Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - MidWestOne Financial Group, Inc. | a3-31x12earningsrelease.htm |
Exhibit 99.1
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 2012 FINANCIAL RESULTS
Iowa City, Iowa, April 24, 2012 - MidWestOne Financial Group, Inc. (NASDAQ - MOFG), today reported results for its first quarter ended March 31, 2012.
Net income for the first quarter of 2012 rose to $4.4 million, compared with $2.9 million for the same period last year. Net income available to common shareholders rose to $4.4 million, or $0.52 per diluted share, compared with net income available to common shareholders, after dividends and discount accretion on the Company's preferred stock, of $2.7 million, or $0.31 per diluted share, in the first quarter of 2011.
Net income for the first quarter of 2012 was higher than in the same period in 2011 primarily due to:
•a 14.3% increase in net interest income;
•a 35.7% decrease in the provision for loan losses; and
• | an 8.8% increase in noninterest income, mainly due to gains on the sale of investments available for sale and fixed assets. |
The Company's return on average assets ratio for the first quarter of 2012 was 1.05%, compared to 0.74% for the same period last year and 0.82% for the year ended December 31, 2011. In addition, return on average tangible common equity increased to 12.41% for the current quarter, compared to 8.71% for the same quarter last year and 9.51% for the year ended December 31, 2011.
"Needless to say, we are thrilled with our first quarter results," stated President and Chief Executive Officer Charles N. Funk. "This is the best quarter of financial performance since our merger in 2008. While we did benefit from several non-recurring income items in the quarter, including gains on the sale of investment securities and of premises and equipment, our operating performance continues to improve. We believe that our first quarter return on assets of 1.05% and return on tangible common equity of 12.41% are evidence of this improvement."
Results of Operations
Net interest income for the first quarter of 2012 improved $1.7 million, or 14.3%, from $11.6 million for the first quarter of 2011. Income from investment securities increased $0.2 million, or 6.7%, to $4.0 million for the first quarter of 2012. Loan interest income increased $0.3 million, or 2.2%, to $13.1 million for the first quarter of 2012, compared to $12.8 million for the same period of 2011. Income from loan pool participations increased to $0.5 million for the first quarter of 2012, compared to $0.4 million for the same period a year ago, on a much lower level of investment in 2012. Interest expense decreased $1.0 million, or 19.4%, to $4.3 million for the first three months of 2012, compared to $5.3 million for the same period of 2011, primarily due to lower expense on deposit account interest resulting from lower interest rates.
The net interest margin for the first quarter of 2012, calculated on a fully tax-equivalent basis, was 3.52% or 21 basis points higher than the 3.31% net interest margin for the first quarter of 2011. The increase was due primarily to lower rates on an increased volume of interest-bearing liabilities, combined with an increased volume of interest earning assets, despite lower yields.
1
The provision for loan losses for the first quarter of 2012 was $0.6 million, a decrease of $0.3 million, or 35.7%, from $0.9 million in the first quarter of 2011. The 2012 amount does not include a noninterest expense charge of $0.2 million to establish an allowance for losses for off-balance-sheet credit exposures. The decreased provision reflects management's belief that the general economy continues to stabilize, as well as improvement in our loan portfolio credit quality indicators.
Noninterest income for the first quarter of 2012 increased to $4.2 million, up $0.3 million, or 8.8%, from $3.9 million in the first quarter of 2011, primarily due to increased net gains on the sale of available for sale securities and net gains on the sale of fixed assets. Net gains on the sale of available for sale securities for the first quarter of 2012 were $0.3 million. There were no net gains or losses on securities in the first quarter of 2011. Net gains on the sale of fixed assets were $0.2 million for the first three months of 2012, compared to a small net loss for the same period last year. The current period gain was primarily due to the sale of vacant property originally acquired for a potential bank branch location. These increases were partially offset by decreased mortgage origination and loan servicing fees of $0.1 million, or 12.5%, to $0.8 million for the first quarter of 2012, compared to $0.9 million for the same quarter of 2011. This decline was attributable to a lower mortgage servicing rights value adjustment during the first quarter of 2012 compared to the same period of 2011.
