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| NEWS RELEASE | | |
| | | | | | | |
| FOR IMMEDIATE RELEASE | | |
| Contact: | | | | | |
| | Charles N. Funk | | Gary J. Ortale | | Steven Carr | |
| | President & CEO | | EVP & CFO | | Dresner Corporate Services | |
| | 319.356.5800 | | 319.356.5800 | | 312.726.3600 | |
MIDWESTONE FINANCIAL GROUP, INC.
REPORTS FIRST QUARTER 2014 FINANCIAL RESULTS
Iowa City, Iowa, April 24, 2014 - MidWestOne Financial Group, Inc. (NASDAQ - MOFG), today reported results for its three months ended March 31, 2014. Net income for the first quarter of 2014 rose to $5.0 million, compared with $4.8 million for the same period last year. Diluted earnings per share were $0.58 for the first quarter of 2014, compared with $0.56 for the first quarter of 2013.
Earnings comparisons between the first quarter of 2014 and the same period in 2013 were driven primarily by:
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| • | a 5.5% decrease in noninterest expense; and |
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| • | a 5.9% increase in noninterest income, primarily due to increased gains on the sale of investment securities available for sale; partially offset by |
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| • | a 1.9% decrease in net interest income. |
“We are pleased with our net income for the first quarter as well as our return on tangible equity of 11.90%, which was achieved on a tangible equity to tangible asset ratio of 10.04%,” stated President and Chief Executive Officer, Charles N. Funk. “We also acknowledge that revenue growth continues to be extremely difficult in the current environment.”
Results of Operations
Net interest income for the first quarter of 2014 decreased $0.3 million, or 1.9%, from $13.8 million for the first quarter of 2013, to $13.5 million. Loan interest income decreased $0.2 million, or 1.4%, to $11.9 million for the first quarter of 2014, compared to $12.1 million for the same period of 2013, despite an increase in average loan balances, due primarily to the generally low interest rate environment and increased market competition for quality borrowers. Income from investment securities decreased to $3.7 million for the first quarter of 2014 compared to $4.0 million for the first quarter of 2013, due mainly to a decrease of $66.2 million in the average balance of investment securities between the two comparable periods. Income from loan pool participations was $0.3 million for the first quarter of 2014, a decrease of $0.8 million compared to the same period a year ago, on a significantly lower level of investment in 2014, as the Company continues to exit this line of business as balances pay down. Loan pool participation income is accounted for on a cash basis when actual payments are received, which can cause income related to this item to vary widely from quarter to quarter. Interest expense decreased $1.0 million, or 29.6%, to $2.4 million for the first quarter of 2014, compared to $3.4 million for the same period of 2013, primarily due to lower expense on deposit accounts resulting from the maturity of higher rate certificates of deposit.
The net interest margin for the first quarter of 2014, calculated on a fully tax-equivalent basis, was 3.55%, or 4 basis points higher than the 3.51% net interest margin for the first quarter of 2013. Lower yields being paid on interest-bearing liabilities more than offset the lower rates received on interest-earning assets.
The provision for loan losses for the first quarter of 2014 was $0.5 million, an increase of $0.3 million from $0.2 million in the first quarter of 2013. A large loan loss recovery in the first quarter of 2013 resulted in a lower loan loss provision in that period, and was the primary reason for the increase between comparable periods.
Noninterest income for the first quarter of 2014 increased to $4.2 million, up $0.2 million, or 5.9%, from $4.0 million in the first quarter of 2013, primarily due to an increase in gain on sale of investment securities of $0.7 million to $0.8 million for
the first quarter of 2014, compared to $0.1 million for the same quarter of 2013. The increase was mainly due to a gain on the sale of the remaining CDO investment securities in the Company’s portfolio in an improved market environment. Trust, investment, and insurance fees increased by $0.2 million, or 12.5%, to $1.5 million during the first quarter of 2014, compared with $1.3 million in the first quarter of 2013, primarily as a result of increased trust department and investment center fee income. These increases were partially offset by a decrease in mortgage origination and loan servicing fees of $0.6 million, or 58.1%, to $0.4 million for the first quarter of 2014, compared to $1.0 million for the same quarter of 2013. The decline was primarily due to a decrease in loans originated for sale on the secondary market, as the demand for mortgage refinancing continued to decline. Service charges and fees on deposit accounts declined from $0.7 million for the first quarter of 2013 to $0.6 million for the first quarter of 2014, a decrease of $0.1 million, or 11.2%, mainly due to lower NSF check fees.
