MidWestOne Financial Group, Inc. - FORM 8-K - EX-99.1 - July 22, 2021

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FOR IMMEDIATE RELEASEJuly 22, 2021

MIDWESTONE FINANCIAL GROUP, INC.
REPORTS FINANCIAL RESULTS FOR THE
SECOND QUARTER OF 2021
Second Quarter Summary(1)
•Net income for the second quarter was $17.3 million, or $1.08 per diluted common share.
◦Total revenue, net of interest expense, of $48.7 million.
◦Credit loss benefit of $2.1 million.
◦Noninterest expense of $28.7 million.
•Excluding PPP loans, commercial loans were $2.61 billion,(2) as compared to $2.56 billion(2) for the first quarter of 2021 (the "linked quarter"), an increase of 2.2%.
•Average total deposits were $4.88 billion, as compared to $4.57 billion for the linked quarter, an increase of 6.6%, while cost of average total deposits decreased to 0.28%.
•Efficiency ratio of 54.83%(2).
•Nonperforming assets declined 8.0% and the net charge-off ratio was 5 bps.
Iowa City, Iowa - MidWestOne Financial Group, Inc. (Nasdaq: MOFG) (“we”, “our”, or the "Company”) today reported net income for the second quarter of 2021 of $17.3 million, or $1.08 per diluted common share, compared to net income of $21.6 million, or $1.35 per diluted common share, for the linked quarter.
CEO COMMENTARY
Charles Funk, Chief Executive Officer of the Company, commented, "This was another solid quarter for our Company with good core loan growth, improved asset quality, and a nice build in our tangible book value. Despite the continuation of very low credit line usage, our commercial bankers were able to produce a quarter of respectable core loan growth although potential headwinds remain."
"The low interest rate environment continues to pressure commercial bank margins, and we are not immune. Our noninterest income results reflect a decrease in mortgage gain on sale margins; however, we continue to be running at an 'above normal' rate of mortgage originations. Our wealth management group continues to produce good results as well."
"With respect to capital, we believe our stock currently represents a compelling value, and we are selectively repurchasing our stock at opportune moments. We returned $4.7 million of capital to shareholders during the second quarter of 2021, including $1.1 million from such stock repurchases."
"Finally, we commend our fine staff for closing nearly one-half of a billion dollars of PPP loans. For some borrowers, these funds were literally the difference between survival and failure. Our bankers deserve much credit for their long hours and perseverance over the past twelve months."

1Second Quarter Summary compares to the linked quarter unless noted.                         
2Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.                1                                    






FINANCIAL HIGHLIGHTSThree Months EndedSix Months Ended
June 30,March 31,June 30,June 30,June 30,
(Dollars in thousands, except per share amounts)20212021202020212020
Net interest income$38,505 $38,617 $38,712 $77,122 $76,118 
Noninterest income10,218 11,824 8,269 22,042 18,424 
Total revenue, net of interest expense48,723 50,441 46,981 99,164 94,542 
Credit loss (benefit) expense(2,144)(4,734)4,685 (6,878)26,418 
Noninterest expense28,670 27,700 28,038 56,370 58,039 
   Income before income tax expense22,197 27,475 14,258 49,672 10,085 
Income tax expense 4,926 5,827 2,546 10,753 348 
   Net income $17,271 $21,648 $11,712 $38,919 $9,737 
Diluted earnings per share$1.08 $1.35 $0.73 $2.43 $0.60 
Return on average assets1.18 %1.59 %0.92 %1.38 %0.40 %
Return on average equity13.24 %17.01 %9.21 %15.10 %3.82 %
Return on average tangible equity(1)
16.75 %21.52 %13.50 %19.10 %6.48 %
Efficiency ratio(1)
54.83 %50.77 %54.80 %52.76 %56.24 %
(1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
COVID-19 UPDATE
Loan Modifications
As of June 30, 2021, the outstanding balance of loans modified as a result of the COVID-19 pandemic totaled $21.0 million, an increase of 26% from $16.7 million at March 31, 2021. The increase from the end of the first quarter of 2021 was due to an additional deferral that was granted for one large commercial real estate loan. Of those modified loans at June 30, 2021, $0.7 million were in their first deferral period while $20.3 million were in a second deferral period.
SBA Paycheck Protection Program (PPP) Loans
The PPP Extension Act of 2021 set a deadline for PPP applications of May 31, 2021. The following table presents PPP loan measures as of the dates indicated:
June 30, 2021March 31, 2021
Round 1Round 2TotalRound 1Round 2Total
(Dollars in millions)#$#$#$#$#$#$
Total PPP Loans Funded2,681348.5 2,175149.3 4,856497.8 2,681348.5 1,623125.7 4,304474.2 
PPP Loan Forgiveness(1)
2,247285.7 44112.3 2,688298.0 1,709210.3 —— 1,709210.3 
Outstanding PPP Loans(2)
41653.9 1,734130.5 2,150184.4 954128.2 1,623120.5 2,577248.7 
Unearned Income$0.5$6.0$6.5$1.7$5.2$6.9
(1) Excluded from the PPP Loan Forgiveness is $8.9 million as of June 30, 2021 and March 31, 2021 of PPP loans that were paid off by the borrower prior to forgiveness.
(2) Outstanding loans are presented net of unearned income.
Vulnerable Industries
We believe loans to certain industries are uniquely vulnerable to credit deterioration stemming from the COVID-19 pandemic. The following table presents our exposure to those industries as of the dates indicated.
June 30, 2021March 31, 2021
(Dollars in millions)Balance% of Total LoansBalance% of Total Loans
Non-essential Retail$78.4 2.4 %$88.0 2.6 %
Restaurants51.3 1.5 56.1 1.7 
Hotels108.2 3.2 114.4 3.4 
CRE-Retail202.6 6.1 191.1 5.7 
Arts, Entertainment & Gaming23.0 0.7 23.5 0.7 
     Total Vulnerable Industries Loan Portfolio$463.5 13.9 %$473.1 14.1 %