First quarter 2012 noninterest expense was $10.8 million, an increase of $0.2 million, or 1.6%, from $10.6 million for the first quarter of 2011. The primary reasons for the increase in noninterest expense were an increase in other operating expenses to $1.5 million for the first quarter of 2012 from $1.2 million in the first quarter of 2011, and an increase in salaries and employee benefits to $6.0 million for the first quarter of 2012 from $5.9 million for the same period of 2011. The primary area of increase in other operating expense was the establishment of an allowance for losses on off-balance-sheet credit exposures, mainly commercial letters of credit, in the amount of $0.2 million. The increase in salaries and employee benefits was primarily due to annual salary increases for employees that were effective at the beginning of 2012. FDIC insurance expense showed the largest expense decline, going from $0.6 million for the first quarter of 2011 to $0.3 million for the same period of 2012, due to lower assessment rates.
Income tax expense was $1.6 million for the first quarter of 2012 compared with $1.0 million for the same period in 2011. The higher expense was primarily due to increased taxable income.
Balance Sheet and Asset Quality
Total assets rose to $1.73 billion at March 31, 2012 from $1.70 billion at December 31, 2011, resulting primarily from increased investment in securities, interest-bearing deposits in banks, and federal funds sold, partially offset by a decrease in loans and loan pool participations. The asset growth was funded by an increase in deposit balances and repurchase agreements, partially offset by a decrease in federal funds purchased and Federal Home Loan Bank (FHLB) borrowings. Total deposits at March 31, 2012 rose to $1.34 billion, an increase of $38.0 million, or 2.9%, from December 31, 2011, and repurchase agreements increased $2.0 million to $50.3 million at March 31, 2012, from $48.3 million at December 31, 2011. Deposit growth was primarily concentrated in public funds due to seasonal increases, and individual, partnership and non-profit accounts.
Total bank loans (excluding loan pool participations and loans held for sale) decreased $5.1 million to $981.1 million at March 31, 2012, compared with $986.2 million as of December 31, 2011. This decline was primarily due to a decrease in agriculture, farmland, and one- to four- family junior liens. These decreases were partially offset by increases in one- to four- family first liens, construction and development, and commercial and industrial loans. At the end of the first quarter of 2012, the largest category of bank loans was commercial real estate, comprising 40% of the portfolio, of which 8% was construction and development, 7% was farmland, and 3% was multifamily residential mortgages. Commercial and industrial loans was the next largest category at 25%, followed by residential real estate loans at 24%, agricultural loans at 9%, and consumer loans at 2%.
Nonperforming loans decreased from $18.1 million, or 1.84% of total bank loans at December 31, 2011, to $14.5 million, or 1.48% of total bank loans at March 31, 2012. At March 31, 2012, nonperforming loans consisted of $6.3 million in nonaccrual loans, $7.6 million in troubled debt restructures and $0.5 million in loans past due 90 days or more and still accruing. This compares to nonaccrual loans of $10.9 million, troubled debt restructures of $6.1 million, and loans past due 90 days or more and still accruing of $1.1 million, at December 31, 2011. The decrease in nonperforming loans is primarily due to the payoff of a $1.4 million agricultural credit that had been on nonaccrual, and the movement of a $1.0 million commercial real estate credit out of troubled debt restructure. Within nonperforming loans, a $2.5 million nonaccrual farmland credit was reclassified as a troubled debt restructure due to a court ordered interest rate reduction in connection with a Chapter 12 bankruptcy. Loans past due 30 to 89 days and still accruing interest (not included in the nonperforming loan totals) were $7.9 million at March 31, 2012, compared with $7.0 million at December 31, 2011. At March 31, 2012, other real estate owned (not included in nonperforming loans) was $3.8 million, down from $4.0 million at December 31, 2011.