“We were very happy with the ultimate position of our primary regulators regarding the exemption of certain CDOs from the limitations imposed by the Volcker Rule. As a result, we were able to liquidate the entire portfolio at a profit,” stated Mr. Funk. “Additionally, while first mortgage real estate lending was slow in the first quarter, we are beginning to see signs in early April that this may be changing.”
First quarter 2014 noninterest expense was $10.4 million, a decrease of $0.6 million, or 5.5%, from $11.0 million for the first quarter of 2013. With the exception of a small increase in data processing expense, all other noninterest expense categories experienced a decline for the first quarter of 2014, compared with the first quarter of 2013, due primarily to expense control measures.
Income tax expense was $1.9 million for the first quarter of 2014 compared with $1.8 million for the same period in 2013. The expense variation was primarily due to changes in the levels of taxable income between the comparable periods.
Balance Sheet and Asset Quality
Total assets declined slightly to $1.75 billion at March 31, 2014 from $1.76 billion at December 31, 2013, resulting primarily from decreased loan balances and a decrease in loan pool participations, partially offset by an increase in cash and cash equivalents and net premises and equipment. Repurchase agreements and federal funds purchased both decreased, while Federal Home Loan Bank borrowings and deposits both increased slightly. Repurchase agreements decreased $8.9 million to $52.3 million at March 31, 2014, from $61.2 million at December 31, 2013, while federal funds purchased decreased from $5.5 million at December 31, 2013 to none at March 31, 2014. Total deposits at March 31, 2014, increased to $1.38 billion, an increase of $0.7 million, or 0.1%, from December 31, 2013, and FHLB borrowings increased $2.0 million, or 1.9%, to $108.9 million. The deposit increase was primarily concentrated in interest-bearing checking accounts, while certificate of deposit accounts continued to decline due to the low interest rates being paid on time deposits, and depositors choosing other investment products or highly-liquid alternatives such as savings and money market accounts.
Total bank loans (excluding loan pool participations and loans held for sale) decreased $15.5 million to $1.07 billion at March 31, 2014, compared to $1.09 billion as of December 31, 2013. This decrease was primarily in agricultural loans, other commercial real estate loans, farmland loans, and one- to four- family first liens. Decreases in these categories were partially offset by an increase in commercial and industrial loans. As of March 31, 2014, the largest category of bank loans was commercial real estate, comprising 39% of the portfolio, of which 8% was farmland, 7% was construction and development, and 5% was multifamily residential mortgages. Commercial and industrial loans was the next largest category at 25%, followed by residential real estate loans at 25%, agricultural loans at 8%, and consumer loans at 2%.
“While we often see seasonal declines in loan demand in the first quarter, we expect loan growth to resume in the second quarter,” continued Mr. Funk. “Deposit generation remains a challenge in our market area.”
