Midwestone Financial Group, Inc. (MOFG) 10-Q Quarterly Report Fri May 08 2020

Iowa City, Iowa - MidWestOne Financial Group, Inc. (Nasdaq - MOFG) (“we”, “our”, or the "Company”) today reported net loss for the first quarter of 2020 of $2.0 million, or $0.12 per diluted common share, compared to net income of $13.4 million, or $0.83 per diluted common share, for the fourth quarter of 2019 (the “linked quarter”). Credit loss expense for the first quarter was $21.7 million, which reduced diluted earnings per common share by approximately $0.99 for the first quarter of 2020.

Charles Funk, President and Chief Executive Officer, commented, “The quarter was dominated by the activity, which accelerated in March, to prepare and deal with the effects of the COVID-19 pandemic on our employees, customers and communities. We had many bankers in April working 18 hour days to assure that our customers with PPP applications were promptly served. We also implemented CECL as a means of calculating our necessary credit loss expense. Our credit loss expense of $21.7 million is related to the worsening forecast for the U.S. and our regional economy due to the significant slowing we’ve seen in current and forecasted economic activity. We saw a number of positive elements during the quarter, including excellent deposit growth, very good fee income across our footprint, and improved expense management.”


FINANCIAL HIGHLIGHTS	Three Months Ended
				March 31,				December 31,				March 31,
				2020				2019				2019
	(Dollars in thousands, except per share amounts)
Net interest income	$	37,406			$	39,584			$	25,976
Noninterest income	10,155				9,036				5,410
Total revenue, net of interest expense	47,561				48,620				31,386
Credit loss expense	21,733				604				1,594
Noninterest expense	30,001				36,436				20,617
(Loss) income before income tax (benefit) expense	(4,173)				11,580				9,175
Income tax (benefit) expense	(2,198)				(1,791)				1,890
Net (loss) income	$	(1,975)			$	13,371			$	7,285
Diluted (loss) earnings per share	$	(0.12)			$	0.83			$	0.60

Return on average assets	(0.17)		%		1.14		%		0.89		%
Return on average equity	(1.54)		%		10.55		%		8.22		%
Return on average tangible equity⁽²⁾	(0.47)		%		15.60		%		10.87		%
Efficiency ratio⁽²⁾	57.67		%		63.05		%		62.48		%

¹First Quarter Summary compares to the linked quarter unless noted.

²Non-GAAP measure. See pages 15-17 for a reconciliation to the most directly comparable GAAP measure. 1

The following information was filed by Midwestone Financial Group, Inc. (MOFG) on Thursday, April 30, 2020 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.

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Inside Midwestone Financial Group, Inc.'s 10-Q Quarterly Report:

Financial - Income Highlight
In addition to purchase accounting adjustments, the yield on our loan portfolio is affected by the amount of nonaccrual loans (which do not earn interest income), the mix of the portfolio (real estate loans generally have a lower overall yield than commercial and agricultural loans), the effects of competition and the interest rate environment on the amounts and volumes of new loan originations, and the mix of variable-rate versus fixed-rate loans in our portfolio.

Financial - Debt Highlight
A severe and sustained economic downturn could impact the debt securities issuers' ability to make payments on debt or to raise additional funds to continue operations, which could result in an increased credit loss expense.
Other - Other Highlight
An extended recession could cause large numbers of our deposit customers to withdraw their funds, which could increase our reliance on more volatile or expensive funding sources.
Financial - Income Highlight
In such a scenario, interest income in future periods could be negatively impacted.
Financial - Income Highlight
Income Tax Expense Our effective income tax rate, or income taxes divided by income before taxes, was (52.7)% for the first quarter of 2020, which was lower than the effective tax rate of 20.6% for the first quarter of 2019.
Financial - Earnings
This decrease was primarily attributable...Read more
Financial - Income
These decreases impact the comparability...Read more
Financial - Expense
In addition, higher short-term interest...Read more
Other - Other
Risk ratings are selected from...Read more
Financial - Earnings
Management believes these measures provide...Read more
Other - Other
While we believe that we...Read more
Revenue - Product
Generally, our principal sources of...Read more
Other - Other
On March 27, 2020, President...Read more
Other - Other
A sustained economic downturn could...Read more
Other - Other
In Minnesota, the Governor recently...Read more
Other - Other
Based on the inherent risk...Read more
Financial - Shares
The total shareholders' equity to...Read more
Other - Other
The Company's national home price...Read more
Other - Other
When a loan relationship with...Read more
Financial - Earnings
A tax-equivalent analysis is performed...Read more
Other - Other
The board of directors of...Read more
Financial - Debt
We also have $41.6 million...Read more
Financial - Debt
FINANCIAL CONDITION Following is a...Read more
Other - Other
Specifically, as of March 31,...Read more
Financial - Expense
The increased interest expense on...Read more
Other - Other
54 Table of Contents Inflation...Read more
Other - Other
These revisions expand the population...Read more
Financial - Earnings
Our net interest margin for...Read more
Financial - Income
Interest income from investment securities...Read more
M & A - Other
The increase in the ACL...Read more
Other - Other
In Colorado, the Governor recently...Read more
Revenue - Product
The program is designed for...Read more
Revenue - Product
The level of borrowed funds...Read more
Revenue - Product
The forecast projected a gradual...Read more
Other - Other
This plan may include goals...Read more
Other - Other
The agencies confirmed with the...Read more
Other - Other
On April 7, 2020, federal...Read more
Financial - Income
Net interest income of $37.4...Read more
Financial - Income
The increase was also due...Read more
Other - Other
In addition, as part of...Read more
Financial - Income
Noninterest Income The following table...Read more
Financial - Expense
Significant worsening of forecasted conditions...Read more
Other - Other
Federal, state, and local governments...Read more
Revenue - Product
50 Table of Contents Nonperforming...Read more
Financial - Expense
The COVID-19 pandemic drove a...Read more
Revenue - Product
Foreclosed Assets, Net Foreclosed assets,...Read more
Financial - Expense
Interest expense on borrowed funds...Read more
Financial - Income
44 Table of Contents The...Read more
Financial - Income
The increase was primarily due...Read more
Financial - Expense
We anticipate increases in noninterest...Read more
Other - Other
Goodwill and Other Intangible Assets....Read more
Financial - Expense
Interest expense increased $2.6 million,...Read more
Legal - Other
Each state has experienced significant...Read more
Other - Other
The Company does not anticipate...Read more
Financial - Earnings
After factoring in the tax...Read more
Other - Other
The following table presents selected...Read more
Other - Other
As of May 4, 2020,...Read more
Financial - Debt
Debt securities classified as AFS,...Read more
Financial - Earnings
The Company recorded a net...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Midwestone Financial Group, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: MOFG
CIK: 1412665
Form Type: 10-Q Quarterly Report
Accession Number: 0001412665-20-000052
Submitted to the SEC: Fri May 08 2020 12:42:53 PM EST
Accepted by the SEC: Fri May 08 2020
Period: Tuesday, March 31, 2020
Industry: State Commercial Banks

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Midwestone Financial Group, Inc. (MOFG) SEC Filing 10-Q Quarterly report for the period ending Tuesday, March 31, 2020

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