2
"We believe that our bankers have shown their prowess in terms of making and collecting good loans," Mr. Funk noted. "Our bank loan portfolio increased 4.5% from a year ago and our past dues and non-performing assets are at levels that compare very favorably with our peers. At quarter-end, we had only thirteen 1-4 family residential properties in foreclosure. This is a low number and we are proud of the performance of our residential portfolio and our bankers as we continue to work with all of our borrowers to find the right solution to each situation."
As of March 31, 2012, the allowance for bank loan losses was $15.7 million, or 1.60% of total bank loans, compared with $15.7 million, or 1.59% of total bank loans at December 31, 2011. The allowance for loan losses represented 108.09% of nonperforming loans at March 31, 2012, compared with 86.58% of nonperforming loans at December 31, 2011. The bank had net loan charge-offs of $0.6 million in the first three months of 2012, or an annualized 0.24% of average bank loans outstanding, compared to $0.7 million and 0.29% for the same period of 2011.
Loan pool participations (participation interests in performing, sub-performing and nonperforming loans that have been purchased from various nonaffiliated banking organizations) were $48.0 million at March 31, 2012, down from $52.2 million at December 31, 2011, and $64.3 million at the end of the first quarter last year. 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.
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 3.61% for the first quarter of 2012, up from 2.16% for the first quarter of 2011. The net yield was higher in the first quarter of 2012 due to the sale of several foreclosed real estate properties in the portfolio at a value greater than their net book value. Including loan pool participations, the loan to deposit ratio was 76.5% as of March 31, 2012, compared with 79.5% as of December 31, 2011.
Investment securities totaled $558.8 million at March 31, 2012, or 32.4% of total assets, up from $536.1 million, or 31.6% of total assets, as of December 31, 2011. A total of $551.8 million of the investment securities were classified as available for sale. The portfolio consisted mainly of U.S. government agencies (12.5%), mortgage-backed securities (43.7%), and obligations of states and political subdivisions (41.3%).
Capital Adequacy
Total shareholders' equity was $159.3 million as of March 31, 2012. Total shareholders' equity to total assets ratio was 9.23% at March 31, 2012, equal to that at December 31, 2011. The tangible common equity to tangible assets ratio was 8.70% at March 31, 2012, compared with 8.68% at December 31, 2011. Tangible common equity per share was $17.63 at March 31, 2012, up from $17.15 per share at December 31, 2011. This increase was primarily attributable to net income of $4.4 million for the first three months of 2012.
During the first quarter of 2012 the Company repurchased 86,083 shares of its common stock at an average price of $16.78 per share.
Mr. Funk concluded, "Our capital ratios remain very strong. This financial strength has allowed us to increase our dividend 70% in the past year, as well as use $2.9 million to repurchase 188,273 shares of stock at an average price of $15.63 over that time period. All told, we have returned $5.1 million to our shareholders in the past year."
Anticipated Impact of Future Events
As initially disclosed in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2011, during recent efforts to fully terminate the Bank's noncontributory defined benefit pension plan and with recent volatility in the financial markets, a widened funding gap between the plan's accumulated benefit obligation and the fair value of plan assets has been noted. While initially estimated not to exceed $5.0 million, current estimates have placed the pre-tax termination expense as high as $6.0 million. The Company expects to complete the termination process in the second quarter of 2012, at which time the actual expense will be recorded, in accordance with generally accepted accounting principles.
The Company entered into an agreement in January 2011 to sell the location of our Home Mortgage Center to the University of Iowa, and a gain on sale in the estimated amount of $4.0 million is expected. There is one contingency to be met before the sale is finalized. The Company anticipates the transaction to be finalized in the second quarter of 2012, at which time the actual gain will be recorded, in accordance with generally accepted accounting principles.
3
Quarterly Cash Dividend Declared
On April 19, 2012, the Company's board of directors declared a second quarter cash dividend of $0.085 per common share, which is the same as that paid in the first quarter, and a $0.025 increase from the dividend paid in each of the last two quarters of 2011. The dividend is payable June 15, 2012, to shareholders of record at the close of business on June 1, 2012. At this quarterly rate, the indicated annual cash dividend is equal to $0.34 per common share.