Nonperforming bank loans decreased from $13.8 million, or 1.27% of total bank loans, at December 31, 2013, to $12.8 million, or 1.19% of total bank loans, at March 31, 2014. At March 31, 2014, nonperforming loans consisted of $3.5 million in nonaccrual loans, $9.0 million in troubled debt restructures (“TDRs”) and $0.4 million in loans past due 90 days or more and still accruing. This compares to nonaccrual loans of $3.2 million, TDRs of $9.2 million, and loans past due 90 days or more and still accruing of $1.4 million at December 31, 2013. The decrease in overall nonperforming loans was primarily due to annual payments collected from three TDR-status borrowers, along with the $1.0 million reduction in loans 90 days past due and still accruing interest, while nonaccrual loans increased slightly. Bank loans past due 30 to 89 days and still accruing interest (not included in the nonperforming loan totals) were $4.7 million at March 31, 2014, compared with $4.9 million at December 31, 2013. At March 31, 2014, other real estate owned (not included in nonperforming loans) was $2.0 million, up from $1.8 million at December 31, 2013. During the first quarter of 2014, the Company added two properties to other real estate owned, with no real estate property sales. As of March 31, 2014, the allowance for bank loan losses was $16.4 million, or 1.53% of total bank loans, compared with $16.2 million, or 1.49% of total bank loans, at December 31, 2013. The allowance for loan losses represented 128.18% of nonperforming bank loans at March 31, 2014, compared with 117.44% of nonperforming bank loans at December 31,
2013. The Company had net bank loan charge-offs of $0.2 million in the three months ended March 31, 2014, or an annualized 0.08% of average bank loans outstanding, compared to net recoveries of $0.1 million, or an annualized 0.04% of average bank loans outstanding, for the same period of 2013.
“We take great pride in our credit culture and we believe these numbers compare very well with our peers,” said Mr. Funk.
Loan pool participations (participation interests in performing, subperforming and nonperforming loans that have been purchased from various nonaffiliated banking organizations) were $25.5 million at March 31, 2014, down from $27.7 million at December 31, 2013. The Company entered into this business upon consummation of its merger with the Former MidWestOne in March 2008. As previously announced, the Company has decided to exit this line of business as current balances pay down, as it is not part of its core business strategy.
The Company has minimal exposure in loan pools to consumer real estate, subprime credit or construction and real estate development loans. The net “all-in” yield (after all expenses) on loan pool participations was 4.20% and 11.97% for the first three months of 2014 and 2013, respectively. The net yield was lower in the first quarter of 2014 compared to the same period of 2013 due to fewer gains realized from loan payoffs in the portfolio at a value greater than their net book value. Including loan pool participations, the loan to deposit ratio was 79.9% as of March 31, 2014, compared with 81.2% as of December 31, 2013.
Investment securities totaled $530.9 million at March 31, 2014, or 30.4% of total assets, virtually unchanged from $531.2 million, or 30.3% of total assets, as of December 31, 2013. A total of $496.9 million of the investment securities were classified as available for sale at March 31, 2014. As of March 31, 2014, the portfolio consisted mainly of U.S. government agencies (9.3%), mortgage-backed securities and collateralized mortgage obligations (39.3%), and obligations of states and political subdivisions (43.7%).
Capital Adequacy
Total shareholders’ equity was $183.1 million as of March 31, 2014, compared to $178.0 million as of December 31, 2013, an increase of $5.1 million, or 2.9%. This increase was primarily attributable to net income of $5.0 million for the first quarter of 2014, and a $1.9 million increase in accumulated other comprehensive income due to market value adjustments on investment securities available for sale. These increases were partially offset by the payment of $1.2 million in common stock dividends, and a $0.4 million increase in treasury stock due to repurchases. The total shareholders’ equity to total assets ratio was 10.49% at March 31, 2014, up from 10.14% at December 31, 2013. The tangible equity to tangible assets ratio was 10.04% at March 31, 2014, compared with 9.69% at December 31, 2013. Tangible book value per share was $20.59 at March 31, 2014, an increase from $19.95 per share at December 31, 2013.
“We believe our balance sheet and capital position remain strong,” concluded Mr. Funk. “We continue to actively look for productive ways to deploy our capital resources.”
Dividend Reinvestment Plan Announced
The Company has recently established The MidWestOne Financial Group, Inc. Dividend Reinvestment and Stock Purchase Plan (the “Plan”) for its registered shareholders. The Plan allows for the reinvestment of all or a portion of dividends paid on Company stock into additional shares of common stock, generally without any fees or commissions. Plan participants may also make additional cash purchases of shares up to $1,000 per month. The Plan is being administered by the Company’s transfer agent, IST Shareholder Services. Interested shareholders should contact IST directly at 800-757-5755.