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INCOME STATEMENT HIGHLIGHTS

Net Interest Income
Net interest income of $38.5 million in the second quarter of 2021 was relatively flat compared to $38.6 million in the first quarter of 2021 and reflected the income benefit from higher average earning asset balances in the second quarter of 2021 offset by lower PPP loan fee income and loan purchase discount accretion. Average interest earning assets increased $323.6 million to $5.52 billion in the second quarter of 2021, compared to the first quarter of 2021, as cash on hand and cash inflows from deposit activity was used to purchase debt securities and fund loan originations. Net PPP loan fee accretion was $2.5 million in the second quarter of 2021 compared to $3.7 million in the linked quarter. Loan purchase discount accretion was $0.9 million in the second quarter of 2021, down from $1.1 million in the linked quarter.
The Company's tax equivalent net interest margin was 2.88% in the second quarter of 2021 compared to 3.10% in the linked quarter as lower earning asset yields more than offset reduced funding costs. Total earning asset yields decreased 28 bps from the linked quarter due primarily to the decline in PPP loan fee income described above. The cost of interest bearing liabilities decreased 7 bps to 0.49%, primarily as a result of interest bearing deposit costs of 0.35%, which declined 5 bps from the linked quarter.
Noninterest Income
Noninterest income for the second quarter of 2021 decreased $1.6 million, or 14%, from the linked quarter. The decrease was primarily due to a $1.6 million decrease in loan revenue, coupled with a decrease of $0.4 million in other noninterest income. The decline in loan revenue included a $0.6 million reduction in mortgage origination fees from lower gain on sale margins as well as a $0.6 million decrease stemming from the fair value of our mortgage servicing rights. These decreases were partially offset by a $0.4 million increase in card revenue, which was primarily due to increased transaction volumes.
The following table presents details of noninterest income for the periods indicated:
Three Months Ended
Noninterest IncomeJune 30,March 31,June 30,
(In thousands)202120212020
Investment services and trust activities$2,809 $2,836 $2,217 
Service charges and fees1,475 1,487 1,290 
Card revenue1,913 1,536 1,237 
Loan revenue3,151 4,730 1,910 
Bank-owned life insurance538 542 635 
Investment securities gains, net42 27 6 
Other290 666 974 
Total noninterest income
$10,218 $11,824 $8,269 
Noninterest Expense
Noninterest expense for the second quarter of 2021 increased $1.0 million, or 3.5%, from the linked quarter primarily due to increases in legal and professional, compensation and employee benefits, and other noninterest expenses of $0.6 million, $0.5 million, and $0.4 million, respectively. The increase in legal and professional expenses was due primarily to a legal insurance recovery of $0.4 million in the first quarter of 2021 that did not recur in the second quarter of 2021. The increase in compensation and employee benefits was due primarily to a $0.6 million reduction in the benefit from SBA PPP loan origination costs which are deferred and amortized over the life of the loan to which they relate. The increased noninterest expenses, as well as the decline in noninterest income noted above, were the primary drivers of the increase in the efficiency ratio, which increased 4.06 percentage points to 54.83%, as compared to the linked quarter efficiency ratio of 50.77%.