Conference Call Details
MidWestOne will host a conference call for investors at 3:00 p.m., ET, today. To participate, dial 877-317-6789 at least fifteen minutes before the call's start time. If you are unable to participate on the call, a replay will be available until May 25, 2012 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), 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 SEC filings made by the Company.
4
Non-GAAP Presentations:
Certain non-GAAP ratios are provided to evaluate and measure the Company's operating performance and financial condition, including net interest margin, Tier 1 capital to average assets, and tangible common equity to tangible assets ratios. Management believes these ratios provide investors with information regarding the Company's balance sheet, 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.
As of | As of | As of | |||||||||||
March 31, | December 31, | March 31, | |||||||||||
(dollars in thousands) | 2012 | 2011 | 2011 | ||||||||||
Tangible Common Equity | |||||||||||||
Total shareholders' equity | $ | 159,270 | $ | 156,494 | $ | 161,315 | |||||||
Less: Preferred equity | — | — | (15,784 | ) | |||||||||
Intangible assets, net | (10,053 | ) | (10,247 | ) | (11,019 | ) | |||||||
Tangible common equity | $ | 149,217 | $ | 146,247 | $ | 134,512 | |||||||
Tangible Assets | |||||||||||||
Total assets | $ | 1,725,844 | $ | 1,695,244 | $ | 1,618,231 | |||||||
Less: Intangible assets, net | (10,053 | ) | (10,247 | ) | (11,019 | ) | |||||||
Tangible assets | $ | 1,715,791 | $ | 1,684,997 | $ | 1,607,212 | |||||||
Tangible common equity/tangible assets | 8.70 | % | 8.68 | % | 8.37 | % | |||||||
Tier 1 Capital | |||||||||||||
Total shareholders' equity | $ | 159,270 | $ | 156,494 | $ | 161,315 | |||||||
Plus: Long term debt (qualifying restricted core capital) | 15,464 | 15,464 | 15,464 | ||||||||||
Net unrealized (gains) losses on securities available for sale | (3,831 | ) | (3,328 | ) | 1,330 | ||||||||
Less: Disallowed intangibles | (10,185 | ) | (10,374 | ) | (11,138 | ) | |||||||
Tier 1 Capital | $ | 160,718 | $ | 158,256 | $ | 166,971 | |||||||
Average Assets | |||||||||||||
Quarterly average assets | $ | 1,680,189 | $ | 1,658,738 | $ | 1,589,542 | |||||||
Less: Disallowed intangibles | (10,185 | ) | (10,374 | ) | (11,138 | ) | |||||||
Average Assets | $ | 1,670,004 | $ | 1,648,364 | $ | 1,578,404 | |||||||
Tier 1 capital/average assets | 9.62 | % | 9.60 | % | 10.58 | % | |||||||
Three Months Ended March 31, | Year Ended December 31, | Three Months Ended March 31, | |||||||||||
(dollars in thousands) | 2012 | 2011 | 2011 | ||||||||||
Net income available to common shareholders | $ | 4,432 | $ | 12,672 | $ | 2,688 | |||||||
Plus: Intangible amortization, net of tax(1) | 128 | 591 | 148 | ||||||||||
Adjusted net income available to common shareholders | $ | 4,560 | $ | 13,263 | $ | 2,836 | |||||||
Average tangible common equity | |||||||||||||
Average total shareholders' equity | $ | 157,933 | $ | 158,146 | $ | 158,891 | |||||||
Less: Average preferred stock | — | (8,032 | ) | (15,775 | ) | ||||||||
Average intangible assets, net | (10,129 | ) | (10,613 | ) | (11,208 | ) | |||||||
Average tangible common equity | $ | 147,804 | $ | 139,501 | $ | 131,908 | |||||||
Return on average tangible common equity | 12.41 | % | 9.51 | % | 8.71 | % | |||||||
