FOR IMMEDIATE RELEASE
Charles N. Funk
Katie A. Lorenson
President & CEO
Sr.VP & CFO
Dresner Corporate Services
MIDWESTONE FINANCIAL GROUP, INC.
REPORTS THIRD QUARTER 2017 FINANCIAL RESULTS
Iowa City, Iowa, October 26, 2017 - MidWestOne Financial Group, Inc. (NASDAQ - MOFG) today reported its financial results for the three and nine months ended September 30, 2017. Net income for the third quarter of 2017 totaled $6.3 million compared with $6.2 million for the same period last year, an increase of $0.1 million, or 1.9%. Both basic and diluted earnings per share were $0.52 for the third quarter of 2017 compared with $0.54 per share for both for the third quarter of 2016.
Earnings comparisons between the third quarter of 2017 and the same period in 2016 are highlighted by the following:
a $1.9 million, or 7.8%, increase in net interest income, due primarily to a $1.2 million increase in core loan interest income and a $0.7 million increase in discount accretion and investment income, partially offset by a $0.3 million increase in core interest expense and a $0.2 million decrease in interest expense purchase accounting;
a decrease of $0.7 million, or 3.4%, in noninterest expense, due primarily to a $0.4 million decrease in other operating expenses mainly attributable to a sizable wire fraud loss that occurred in the third quarter of 2016 and a $0.3 million decrease in occupancy and equipment expense; and
a $0.2 million, or 3.5%, increase in noninterest income driven by increased other service charges and fees of $0.3 million, specifically card income of $0.3 million, partially offset by a decrease in loan origination and servicing fees due to decreased secondary market fee income; all partially offset by
an increase of $3.4 million, or 336.2%, in the provision for loan losses.
Net income for the nine months ended September 30, 2017 was $20.3 million, an increase of $3.8 million, or 22.8%, compared to $16.5 million for the same period in 2016, with diluted earnings per share of $1.69 and $1.44 for the comparative nine month periods, respectively. The increase in net income was due primarily to a $6.7 million, or 10.0%, decrease in noninterest expense driven by a $4.2 million decrease in merger-related expenses, mainly in data processing ($1.9 million) and salaries and employee benefits expense ($1.5 million), attributable to the merger of Central Bank into MidWestOne Bank. Net interest income increased $2.7 million, or 3.6%, the provision for loans losses increased $3.5 million, or 105.6%, and noninterest income decreased $0.9 million, or 5.0%.
President and Chief Executive Officer Charles N. Funk stated, “We are disappointed that our loan loss provision was larger than expected due to the deterioration of one commercial loan. The quarter included a number of very positive elements, including continued growth in net interest income and the best quarter of loan growth since our 2015 merger with Central. Overall nonperforming asset trends have improved in 2017 and our efficiency ratio shows very good improvement, even after subtracting the 2016 merger related expenses.”
Results of Operations
Net interest income of $26.5 million for the third quarter of 2017 increased $1.9 million, or 7.8%, from $24.6 million for the third quarter of 2016, primarily due to an increase of $2.5 million, or 8.9%, in interest income. An increase in the merger-related discount accretion of $0.7 million, to $1.3 million for the third quarter of 2017 compared to $0.6 million for the third quarter of 2016, assisted by a $69.2 million increase in average loan balances, resulted in loan interest income increasing $1.9 million, or 7.7%, to $26.2 million for the third quarter of 2017 compared to the third quarter of 2016. Income from investment securities was $4.1 million for the third quarter of 2017, up from $3.5 million for the third quarter of 2016, which resulted from an increase of $83.6 million in the average balance, and an increase of 5 basis points in the yield of investment securities between the two comparable periods. Interest expense increased $0.6 million, or 16.9%, to $3.9 million for the third quarter of 2017, compared to
The following information was filed by Midwestone Financial Group, Inc. (MOFG) on Thursday, October 26, 2017 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.