FOR IMMEDIATE RELEASE
Charles N. Funk
Gary J. Ortale
President & CEO
EVP & CFO
Dresner Corporate Services
MIDWESTONE FINANCIAL GROUP, INC.
REPORTS FOURTH QUARTER 2013 FINANCIAL RESULTS
Iowa City, Iowa, January 23, 2014 - MidWestOne Financial Group, Inc. (NASDAQ - MOFG), today reported results for its three months and year ended December 31, 2013. Net income for the fourth quarter of 2013 was consistent with the fourth quarter of 2012, at $4.4 million. Diluted earnings per share were $0.52 for the fourth quarter of 2013, compared with $0.51 for the fourth quarter of 2012.
Earnings comparisons between the fourth quarter of 2013 and the same period in 2012 were driven primarily by:
a decrease of 5.9% in noninterest expense; and
a 1.1% increase in net interest income; partially offset by
a 21.3% decrease in noninterest income, mainly due to a $0.7 million decrease in mortgage origination and loan servicing fees in the fourth quarter of 2013.
Net income for the year ended December 31, 2013 was $18.6 million, which represents a $2.1 million, or 12.5%, increase compared to $16.5 million of net income for the same period of 2012, with diluted earnings per share of $2.18 and $1.94 for the comparative full-year periods, respectively. The increase in net income was due primarily to lower noninterest expense, mainly due to the expense related to the termination and liquidation of the Company's defined benefit pension plan in 2012, offset in part by decreased noninterest income, mainly due to the gain on the sale of the Home Mortgage Center location in 2012. After excluding the $6.1 million pension liquidation expense and the $4.0 million gain on the sale of the Company's Home Mortgage Center, adjusted diluted earnings per share for the year ended December 31, 2012 were $2.10.
“Although not our highest earning quarter of the year, the fourth quarter was nevertheless a solid one for our company,” stated President and Chief Executive Officer, Charles N. Funk. “Diluted earnings per share of $2.18 for full-year 2013 represent an all-time record for MidWestOne. In this low interest rate environment we believe our full-year return on average tangible equity of 11.43% represents a good return for our shareholders.”
Results of Operations
Net interest income for the fourth quarter of 2013 increased $0.1 million, or 1.1%, from $13.2 million for the fourth quarter of 2012, to $13.3 million. Despite increases in loan balances, loan interest income decreased $0.5 million, or 3.9%, to $12.2 million for the fourth quarter of 2013, compared to $12.7 million for the same period of 2012, due 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 fourth quarter of 2013 compared to $3.9 million for the fourth quarter of 2012, due mainly to a decrease of $39.6 million in the average balance of investment securities between the two comparable periods. Income from loan pool participations was $0.1 million for the fourth quarter of 2013, a decrease of $0.1 million compared to the same period a year ago, on a much lower level of investment in 2013, 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 27.7%, to $2.7 million for the fourth quarter of 2013, compared to $3.7 million for the same period of 2012, primarily due to lower expense on deposit accounts resulting from lower interest rates.
The following information was filed by Midwestone Financial Group, Inc. (MOFG) on Thursday, January 23, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.