Net Interest Margin Tax Equivalent Adjustment | |||||||||||||
Net interest income | $ | 13,248 | $ | 48,798 | $ | 11,592 | |||||||
Plus tax equivalent adjustment: | |||||||||||||
Loans | 195 | 473 | 83 | ||||||||||
Securities | 556 | 1,990 | 533 | ||||||||||
Tax equivalent net interest income (1) | $ | 13,999 | $ | 51,261 | $ | 12,208 | |||||||
Average interest earning assets | $ | 1,598,344 | $ | 1,536,596 | $ | 1,495,402 | |||||||
Net interest margin | 3.52 | % | 3.34 | % | 3.31 | % | |||||||
(1) Computed assuming a federal income tax rate of 34% | |||||||||||||
5
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2012 | December 31, 2011 | ||||||
(dollars in thousands) | (unaudited) | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 27,329 | $ | 28,155 | |||
Interest-bearing deposits in banks | 21,631 | 4,468 | |||||
Federal funds sold | 3,073 | — | |||||
Cash and cash equivalents | 52,033 | 32,623 | |||||
Investment securities: | |||||||
Available for sale | 551,823 | 534,080 | |||||
Held to maturity (fair value of $7,053 as of March 31, 2012 and $2,042 as of December 31, 2011) | 7,017 | 2,036 | |||||
Loans held for sale | 943 | 1,955 | |||||
Loans | 981,146 | 986,173 | |||||
Allowance for loan losses | (15,679 | ) | (15,676 | ) | |||
Net loans | 965,467 | 970,497 | |||||
Loan pool participations, net | 45,908 | 50,052 | |||||
Premises and equipment, net | 25,595 | 26,260 | |||||
Accrued interest receivable | 9,639 | 10,422 | |||||
Intangible assets, net | 10,053 | 10,247 | |||||
Bank-owned life insurance | 27,953 | 27,723 | |||||
Other real estate owned | 3,773 | 4,033 | |||||
Assets held for sale | 764 | — | |||||
Deferred income taxes | 3,430 | 3,654 | |||||
Other assets | 21,446 | 21,662 | |||||
Total assets | $ | 1,725,844 | $ | 1,695,244 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Deposits: | |||||||
Non-interest-bearing demand | $ | 164,936 | $ | 161,287 | |||
Interest-bearing checking | 536,495 | 499,905 | |||||
Savings | 79,412 | 71,823 | |||||
Certificates of deposit under $100,000 | 337,589 | 346,858 | |||||
Certificates of deposit $100,000 and over | 226,221 | 226,769 | |||||
Total deposits | 1,344,653 | 1,306,642 | |||||
Federal funds purchased | — | 8,920 | |||||
Securities sold under agreements to repurchase | 50,314 | 48,287 | |||||
Federal Home Loan Bank borrowings | 136,041 | 140,014 | |||||
Deferred compensation liability | 3,613 | 3,643 | |||||
Long-term debt | 15,464 | 15,464 | |||||
Accrued interest payable | 1,641 | 1,530 | |||||
Other liabilities | 14,848 | 14,250 | |||||
Total liabilities | 1,566,574 | 1,538,750 | |||||
Shareholders' equity: | |||||||
Preferred stock, no par value, with a liquidation preference of $1,000.00 per share; authorized 500,000 shares; no shares issued and outstanding at March 31, 2012 and December 31, 2011 | $ | — | $ | — | |||
Common stock, $1.00 par value; authorized 15,000,000 shares at March 31, 2012 and December 31, 2011; issued 8,690,398 shares at March 31, 2012 and December 31, 2011; outstanding 8,464,820 shares at March 31, 2012 and 8,529,530 shares at December 31, 2011 | 8,690 | 8,690 | |||||
Additional paid-in capital | 80,187 | 80,333 | |||||
Treasury stock at cost, 225,578 shares as of March 31, 2012 and 160,868 shares at December 31, 2011 | (3,446 | ) | (2,312 | ) | |||