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The following table presents details of noninterest expense for the periods indicated:
Three Months Ended
Noninterest ExpenseJune 30,March 31,June 30,
(In thousands)202120212020
Compensation and employee benefits$17,404 $16,917 $15,682 
Occupancy expense of premises, net2,198 2,318 2,253 
Equipment1,861 1,793 2,010 
Legal and professional1,375 783 1,382 
Data processing1,347 1,252 1,240 
Marketing873 1,006 910 
Amortization of intangibles1,341 1,507 1,748 
FDIC insurance245 512 445 
Communications371 409 449 
Foreclosed assets, net136 47 34 
Other1,519 1,156 1,885 
     Total noninterest expense $28,670 $27,700 $28,038 
Income Taxes
The effective income tax rate was 22.2% in the second quarter of 2021 compared to 21.2% in the linked quarter. The effective income tax rate in the second quarter of 2021 reflected an increase in income taxes based on the statutory rate and state income taxes, net of federal income tax benefits, primarily due to the net income earned during the quarter, offset by benefits related to tax-exempt interest and bank-owned life insurance. The effective income tax rate for the full year 2021 is expected to be in the range of 20-22%.


BALANCE SHEET, LIQUIDITY AND CAPITAL HIGHLIGHTSAs of or for the Three Months Ended
June 30,March 31,June 30,
(Dollars in millions, except per share amounts)202120212020
Ending Balance Sheet
Total assets$5,749.2 $5,737.3 $5,231.0 
Loans held for investment, net of unearned income3,330.2 3,358.2 3,597.0 
Total securities held for investment2,072.5 1,896.9 1,187.5 
Total deposits4,792.7 4,794.6 4,265.4 
Average Balance Sheet
Average total assets$5,851.7 $5,520.3 $5,098.8 
Average total loans3,396.6 3,429.7 3,633.7 
Average total deposits4,875.3 4,573.9 4,165.6 
Funding and Liquidity
Short-term borrowings$212.3 $175.8 $162.2 
Long-term debt169.8 201.7 190.0 
Loans to deposits ratio69.48 %70.04 %84.33 %
Equity
Total shareholders' equity$530.3 $511.3 $520.8 
Common equity ratio9.22 %8.91 %9.96 %
Tangible common equity(1)
445.4 425.1 398.4 
Tangible common equity ratio(1)
7.86 %7.52 %7.80 %
Per Share Data
Book value$33.22 $32.00 $32.35 
Tangible book value(1)
$27.90 $26.60 $24.74 
(1) Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

Loans Held for Investment
Loans held for investment, net of unearned income, decreased $28.0 million, or 1%, to $3.33 billion from March 31, 2021, driven primarily by PPP loan forgiveness and lower line utilization.


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The following table presents the composition of loans held for investment, net of unearned income, as of the dates indicated:
Loans Held for InvestmentJune 30, 2021March 31, 2021June 30, 2020
Balance% of TotalBalance% of TotalBalance% of Total
(dollars in thousands)
Commercial and industrial$982,092 29.5 %$993,770 29.6 %$1,084,527 30.2 %
Agricultural107,834 3.2 117,099 3.5 140,837 3.9 
Commercial real estate
Construction and development
168,070 5.0 164,927 4.9 199,950 5.6 
Farmland
134,877 4.1 138,199 4.1 161,897 4.5 
Multifamily
255,826 7.7 261,806 7.8 247,403 6.9 
Other
1,147,016 34.4 1,128,660 33.6 1,155,489 32.0 
Total commercial real estate
1,705,789 51.2 1,693,592 50.4 1,764,739 49.0 
Residential real estate
One-to-four family first liens
332,117 10.0 337,408 10.0 377,100 10.5 
One-to-four family junior liens
136,464 4.1 137,025 4.1 155,814 4.3 
Total residential real estate
468,581 14.1 474,433 14.1 532,914 14.8 
Consumer65,860 2.0 79,267 2.4 74,022 2.1 
Loans held for investment, net of unearned income
$3,330,156 100.0 %$3,358,161 100.0 %$3,597,039 100.0 %
Credit Loss Expense & Allowance for Credit Losses