Quarterly Cash Dividend Declared
On April 17, 2014, the Company’s board of directors declared a second quarter cash dividend of $0.145 per common share, which is the same as the dividend paid last quarter. The dividend is payable June 16, 2014 to shareholders of record at the close of business on June 1, 2014. At this quarterly rate, the indicated annual cash dividend is equal to $0.58 per common share.
Conference Call Details
MidWestOne will host a conference call for investors at 11:00 a.m., CDT, on Friday, April 25, 2014. To participate, dial 888-317-6016 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until May 19, 2014 on the Company’s web site: www.midwestone.com. A transcript of the call will also be available on the web site within three business days of the event.
About MidWestOne Financial Group, Inc.
MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. The Company’s bank subsidiary MidWestOne Bank, is also headquartered in Iowa City. MidWestOne Bank has office locations in Belle Plaine, Burlington, Cedar Falls, Conrad, Coralville, Davenport, Fairfield, Fort Madison, Iowa City, 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.”
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 authorized 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,” “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.
Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) credit quality deterioration or pronounced and sustained reduction in real estate market values could cause an increase in the allowance for credit losses and a reduction in net earnings; (2) our management’s ability to reduce and effectively manage interest rate risk and the impact of interest rates in general on the volatility of our net interest income; (3) 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; (4) fluctuations in the value of our investment securities; (5) governmental monetary and fiscal policies; (6) legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators (particularly with respect to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the extensive regulations to be promulgated thereunder, as well as rules approved by the federal bank regulatory agencies to implement the Basel III capital accord), and changes in the scope and cost of Federal Deposit Insurance Corporation insurance and other coverages; (7) the ability to attract and retain key executives and employees experienced in banking and financial services; (8) the sufficiency of the allowance for loan losses to absorb the amount of actual losses inherent in our existing loan portfolio; (9) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (10) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (11) 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, and other financial institutions operating in our markets or elsewhere or providing similar services; (12) the failure of assumptions underlying the establishment of allowances for loan losses and estimation of values of collateral and various financial assets and liabilities; (13) volatility of rate-sensitive deposits; (14) operational risks, including data processing system failures or fraud; (15) asset/liability matching risks and liquidity risks; (16) the risks of mergers, acquisitions and divestitures, 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; (17) the costs, effects and outcomes of existing or future litigation; (18) changes in general economic or industry conditions, nationally or in the communities in which we conduct business; (19) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; and (20) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.
