FOR IMMEDIATE RELEASE
Charles N. Funk
James M. Cantrell
President & CEO
VP & Interim CFO
Dresner Corporate Services
MIDWESTONE FINANCIAL GROUP, INC.
REPORTS FIRST QUARTER 2018 FINANCIAL RESULTS
Iowa City, Iowa, April 26, 2018 - MidWestOne Financial Group, Inc. (Nasdaq - MOFG) today reported its financial results for the three months ended March 31, 2018. The Company had net income for the first quarter of 2018 of $7.8 million compared with net income of $6.7 million for the same period last year, an increase of $1.1 million, or 16.1%. Both basic and diluted earnings per share were $0.64 for the first quarter of 2018 compared with $0.58 per share for the first quarter of 2017.
Earnings comparisons between the first quarter of 2018 and the same period in 2017 are highlighted by the following:
a $1.2 million, or 4.9%, increase in net interest income, due primarily to a $2.3 million increase in interest and fees on loans, partially offset by an increase of $0.9 million in interest expense on deposits;
a $0.5 million, or 21.6%, decrease in income tax expense, primarily due to the reduction in the corporate federal income tax rate to 21% for 2018 compared to 35% for 2017; and
an increase of $0.2 million, or 2.4%, in noninterest income; partially offset by
an increase of $0.8 million, or 77.7%, in the provision for loan losses, due primarily to loan growth during the quarter of $39.5 million combined with indicated weakness in the agricultural sector.
President and Chief Executive Officer Charles N. Funk stated, “We are off to a good start in 2018 with expansion of the quarterly net interest income, benefit of a lower effective federal income tax rate, and with solid loan and deposit growth. Balance sheet growth and top line revenue growth were solid in the first quarter, and we see encouraging signs of improving asset quality ahead.”
Results of Operations
Net interest income of $26.3 million for the first quarter of 2018 was up $1.2 million, or 4.9%, from $25.1 million for the first quarter of 2017, primarily due to an increase of $2.4 million, or 8.5%, in interest income. A 9 basis point increase in loan yield coupled with a $143.9 million increase in average loan balances, partially offset by a decrease in the merger-related discount accretion of $0.2 million to $0.9 million for the first quarter of 2018, resulted in loan interest income increasing $2.3 million, or 9.4%, to $26.6 million for the first quarter of 2018 compared to the first quarter of 2017. Income from investment securities was $4.4 million for the first quarter of 2018, up from $4.3 million for the first quarter of 2017, which resulted from an increase of $0.7 million in the average balance, partially offset by a decrease of 18 basis points in the tax exempt yield between the two comparable periods. Interest expense increased $1.2 million, or 34.2%, to $4.7 million for the first quarter of 2018, compared to $3.5 million for the same period in 2017 primarily due to an increase in the cost of interest-bearing deposits of 14 basis points and increased average balances of $124.3 million between the two periods.
The net interest margin for the first quarter of 2018, calculated on a fully tax-equivalent basis, was 3.69%, or 10 basis points lower than the net interest margin of 3.79% for the first quarter of 2017. The yield on loans increased 9 basis points and the yield on investment securities decreased by 18 basis points, primarily due to the reduction in the federal income tax rate, resulting in the yield on interest-earning assets for the first quarter of 2018 being 4 basis points higher compared to the first quarter of 2017. The cost of deposits increased 14 basis points, while the average cost of borrowings was higher by 29 basis points for the first quarter of 2018, compared to the first quarter of 2017, reflecting the increasing interest rate environment.
For the first quarter of 2018, the provision for loan losses increased by $0.8 million, or 77.7%, to $1.8 million, compared to $1.0 million for the first quarter of 2017. This increase was primarily due to loan growth (excluding loans held for sale) of $39.5
The following information was filed by Midwestone Financial Group, Inc. (MOFG) on Thursday, April 26, 2018 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.