The following table shows the activity in the allowance for credit losses for the periods indicated:
Three Months EndedSix Months Ended
Allowance for Credit Losses Roll ForwardJune 30,March 31,June 30,June 30,June 30,
(In thousands)20212021202020212020
Beginning balance$50,650 $55,500 $51,187 $55,500 $29,079 
Cumulative effect of change in accounting principle - CECL— — — — 3,984 
Charge-offs(840)(1,003)(2,103)(1,843)(3,600)
Recoveries434 687 236 1,121 535 
Net charge-offs(406)(316)(1,867)(722)(3,065)
Credit loss (benefit) expense related to loans(2,244)(4,534)6,324 (6,778)25,646 
Ending balance$48,000 $50,650 $55,644 $48,000 $55,644 

As of June 30, 2021, the allowance for credit losses ("ACL") was $48.0 million, or 1.44% of loans held for investment, net of unearned income, compared with $50.7 million, or 1.51%, at March 31, 2021. After excluding net PPP loans, the ACL as a percentage of loans held for investment, net of unearned income, decreased to 1.53%(1) as of June 30, 2021, from 1.63%(1) at March 31, 2021. The decline in the ACL during the second quarter reflected overall improvements in the economic forecast and an improved credit profile outlook when compared to the linked quarter.
(1)Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

Deposits
The following table presents the composition of our deposit portfolio as of the dates indicated:
Deposit CompositionJune 30, 2021March 31, 2021June 30, 2020
(In thousands)Balance% of TotalBalance% of TotalBalance% of Total
Noninterest bearing deposits$952,764 19.9 %$958,526 20.0 %$867,637 20.3 %
Interest checking deposits1,414,942 29.6 1,406,070 29.4 1,153,697 27.1 
Money market deposits936,683 19.5 950,300 19.8 811,368 19.0 
Savings deposits596,199 12.4 580,862 12.1 463,262 10.9 
Total non-maturity deposits
3,900,588 81.4 3,895,758 81.3 3,295,964 77.3 
Time deposits of $250 and under538,331 11.2 558,338 11.6 656,723 15.4 
Time deposits over $250 353,747 7.4 340,467 7.1 312,748 7.3 
Total time deposits
892,078 18.6 898,805 18.7 969,471 22.7 
Total deposits
$4,792,666 100.0 %$4,794,563 100.0 %$4,265,435 100.0 %


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CREDIT RISK PROFILE
As of or For the Three Months Ended
HighlightsJune 30,March 31,June 30,
(dollars in thousands)202120212020
Credit loss (benefit) expense related to loans$(2,244)$(4,534)$6,324 
Net charge-offs$406 $316 $1,867 
Net charge-off ratio(1)
0.05 %0.04 %0.21 %
At period-end
Pass$3,102,688 $3,112,728 $3,301,353 
Special Mention / Watch115,414 130,052 204,442 
Classified112,054 115,381 91,244 
Total loans held for investment, net$3,330,156 $3,358,161 $3,597,039 
Classified loans ratio(2)
3.36 %3.44 %2.54 %
Nonaccrual loans held for investment$40,764 $43,874 $41,303 
Accruing loans contractually past due 90 days or more665 508 3,238 
Total nonperforming loans41,429 44,382 44,541 
Foreclosed assets, net755 1,487 965 
Total nonperforming assets
$42,184 $45,869 $45,506 
Nonperforming loans ratio(3)
1.24 %1.32 %1.24 %
Nonperforming assets ratio(4)
0.73 %0.80 %0.87 %
Allowance for credit losses$48,000 $50,650 $55,644 
Allowance for credit losses ratio(5)
1.44 %1.51 %1.55 %
Adjusted allowance for credit losses ratio(6)
1.53 %1.63 %1.70 %
(1) Net charge-off ratio is calculated as annualized net charge-offs divided by average loans held for investment, net of unearned income, during the period.
(2) Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period.
(3) Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period.
(4) Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period.
(5) Allowance for credit losses ratio is calculated as allowance for credit losses divided by loans held for investment, net of unearned income, at the end of the period.
(6) Non-GAAP Measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
The following table presents a roll forward of nonperforming loans for the period indicated:
Nonperforming Loans
(dollars in thousands)Nonaccrual90+ Days Past Due & Still AccruingTotal
Balance at March 31, 2021
$43,874 $508 $44,382 
Loans placed on nonaccrual or 90+ days past due & still accruing455 688 1,143 
Repayments (including interest applied to principal)(2,669)— (2,669)
Loans returned to accrual status or no longer past due— (503)(503)
Charge-offs(766)(28)(794)
Transfers to foreclosed assets(130)— (130)
Balance at June 30, 2021
$40,764 $665 $41,429 