Non-GAAP Presentations:
Certain non-GAAP ratios and amounts are provided to evaluate and measure the Company’s operating performance and financial condition, including tangible book value per share, net interest margin, the tangible equity to tangible assets ratio, return on average tangible equity, and the efficiency ratio. Management believes this data provides investors with pertinent information regarding the Company’s profitability, financial condition and capital adequacy and how management evaluates such metrics internally. The following 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 |
| | | March 31, | | December 31, | | March 31, |
| (dollars in thousands, except per share data) | 2014 | | 2013 | | 2013 |
| Tangible Equity | | | | | |
| Total shareholders’ equity | $ | 183,143 |
| | $ | 178,016 |
| | $ | 176,865 |
|
| Less: Intangible assets, net | (8,669 | ) | | (8,806 | ) | | (9,303 | ) |
| Tangible equity | $ | 174,474 |
| | $ | 169,210 |
| | $ | 167,562 |
|
| Tangible Assets | | | | | |
| Total assets | $ | 1,745,913 |
| | $ | 1,755,218 |
| | $ | 1,785,645 |
|
| Less: Intangible assets, net | (8,669 | ) | | (8,806 | ) | | (9,303 | ) |
| Tangible assets | $ | 1,737,244 |
| | $ | 1,746,412 |
| | $ | 1,776,342 |
|
| Common shares outstanding | 8,471,761 |
| | 8,481,799 |
| | 8,498,484 |
|
| Tangible Book Value Per Share | $ | 20.59 |
| | $ | 19.95 |
| | $ | 19.72 |
|
| Tangible Equity/Tangible Assets | 10.04 | % | | 9.69 | % | | 9.43 | % |
|
| | | | | | | | | | | | | |
| | | | For the Three Months Ended March 31, | | For the Year Ended December 31, | | For the Three Months Ended March 31, |
| (dollars in thousands) | | 2014 | | 2013 | | 2013 |
| Net Income | | $ | 4,973 |
| | $ | 18,607 |
| | $ | 4,790 |
|
Plus: Intangible amortization, net of tax(1) | | 89 |
| | 431 |
| | 110 |
|
| Adjusted net income | | $ | 5,062 |
| | $ | 19,038 |
| | $ | 4,900 |
|
| Average Tangible Equity | | | | | | |
| Average total shareholders’ equity | | $ | 181,274 |
| | $ | 175,666 |
| | $ | 175,213 |
|
| Less: Average intangible assets, net | | (8,723 | ) | | (9,073 | ) | | (9,369 | ) |
| Average tangible equity | | $ | 172,551 |
| | $ | 166,593 |
| | $ | 165,844 |
|
| Return on Average Tangible Equity (annualized) | | 11.90 | % | | 11.43 | % | | 11.98 | % |
|
| | | | | | | | | | | | | |
| Net Interest Margin Tax Equivalent Adjustment | | | | | | |
| Net interest income | | $ | 13,527 |
| | $ | 53,962 |
| | $ | 13,791 |
|
Plus tax equivalent adjustment:(1) | | | | | | |
| Loans | | 273 |
| | 963 |
| | 194 |
|
| Securities | | 729 |
| | 2,795 |
| | 604 |
|
Tax equivalent net interest income (1) | | $ | 14,529 |
| | $ | 57,720 |
| | $ | 14,589 |
|
| Average interest earning assets | | $ | 1,656,857 |
| | $ | 1,667,251 |
| | $ | 1,685,601 |
|
| Net Interest Margin | | 3.55 | % | | 3.46 | % | | 3.51 | % |
|
| | | | | | | | | | | | | |
| Operating Expense | | | | | | |
| Total noninterest expense | | 10,392 |
| | 42,087 |
| | 10,994 |
|
| Less: Amortization of intangibles | | (137 | ) | | (663 | ) | | (166 | ) |
| Operating expense | | $ | 10,255 |
| | $ | 41,424 |
| | $ | 10,828 |
|
| Operating Revenue | | | | | | |
Tax equivalent net interest income (1) | | $ | 14,529 |
| | $ | 57,720 |
| | $ | 14,589 |
|
| Plus: Noninterest income | | 4,217 |
| | 14,728 |
| | 3,981 |
|
| Less: Gain on sale or call of available for sale securities | | (783 | ) | | (65 | ) | | (80 | ) |