Retained earnings | 70,008 | 66,299 | |||||
Accumulated other comprehensive income | 3,831 | 3,484 | |||||
Total shareholders' equity | 159,270 | 156,494 | |||||
Total liabilities and shareholders' equity | $ | 1,725,844 | $ | 1,695,244 | |||
6
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (dollars in thousands, except per share amounts) | Three Months Ended March 31, | |||||||
2012 | 2011 | |||||||
Interest income: | ||||||||
Interest and fees on loans | $ | 13,080 | $ | 12,800 | ||||
Interest and discount on loan pool participations | 454 | 354 | ||||||
Interest on bank deposits | 10 | 8 | ||||||
Interest on investment securities: | ||||||||
Taxable securities | 2,752 | 2,688 | ||||||
Tax-exempt securities | 1,219 | 1,035 | ||||||
Total interest income | 17,515 | 16,885 | ||||||
Interest expense: | ||||||||
Interest on deposits: | ||||||||
Interest-bearing checking | 829 | 1,008 | ||||||
Savings | 37 | 59 | ||||||
Certificates of deposit under $100,000 | 1,590 | 2,187 | ||||||
Certificates of deposit $100,000 and over | 773 | 848 | ||||||
Total interest expense on deposits | 3,229 | 4,102 | ||||||
Interest on federal funds purchased | 3 | — | ||||||
Interest on securities sold under agreements to repurchase | 55 | 74 | ||||||
Interest on Federal Home Loan Bank borrowings | 803 | 945 | ||||||
Interest on notes payable | 9 | 10 | ||||||
Interest on long-term debt | 168 | 162 | ||||||
Total interest expense | 4,267 | 5,293 | ||||||
Net interest income | 13,248 | 11,592 | ||||||
Provision for loan losses | 579 | 900 | ||||||
Net interest income after provision for loan losses | 12,669 | 10,692 | ||||||
Noninterest income: | ||||||||
Trust, investment, and insurance fees | 1,253 | 1,273 | ||||||
Service charges and fees on deposit accounts | 767 | 851 | ||||||
Mortgage origination and loan servicing fees | 767 | 877 | ||||||
Other service charges, commissions and fees | 710 | 679 | ||||||
Bank-owned life insurance income | 230 | 229 | ||||||
Gain on sale and call of available for sale securities | 316 | — | ||||||
Gain (loss) on sale of premises and equipment | 158 | (48 | ) | |||||
Total noninterest income | 4,201 | 3,861 | ||||||
Noninterest expense: | ||||||||
Salaries and employee benefits | 5,972 | 5,870 | ||||||
Net occupancy and equipment expense | 1,644 | 1,617 | ||||||
Professional fees | 732 | 677 | ||||||
Data processing expense | 446 | 450 | ||||||
FDIC insurance expense | 310 | 597 | ||||||
Amortization of intangible assets | 194 | 224 | ||||||
Other operating expense | 1,505 | 1,199 | ||||||
Total noninterest expense | 10,803 | 10,634 | ||||||
Income before income tax expense | 6,067 | 3,919 | ||||||
Income tax expense | 1,635 | 1,014 | ||||||
Net income | $ | 4,432 | $ | 2,905 | ||||
Less: Preferred stock dividends and discount accretion | $ | — | $ | 217 | ||||
Net income available to common shareholders | $ | 4,432 | $ | 2,688 | ||||
7
MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
March 31, 2012 | December 31, 2011 | March 31, 2011 | |||||||||
(unaudited, dollars in thousands, except per share amounts) | |||||||||||
Per share data: | |||||||||||
Book value per share | $ | 18.82 | $ | 18.35 | $ | 18.70 | |||||
Tangible common equity per share | 17.63 | 17.15 | 15.61 | ||||||||
Financial Ratios: | |||||||||||