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CAPITAL
Effective March 31, 2020, we elected the 5-year phase-in option allowed under the interim final rule (IFR) issued by the federal banking regulatory agencies that delays the estimated impact on regulatory capital stemming from the implementation of the current expected credit losses (CECL) accounting standard. The IFR allows the add back of 100% of the capital effect from the day one CECL transition adjustment and 25% of the capital effect from subsequent increases in the allowance for credit losses through the two-year period ending December 31, 2021. This cumulative amount will then be reduced from capital over the subsequent three-year period.
Regulatory Capital RatiosJune 30,March 31,June 30,
2021 (1)
20212020
MidWestOne Financial Group, Inc. Consolidated
Tier 1 leverage ratio8.50 %8.78 %8.72 %
Common equity tier 1 capital ratio10.26 %10.16 %9.48 %
Tier 1 capital ratio11.21 %11.13 %10.48 %
Total capital ratio13.63 %13.75 %11.72 %
MidWestOne Bank
Tier 1 leverage ratio9.15 %9.60 %9.39 %
Common equity tier 1 capital ratio12.09 %12.19 %11.34 %
Tier 1 capital ratio12.09 %12.19 %11.34 %
Total capital ratio13.02 %13.19 %12.47 %
(1) Capital ratios for June 30, 2021 are preliminary

CORPORATE UPDATE
Share Repurchase Program
For the period April 1, 2021 through June 22, 2021, under the prior repurchase program that was announced on August 20, 2019, which allowed for the repurchase of up to $10.0 million of common stock, the Company repurchased 20,985 shares of its common stock at an average price of $29.66 per share and a total cost of $0.6 million, leaving $2.1 million of shares that were available to be repurchased under that repurchase program.
On June 22, 2021, the Board of Directors of the Company approved a new share repurchase program which replaced the prior repurchase program, allowing for the repurchase of up to $15.0 million of the Company's common stock through December 31, 2023. For the period June 23, 2021 through June 30, 2021, the Company repurchased 17,790 shares of its common stock at an average price of $29.53 per share and a total cost of $0.5 million. At June 30, 2021, $14.5 million remained available to repurchase shares under the Company's new share repurchase program.
Cash Dividend Announcement
The Board of Directors of the Company declared a cash dividend of $0.2250 per common share on July 20, 2021. The dividend is payable September 15, 2021, to shareholders of record at the close of business on September 1, 2021.
Subordinated Debenture Redemption
On May 31, 2021, the Company exercised its option to redeem, in whole, $10.8 million of outstanding subordinated debentures (the "ATB Debentures") that were assumed upon the Company's acquisition of ATBancorp. The ATB Debentures had a stated maturity of May 31, 2023 and bore interest at a fixed annual rate of 6.5%. The amount of ATB Debentures qualifying as tier 2 regulatory capital would have been phased-out completely starting in the second quarter of 2022.
CONFERENCE CALL DETAILS
The Company will host a conference call for investors at 11:00 a.m. CT on Friday, July 23, 2021. To participate, please dial 866-233-3483 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until November 4, 2021, by calling 877-344-7529 and using the replay access code of 10157115. A transcript of the call will also be available on the Company’s web site (www.midwestonefinancial.com) within three business days of the call.



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ABOUT MIDWESTONE FINANCIAL GROUP, INC.
MidWestOne Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWestOne 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.bank. MidWestOne Financial Group, Inc. trades on the Nasdaq Global Select Market under the symbol “MOFG”.