| (Gain) loss on sale of premises and equipment | | (3 | ) | | 3 |
| | 2 |
|
| Operating revenue | | $ | 17,960 |
| | $ | 72,386 |
| | $ | 18,492 |
|
| Efficiency Ratio | | 57.10 | % | | 57.23 | % | | 58.56 | % |
| (1) Computed on a tax-equivalent basis, assuming a federal income tax rate of 35% | | |
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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| | | | | | | |
| | As of March 31, 2014 | | As of December 31, 2013 |
| (dollars in thousands, except per share amounts) | (unaudited) | | |
| ASSETS | | | |
| Cash and due from banks | $ | 25,571 |
| | $ | 24,516 |
|
| Interest-bearing deposits in banks | 9,504 |
| | 374 |
|
| Federal funds sold | 181 |
| | — |
|
| Cash and cash equivalents | 35,256 |
| | 24,890 |
|
| Investment securities: | | | |
| Available for sale | 496,918 |
| | 498,561 |
|
| Held to maturity (fair value of $32,304 as of March 31, 2014 and $30,191 as of December 31, 2013) | 33,963 |
| | 32,625 |
|
| Loans held for sale | 89 |
| | 357 |
|
| Loans | 1,072,951 |
| | 1,088,412 |
|
| Allowance for loan losses | (16,425 | ) | | (16,179 | ) |
| Net loans | 1,056,526 |
| | 1,072,233 |
|
| Loan pool participations, net | 23,400 |
| | 25,533 |
|
| Premises and equipment, net | 29,885 |
| | 27,682 |
|
| Accrued interest receivable | 9,289 |
| | 10,409 |
|
| Intangible assets, net | 8,669 |
| | 8,806 |
|
| Bank-owned life insurance | 29,827 |
| | 29,598 |
|
| Other real estate owned | 1,996 |
| | 1,770 |
|
| Deferred income taxes | 4,165 |
| | 8,194 |
|
| Other assets | 15,930 |
| | 14,560 |
|
| Total assets | $ | 1,745,913 |
| | $ | 1,755,218 |
|
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Deposits: | | | |
| Non-interest-bearing demand | $ | 206,037 |
| | $ | 222,359 |
|
| Interest-bearing checking | 620,027 |
| | 592,673 |
|
| Savings | 101,816 |
| | 94,559 |
|
| Certificates of deposit under $100,000 | 243,727 |
| | 256,283 |
|
| Certificates of deposit $100,000 and over | 204,069 |
| | 209,068 |
|
| Total deposits | 1,375,676 |
| | 1,374,942 |
|
| Federal funds purchased | — |
| | 5,482 |
|
| Securities sold under agreements to repurchase | 52,293 |
| | 61,183 |
|
| Federal Home Loan Bank borrowings | 108,900 |
| | 106,900 |
|
| Deferred compensation liability | 3,447 |
| | 3,469 |
|
| Long-term debt | 15,464 |
| | 15,464 |
|
| Accrued interest payable | 700 |
| | 765 |
|
| Other liabilities | 6,290 |
| | 8,997 |
|
| Total liabilities | 1,562,770 |
| | 1,577,202 |
|
| Shareholders' equity: | | | |
| Preferred stock, no par value; authorized 500,000 shares; no shares issued and outstanding at March 31, 2014 and December 31, 2013 | $ | — |
| | $ | — |
|
| Common stock, $1.00 par value; authorized 15,000,000 shares at March 31, 2014 and December 31, 2013; issued 8,690,398 shares at March 31, 2014 and December 31, 2013; outstanding 8,471,761 shares at March 31, 2014 and 8,481,799 shares at December 31, 2013 | 8,690 |
| | 8,690 |
|
| Additional paid-in capital | 80,338 |
| | 80,506 |
|
| Treasury stock at cost, 218,637 shares as of March 31, 2014 and 208,599 shares at December 31, 2013 | (4,080 | ) | | (3,702 | ) |
| Retained earnings | 95,218 |
| | 91,473 |
|
| Accumulated other comprehensive income | 2,977 |
| | 1,049 |
|
| Total shareholders' equity | 183,143 |
| | 178,016 |
|
| Total liabilities and shareholders' equity | $ | 1,745,913 |
| | $ | 1,755,218 |
|
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
| | | | | | | | |
(unaudited)
(dollars in thousands) | | Three Months Ended March 31, |
