | | | | | | | | | |
| Non-accrual loans | $ | 12,405 | | | $ | 12,710 | | | $ | 10,525 | | | $ | 10,790 | | | $ | 9,885 | |
| Restructured loans | 5,797 | | | 6,279 | | | 6,409 | | | 3,565 | | | 2,555 | |
| Loans 90+ days past due | 1,579 | | | 1,179 | | | 2,954 | | | 1,985 | | | 1,439 | |
| Total non-performing bank loans | 19,781 | | | 20,168 | | | 19,888 | | | 16,340 | | | 13,879 | |
| | | | | | | | | | |
| Gross loan pools | $ | 68,005 | | | $ | 73,294 | | | $ | 79,023 | | | $ | 83,652 | | | $ | 85,186 | |
| Allowance for loan pool losses | 2,134 | | | 2,134 | | | 2,134 | | | 2,134 | | | 2,134 | |
| Net bank loan charge-offs/average bank loans (YTD - annualized) | 0.50 | % | | 0.48 | % | | 0.45 | % | | 0.38 | % | | 0.48 | % |
| Nonperforming bank loans/total bank loans | 2.11 | % | | 2.11 | % | | 2.08 | % | | 1.71 | % | | 1.44 | % |
| Nonperforming bank loans + other real estate/total assets | 1.49 | % | | 1.60 | % | | 1.44 | % | | 1.22 | % | | 1.14 | % |
| Allowance for bank loan losses/total bank loans | 1.62 | % | | 1.55 | % | | 1.55 | % | | 1.52 | % | | 1.44 | % |
| Allowance for loan pool losses/total loan pools | 3.14 | % | | 2.91 | % | | 2.70 | % | | 2.55 | % | | 2 .51 | % |
| Allowance for bank loan losses/nonperforming bank loans | 76.67 | % | | 73.68 | % | | 74.53 | % | | 89.06 | % | | 100.56 | % |
| | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Years Ended December 31, | | |
| | | 2010 | | 2009 | | 2010 | | 2009 | | |
| Per share data: | | | | | | | | | | |
| Ending number of shares outstanding | | 8,614,790 | | | 8,605,333 | | | 8,614,790 | | | 8,605,333 | | | |
| Average number of shares outstanding | | 8,614,193 | | | 8,605,333 | | | 8,612,117 | | | 8,604,733 | | | |
| Diluted average number of shares | | 8,648,451 | | | 8,606,316 | | | 8,637,713 | | | 8,604,754 | | | |
| Earnings per common share - basic | | $ | 0.30 | | | $ | 0.16 | | | $ | 1.08 | | | $ | 0.42 | | | |
| Earnings per common share - diluted | | 0.29 | | | 0.16 | | | 1.07 | | | 0.42 | | | |
| Dividends paid per common share | | 0.05 | | | 0.05 | ; | | 0.20 | | | 0.30 | | | |
| Performance Ratios: | | | | | | | | | | |
| Return on average assets | | 0.68 | % | | 0.41 | % | | 0.65 | % | | 0.29 | % | | |
| Return on average shareholders' equity | | 6.72 | % | | 4.21 | % | | 6.44 | % | | 2.99 | % | | |
| Return on average tangible common equity | | 7.43 | % | | 4.48 | % | | 7.14 | % | | 3.00 | % | | |
| Net interest margin (FTE) | | 3.32 | % | | 3.28 | % | | 3.43 | % | | 3.27 | % | | |
| Average Balances: | | | | | | | | | | |
| Total bank loans, net | | $ | 930,474 | | | $ | 954,190 | | | $ | 940,738 | | | $ | 990,540 | | | |
| Total loan pools, net | | 68,294 | | | 86,585 | | | 76,016 | | | 92,456 | | | |
| Interest-earning assets | | 1,488,855 | | | 1,462,343 | | | 1,466 ,265 | | | 1,457,599 | | | |
| Total assets | | 1,584,616 | | | 1,549,913 | | | 1,559,042 | | | 1,543,307 | | | |
| Interest-bearing deposits | | 1,066,444 | | | 1,041,648 | | | 1,054,069 | | | 1,035,938 | | | |
| Interest-bearing liabilities | | 1,262,648 | | | 1,243,562 | | | 1,246,655 | | | 1,251,460 | | | |
| Stockholders' common equity | | 145,770 | | | 136,444 | | | 141,462 | | | 133,372 | | | |
| Total equity | | 161,518 | | | 152,135 | | | 157,196 | | | 147,544 | | | |