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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) effects of the COVID-19 pandemic, including its effects on the economic environment, our customers and our operations, as well as any changes to federal, state, or local government laws, regulations, or orders in connection with the pandemic; (2) government intervention in the U.S. financial system in response to the COVID-19 pandemic, including the effects of recent legislative, tax, accounting and regulatory actions and reforms, including the Coronavirus Aid, Relief, and Economic Security Act, the Consolidated Appropriations Act, 2021 and the American Rescue Plan; (3) the impact of the COVID-19 pandemic on our financial results, including possible lost revenue and increased expenses (including the cost of capital), as well as possible goodwill impairment charges; (4) credit quality deterioration or pronounced and sustained reduction in real estate market values causing an increase in the allowance for credit losses, an increase in the credit loss expense, and a reduction in net earnings; (5) the effects of interest rates, including on our net income and the value of our securities portfolio; (6) 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; (7) fluctuations in the value of our investment securities; (8) governmental monetary and fiscal policies; (9) changes in and uncertainty related to benchmark interest rates used to price loans and deposits, including the expected elimination of LIBOR and the adoption of a substitute; (10) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators; (11) the ability to attract and retain key executives and employees experienced in banking and financial services; (12) the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio; (13) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (14) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (15) 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, financial technology companies, and other financial institutions operating in our markets or elsewhere or providing similar services; (16) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (17) 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; (18) volatility of rate-sensitive deposits; (19) operational risks, including data processing system failures or fraud; (20) asset/liability matching risks and liquidity risks; (21) the costs, effects and outcomes of existing or future litigation; (22) changes in general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business; (23) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (24) war or terrorist activities, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (25) the effects of cyber-attacks; (26) the imposition of tariffs or other domestic or international governmental policies impacting the value of the agricultural or other products of our borrowers; and (27) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.


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MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER CONSOLIDATED BALANCE SHEETS
 June 30,March 31,December 31,September 30,June 30,
(In thousands)20212021202020202020
ASSETS
Cash and due from banks$52,297 $57,154 $65,078 $71,901 $65,863 
Interest earning deposits in banks11,124 80,924 17,409 55,421 45,018 
Federal funds sold13 7,691 172 7,540 6,329 
Total cash and cash equivalents63,434 145,769 82,659 134,862 117,210 
Debt securities available for sale at fair value2,072,452 1,896,894 1,657,381 1,366,344 1,187,455 
Loans held for sale6,149 58,333 59,956 13,096 12,048 
Gross loans held for investment3,344,156 3,374,076 3,496,790 3,555,969 3,618,675 
Unearned income, net(14,000)(15,915)(14,567)(18,537)(21,636)
Loans held for investment, net of unearned income3,330,156 3,358,161 3,482,223 3,537,432 3,597,039 
Allowance for credit losses(48,000)(50,650)(55,500)(58,500)(55,644)
Total loans held for investment, net3,282,156 3,307,511 3,426,723 3,478,932 3,541,395 
Premises and equipment, net84,667 85,581 86,401 87,955 88,929 
Goodwill62,477 62,477 62,477 62,477 93,977 
Other intangible assets, net22,394 23,735 25,242 26,811 28,443 
Foreclosed assets, net755 1,487 2,316 724 965 
Other assets154,731 155,525 153,493 159,507 160,541 
Total assets$5,749,215 $5,737,312 $5,556,648 $5,330,708 $5,230,963 
LIABILITIES          
Noninterest bearing deposits$952,764 $958,526 $910,655 $864,504 $867,637 
Interest bearing deposits3,839,902 3,836,037 3,636,394 3,469,137 3,397,798 
Total deposits4,792,666 4,794,563 4,547,049 4,333,641 4,265,435 
Short-term borrowings212,261 175,785 230,789 183,893 162,224 
Long-term debt169,839 201,696 208,691 245,481 189,973 
Other liabilities44,156 53,948 54,869 68,612 92,550 
Total liabilities5,218,922 5,225,992 5,041,398 4,831,627 4,710,182 
SHAREHOLDERS' EQUITY          
Common stock16,581 16,581 16,581 16,581 16,581 
Additional paid-in capital299,888 299,747 300,137 299,939 299,542 
Retained earnings219,884 206,230 188,191 175,017 198,382 
Treasury stock(15,888)(15,278)(14,251)(12,272)(12,272)
Accumulated other comprehensive income9,828 4,040 24,592 19,816 18,548 
Total shareholders' equity530,293 511,320 515,250 499,081 520,781 
Total liabilities and shareholders' equity$5,749,215 $5,737,312 $5,556,648 $5,330,708 $5,230,963 