| | | 2014 | | 2013 |
| Interest income: | | | | |
| Interest and fees on loans | | $ | 11,940 |
| | $ | 12,114 |
|
| Interest and discount on loan pool participations | | 280 |
| | 1,080 |
|
| Interest on bank deposits | | 4 |
| | 5 |
|
| Interest on investment securities: | | | | |
| Taxable securities | | 2,316 |
| | 2,630 |
|
| Tax-exempt securities | | 1,381 |
| | 1,361 |
|
| Total interest income | | 15,921 |
| | 17,190 |
|
| Interest expense: | | | | |
| Interest on deposits: | | | | |
| Interest-bearing checking | | 545 |
| | 671 |
|
| Savings | | 36 |
| | 36 |
|
| Certificates of deposit under $100,000 | | 697 |
| | 1,239 |
|
| Certificates of deposit $100,000 and over | | 445 |
| | 633 |
|
| Total interest expense on deposits | | 1,723 |
| | 2,579 |
|
| Interest on federal funds purchased | | 1 |
| | 9 |
|
| Interest on securities sold under agreements to repurchase | | 30 |
| | 36 |
|
| Interest on Federal Home Loan Bank borrowings | | 562 |
| | 692 |
|
| Interest on other borrowings | | 6 |
| | 8 |
|
| Interest on long-term debt | | 72 |
| | 75 |
|
| Total interest expense | | 2,394 |
| | 3,399 |
|
| Net interest income | | 13,527 |
| | 13,791 |
|
| Provision for loan losses | | 450 |
| | 200 |
|
| Net interest income after provision for loan losses | | 13,077 |
| | 13,591 |
|
| Noninterest income: | | | | |
| Trust, investment, and insurance fees | | 1,518 |
| | 1,349 |
|
| Service charges and fees on deposit accounts | | 628 |
| | 707 |
|
| Mortgage origination and loan servicing fees | | 437 |
| | 1,044 |
|
| Other service charges, commissions and fees | | 619 |
| | 572 |
|
| Bank-owned life insurance income | | 229 |
| | 231 |
|
| Gain on sale or call of available for sale securities (Includes $783 and $80 reclassified from accumulated other comprehensive income for net gains on available for sale securities for the three months ended March 31, 2014 and 2013, respectively) | | 783 |
| | 80 |
|
| Gain (loss) on sale of premises and equipment | | 3 |
| | (2 | ) |
| Total noninterest income | | 4,217 |
| | 3,981 |
|
| Noninterest expense: | | | | |
| Salaries and employee benefits | | 6,134 |
| | 6,293 |
|
| Net occupancy and equipment expense | | 1,605 |
| | 1,688 |
|
| Professional fees | | 575 |
| | 683 |
|
| Data processing expense | | 424 |
| | 391 |
|
| FDIC insurance expense | | 243 |
| | 294 |
|
| Amortization of intangible assets | | 137 |
| | 166 |
|
| Other operating expense | | 1,274 |
| | 1,479 |
|
| Total noninterest expense | | 10,392 |
| | 10,994 |
|
| Income before income tax expense | | 6,902 |
| | 6,578 |
|
| Income tax expense (Includes $305 and $31 income tax expense reclassified from accumulated other comprehensive income for the three months ended March 31, 2014 and 2013, respectively) | | 1,929 |
| | 1,788 |
|
| Net income | | $ | 4,973 |
| | $ | 4,790 |
|
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
|
| | | | | | | | | | | |
| | As of and for the Three Months Ended March 31, 2014 | | As of and for the Year Ended December 31, 2013 | | As of and for the Three Months Ended March 31, 2013 |
| (unaudited, dollars in thousands, except per share amounts) | | | | | |
| Per Share Data: | | | | | |
| Book value per share | $ | 21.62 |
| | $ | 20.99 |
| | $ | 20.81 |
|
| Tangible book value per share | 20.59 |
| | 19.95 |
| | 19.72 |
|
| Financial Ratios: | | | | | |
| Tangible equity/tangible assets | 10.04 | % | | 9.69 | % | | 9.43 | % |
| Total shareholders’ equity/total assets | 10.49 | % | | 10.14 | % | | 9.90 | % |