Tangible common equity/tangible assets | 8.70 | % | 8.68 | % | 8.37 | % | |||||
Total shareholders' equity/total assets | 9.23 | % | 9.23 | % | 9.97 | % | |||||
Tier 1 capital/average assets | 9.62 | % | 9.60 | % | 10.58 | % | |||||
Total bank loans/total deposits | 72.97 | % | 75.47 | % | 74.30 | % | |||||
Total loans + loan pools/total deposits | 76.54 | % | 79.47 | % | 79.39 | % | |||||
Asset Quality | |||||||||||
Gross bank loans | $ | 981,146 | $ | 986,173 | $ | 938,523 | |||||
Allowance for bank loan losses | 15,679 | 15,676 | 15,398 | ||||||||
Net charge-offs (YTD) | 576 | 2,841 | 669 | ||||||||
Bank loans past due 30 - 89 days | 7,940 | 7,001 | 7,038 | ||||||||
Other real estate owned | 3,773 | 4,033 | 3,874 | ||||||||
Non-performing bank loans | |||||||||||
Non-accrual loans | $ | 6,331 | $ | 10,917 | $ | 14,531 | |||||
Restructured loans | 7,634 | 6,135 | 6,661 | ||||||||
Loans 90+ days past due | 540 | 1,054 | 2,244 | ||||||||
Total non-performing bank loans | 14,505 | 18,106 | 23,436 | ||||||||
Gross loan pools | $ | 48,042 | $ | 52,186 | $ | 64,341 | |||||
Allowance for loan pool losses | 2,134 | 2,134 | 2,134 | ||||||||
Net bank loan charge-offs/average bank loans (YTD - annualized) | 0.24 | % | 0.30 | % | 0.29 | % | |||||
Nonperforming bank loans/total bank loans | 1.48 | % | 1.84 | % | 2.50 | % | |||||
Nonperforming bank loans + other real estate/total assets | 1.06 | % | 1.31 | % | 1.69 | % | |||||
Allowance for bank loan losses/total bank loans | 1.60 | % | 1.59 | % | 1.64 | % | |||||
Allowance for loan pool losses/total loan pools | 4.44 | % | 4.09 | % | 3.32 | % | |||||
Allowance for bank loan losses/nonperforming bank loans | 108.09 | % | 86.58 | % | 65.70 | % | |||||
Three Months Ended March 31, | Year Ended December 31, | ||||||||||
2012 | 2011 | 2011 | |||||||||
Per share data: | |||||||||||
Ending number of shares outstanding | 8,464,820 | 8,624,392 | 8,529,530 | ||||||||
Average number of shares outstanding | 8,497,919 | 8,621,720 | 8,604,872 | ||||||||
Diluted average number of shares | 8,528,828 | 8,682,381 | 8,632,856 | ||||||||
Earnings per common share - basic | $ | 0.52 | $ | 0.31 | $ | 1.47 | |||||
Earnings per common share - diluted | 0.52 | 0.31 | 1.47 | ||||||||
Dividends paid per common share | 0.085 | 0.05 | 0.22 | ||||||||
Performance Ratios: | |||||||||||
Return on average assets | 1.05 | % | 0.74 | % | 0.82 | % | |||||
Return on average shareholders' equity | 11.29 | % | 7.41 | % | 8.42 | % | |||||
Return on average tangible common equity | 12.41 | % | 8.71 | % | 9.51 | % | |||||
Net interest margin (Fully Tax Equivalent) | 3.52 | % | 3.31 | % | 3.34 | % | |||||
Efficiency Ratio* | 59.85 | % | 64.59 | % | 62.94 | % | |||||
Average Balances: | |||||||||||
Total bank loans | $ | 981,352 | $ | 929,247 | $ | 953,392 | |||||
Total loan pools | 50,609 | 66,347 | 59,972 | ||||||||
Interest-earning assets | 1,598,344 | 1,495,402 | 1,536,596 | ||||||||
Total assets | 1,691,513 | 1,589,542 | 1,628,253 | ||||||||
Interest-bearing deposits | 1,152,725 | 1,096,445 | 1,113,672 | ||||||||
Interest-bearing liabilities | 1,359,320 | 1,283,058 | 1,309,588 | ||||||||
Shareholders' common equity | 157,933 | 143,116 | 150,114 | ||||||||
Total equity | 157,933 | 158,891 | 158,146 | ||||||||
* - 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. | |||||||||||
8