10






MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FIVE QUARTER AND YEAR TO DATE CONSOLIDATED STATEMENTS OF INCOME
 Three Months EndedSix Months Ended
June 30,March 31,December 31,September 30,June 30,June 30,June 30,
(In thousands, except per share data)202120212020202020202021 2020
Interest income
Loans, including fees$34,736 $36,542 $38,239 $38,191 $40,214 $71,278 $82,226 
Taxable investment securities6,483 5,093 4,673 4,574 4,646 11,576 8,363 
Tax-exempt investment securities2,549 2,555 2,529 2,360 1,858 5,104 3,370 
Other19 14 29 29 40 33 204 
Total interest income43,787 44,204 45,470 45,154 46,758 87,991 94,163 
Interest expense
Deposits3,409 3,608 4,265 5,296 6,409 7,017 14,358 
Short-term borrowings161 128 142 175 263 289 597 
Long-term debt1,712 1,851 2,026 1,874 1,374 3,563 3,090 
Total interest expense5,282 5,587 6,433 7,345 8,046 10,869 18,045 
Net interest income38,505 38,617 39,037 37,809 38,712 77,122 76,118 
Credit loss (benefit) expense(2,144)(4,734)(3,041)4,992 4,685 (6,878)26,418 
Net interest income after credit loss (benefit) expense40,649 43,351 42,078 32,817 34,027 84,000 49,700 
Noninterest income
Investment services and trust activities2,809 2,836 2,518 2,361 2,217 5,645 4,753 
Service charges and fees1,475 1,487 1,571 1,491 1,290 2,962 3,116 
Card revenue1,913 1,536 1,517 1,600 1,237 3,449 2,602 
Loan revenue3,151 4,730 3,900 3,252 1,910 7,881 3,033 
Bank-owned life insurance538 542 541 530 635 1,080 1,155 
Investment securities gains, net42 27 30 106 6 69 48 
Other290 666 549 230 974 956 3,717 
Total noninterest income10,218 11,824 10,626 9,570 8,269 22,042 18,424 
Noninterest expense
Compensation and employee benefits17,404 16,917 17,638 16,460 15,682 34,321 32,299 
Occupancy expense of premises, net2,198 2,318 2,476 2,278 2,253 4,516 4,594 
Equipment1,861 1,793 2,040 1,935 2,010 3,654 3,890 
Legal and professional1,375 783 2,052 1,184 1,382 2,158 2,917 
Data processing1,347 1,252 1,460 1,308 1,240 2,599 2,594 
Marketing873 1,006 986 857 910 1,879 1,972 
Amortization of intangibles1,341 1,507 1,569 1,631 1,748 2,848 3,776 
FDIC insurance245 512 495 470 445 757 893 
Communications371 409 412 428 449 780 906 
Foreclosed assets, net136 47 (35)13 34 183 172 
Goodwill impairment— — — 31,500 — — — 
Other1,519 1,156 2,822 1,875 1,885 2,675 4,026 
Total noninterest expense28,670 27,700 31,915 59,939 28,038 56,370 58,039 
Income (loss) before income tax expense22,197 27,475 20,789 (17,552)14,258 49,672 10,085 
Income tax expense 4,926 5,827 4,079 2,272 2,546 10,753 348 
Net income (loss)$17,271 $21,648 $16,710 $(19,824)$11,712 $38,919 $9,737 
Earnings (loss) per common share
Basic$1.08 $1.35 $1.04 $(1.23)$0.73 $2.43 $0.60 
Diluted$1.08 $1.35 $1.04 $(1.23)$0.73 $2.43 $0.60 
Weighted average basic common shares outstanding15,987 15,991 16,074 16,099 16,094 15,989 16,118 
Weighted average diluted common shares outstanding16,012 16,021 16,092 16,099 16,100 16,016 16,125 
Dividends paid per common share$0.2250 $0.2250 $0.2200 $0.2200 $0.2200 $0.4500 $0.4400 