| Total bank loans/total deposits | 77.99 | % | | 79.16 | % | | 75.84 | % |
| Total loans + loan pool participations/total deposits | 79.85 | % | | 81.17 | % | | 78.35 | % |
| Asset Quality: | | | | | |
| Gross bank loans | $ | 1,072,951 |
| | $ | 1,088,412 |
| | $ | 1,041,783 |
|
| Allowance for bank loan losses | 16,425 |
| | 16,179 |
| | 16,260 |
|
| Net charge-offs (recoveries) | 204 |
| | 1,128 |
| | (103 | ) |
| Bank loans past due 30 - 89 days | 4,744 |
| | 4,901 |
| | 6,465 |
|
| Other real estate owned | 1,996 |
| | 1,770 |
| | 3,025 |
|
| Non-performing bank loans | | | | | |
| Non-accrual loans | $ | 3,491 |
| | $ | 3,240 |
| | $ | 2,385 |
|
| Restructured loans | 8,952 |
| | 9,151 |
| | 7,708 |
|
| Loans 90+ days past due and still accruing interest | 371 |
| | 1,385 |
| | 667 |
|
| Total non-performing bank loans | 12,814 |
| | 13,776 |
| | 10,760 |
|
| | | | | | |
| Gross loan pool participations | $ | 25,534 |
| | $ | 27,667 |
| | $ | 34,513 |
|
| Allowance for loan pool participation losses | 2,134 |
| | 2,134 |
| | 2,134 |
|
| Net bank loan charge-offs (recoveries)/average bank loans - annualized | 0.08 | % | | 0.10 | % | | (0.04 | )% |
| Nonperforming bank loans/total bank loans | 1.19 | % | | 1.27 | % | | 1.03 | % |
| Nonperforming bank loans + other real estate/total assets | 0.85 | % | | 0.89 | % | | 0.77 | % |
| Allowance for bank loan losses/total bank loans | 1.53 | % | | 1.49 | % | | 1.56 | % |
| Allowance for loan pool participation losses/total loan pool participations | 8.36 | % | | 7.71 | % | | 6.18 | % |
| Allowance for bank loan losses/nonperforming bank loans | 128.18 | % | | 117.44 | % | | 151.12 | % |
|
| | | | | | | | | | | |
| | As of and for the Three Months Ended March 31, | | As of and for the Year Ended December 31, |
| (unaudited, dollars in thousands, except per share amounts) | 2014 | | 2013 | | 2013 |
| Per Share Data: | | | | | |
| Ending number of shares outstanding | 8,471,761 |
| | 8,498,484 |
| | 8,481,799 |
|
| Average number of shares outstanding | 8,475,593 |
| | 8,493,376 |
| | 8,477,904 |
|
| Diluted average number of shares | 8,507,973 |
| | 8,536,495 |
| | 8,525,119 |
|
| Earnings per common share - basic | $ | 0.59 |
| | $ | 0.56 |
| | $ | 2.19 |
|
| Earnings per common share - diluted | 0.58 |
| | 0.56 |
| | 2.18 |
|
| Dividends paid per common share | 0.145 |
| | 0.125 |
| | 0.50 |
|
| Performance Ratios: | | | | | |
| Return on average assets - annualized | 1.15 | % | | 1.09 | % | | 1.06 | % |
| Return on average shareholders’ equity - annualized | 11.13 | % | | 11.09 | % | | 10.59 | % |
| Return on average tangible equity - annualized | 11.90 | % | | 11.98 | % | | 11.43 | % |
| Net interest margin | 3.55 | % | | 3.51 | % | | 3.46 | % |
| Efficiency ratio* | 57.10 | % | | 58.56 | % | | 57.23 | % |
| Average Balances: | | | | | |
| Total bank loans | $ | 1,082,467 |
| | $ | 1,034,560 |
| | $ | 1,059,356 |
|
| Total loan pool participations | 27,061 |
| | 36,590 |
| | 32,648 |
|
| Interest-earning assets | 1,656,857 |
| | 1,685,601 |
| | 1,667,251 |
|
| Total assets | 1,747,027 |
| | 1,774,931 |
| | 1,756,344 |
|
| Interest-bearing deposits | 1,154,608 |
| | 1,201,842 |
| | 1,155,294 |
|
| Interest-bearing liabilities | 1,339,292 |
| | 1,403,064 |
| | 1,363,467 |
|
| Total equity | 181,274 |
| | 175,213 |
| | 175,666 |
|
| | | | | | |
| * Noninterest expense minus amortization of intangibles, divided by the sum of tax-equivalent net interest income plus noninterest income minus gain/loss or impairment on securities and premises and equipment. |
