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8-K - 8-K - MidWestOne Financial Group, Inc. | form8-kchargexoffofloan3.htm |
Exhibit 99.1
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NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact:
Charles N. Funk James M. Cantrell Steven Carr
President & CEO Sr.VP & Interim CFO Dresner Corporate Services
319.356.5800 319.356.5864 312.726.3600
MIDWESTONE FINANCIAL GROUP, INC.
REPORTS COMMERCIAL LOAN CREDIT IMPAIRMENT
Iowa City, Iowa, December 18, 2017 - MidWestOne Financial Group, Inc. (NASDAQ - MOFG) today reported that it
has identified an additional $7.3 million of credit impairment related to a loan made to one of its commercial borrowers based on
new information received about the financial status of the borrower in the fourth quarter. Prior to the fourth quarter of 2017, this
loan had been classified as substandard and had a specific allowance for loan losses related to it of $1.9 million. Mainly due to
this fourth quarter credit impairment, the Company expects to record a loan loss provision in the fourth quarter in the range of
$10.3 million to $10.8 million.
Charles N. Funk, the Company’s CEO, said “For the past three years, we have been dealing with a large commercial
loan that has encountered operating problems. Based on the new information about this borrower and the status of its operations,
it became necessary to provide additional reserves against this loan. We believe that the remaining balance of the loan is supported
by a combination of collateral and allocated reserves and we do not expect any impact on future earnings related to this credit.
We anticipate and expect a return to better asset quality metrics in 2018.”
About MidWestOne Financial Group, Inc.
MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWestOne
Financial is the parent company of MidWestOne Bank, which operates banking offices in Iowa, Minnesota, Wisconsin, Florida,
and Colorado. MidWestOne provides electronic delivery of financial services through its website, MidWestOne.com.
MidWestOne Financial trades 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 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,” “goals,” “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.
Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have an impact
on our ability to achieve operating results, growth plan goals and future prospects include, but are not limited to, the following: (1) credit
quality deterioration or pronounced and sustained reduction in real estate market values causing an increase in the allowance for credit losses
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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 promulgated and to be
promulgated thereunder, as well as the Basel III Rules) 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) the risks of
mergers, 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; (14) volatility of
rate-sensitive deposits; (15) operational risks, including data processing system failures or fraud; (16) asset/liability matching risks and
liquidity risks; (17) the costs, effects and outcomes of existing or future litigation; (18) changes in general economic or industry conditions,
nationally, internationally 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; (20) cyber-attacks; and (21) other risk factors
detailed from time to time in Securities and Exchange Commission filings made by the Company.