11






MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
FINANCIAL STATISTICS
As of or for the Three Months EndedAs of or for the Six Months Ended
June 30,March 31,June 30,June 30,June 30,
(Dollars in thousands, except per share amounts)20212021202020212020
Earnings:
Net interest income$38,505 $38,617 $38,712 $77,122 $76,118 
Noninterest income10,218 11,824 8,269 22,042 18,424 
     Total revenue, net of interest expense48,723 50,441 46,981 99,164 94,542 
Credit loss (benefit) expense(2,144)(4,734)4,685 (6,878)26,418 
Noninterest expense28,670 27,700 28,038 56,370 58,039 
     Income before income tax expense 22,197 27,475 14,258 49,672 10,085 
Income tax expense 4,926 5,827 2,546 10,753 348 
     Net income $17,271 $21,648 $11,712 $38,919 $9,737 
Per Share Data:
Diluted earnings $1.08 $1.35 $0.73 $2.43 $0.60 
Book value33.22 32.00 32.35 33.22 32.35 
Tangible book value(1)
27.90 26.60 24.74 27.90 24.74 
Ending Balance Sheet:
Total assets$5,749,215 $5,737,312 $5,230,963 $5,749,215 $5,230,963 
Loans held for investment, net of unearned income3,330,156 3,358,161 3,597,039 3,330,156 3,597,039 
Total securities held for investment2,072,452 1,896,894 1,187,455 2,072,452 1,187,455 
Total deposits4,792,666 4,794,563 4,265,435 4,792,666 4,265,435 
Short-term borrowings212,261 175,785 162,224 212,261 162,224 
Long-term debt169,839 201,696 189,973 169,839 189,973 
Total shareholders' equity530,293 511,320 520,781 530,293 520,781 
Average Balance Sheet:
Average total assets$5,851,736 $5,520,304 $5,098,847 $5,686,936 $4,884,285 
Average total loans3,396,575 3,429,746 3,633,695 3,413,069 3,534,979 
Average total deposits4,875,324 4,573,898 4,165,574 4,725,444 3,962,795 
Financial Ratios:
Return on average assets1.18 %1.59 %0.92 %1.38 %0.40 %
Return on average equity13.24 %17.01 %9.21 %15.10 %3.82 %
Return on average tangible equity(1)
16.75 %21.52 %13.50 %19.10 %6.48 %
Efficiency ratio(1)
54.83 %50.77 %54.80 %52.76 %56.24 %
Net interest margin, tax equivalent(1)
2.88 %3.10 %3.38 %2.99 %3.48 %
Loans to deposits ratio69.48 %70.04 %84.33 %69.48 %84.33 %
Common equity ratio9.22 %8.91 %9.96 %9.22 %9.96 %
Tangible common equity ratio(1)
7.86 %7.52 %7.80 %7.86 %7.80 %
Credit Risk Profile:
Total nonperforming loans$41,429 $44,382 $44,541 $41,429 $44,541 
Nonperforming loans ratio1.24 %1.32 %1.24 %1.24 %1.24 %
Total nonperforming assets$42,184 $45,869 $45,506 $42,184 $45,506 
Nonperforming assets ratio0.73 %0.80 %0.87 %0.73 %0.87 %
Net charge-offs$406 $316 $1,867 $722 $3,065 
Net charge-off ratio0.05 %0.04 %0.21 %0.04 %0.17 %
Allowance for credit losses$48,000 $50,650 $55,644 $48,000 $55,644 
Allowance for credit losses ratio1.44 %1.51 %1.55 %1.44 %1.55 %
Adjusted allowance for credit losses ratio(1)
1.53 %1.63 %1.70 %1.53 %1.70 %
PPP Loans:
Average PPP loans$233,982 $236,231 $257,664 $234,515 $66,075 
Fee Income(2)
2,469 3,674 1,054 6,143 1,054 
(1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
(2)The amount related to the first quarter of 2021 has been revised from previous disclosure.




12






MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
 Three Months Ended
 June 30, 2021March 31, 2021June 30, 2020
(Dollars in thousands)Average
Balance		Interest
Income/
Expense		 Average
Yield/
Cost		 
Average
Balance
Interest
Income/
Expense
 Average
Yield/
Cost		Average BalanceInterest
Income/
Expense		 Average
Yield/
Cost
ASSETS   
Loans, including fees (1)(2)(3)
$3,396,575 $35,255  4.16 % $3,429,746 $37,073 4.38 %$3,633,695 $40,721  4.51 %
Taxable investment securities1,604,463 6,483  1.62 % 1,266,714 5,093 1.63 %731,699 4,646  2.55 %
Tax-exempt investment securities (2)(4)
473,181 3,196  2.71 % 465,793 3,203 2.79 %285,758 2,340  3.29 %
Total securities held for investment(2)
2,077,644 9,679 1.87 %1,732,507 8,296 1.94 %1,017,457 6,986 2.76 %
Other48,208 19  0.16 % 36,536 14 0.16 %67,429 40  0.24 %
Total interest earning assets(2)
$5,522,427 44,953  3.26 % $5,198,789 45,383 3.54 %$4,718,581 47,747  4.07 %
Other assets329,309   321,515 380,266  
Total assets$5,851,736   $5,520,304 $5,098,847  
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Interest checking deposits$1,469,853 $1,095 0.30 %$1,349,671 $991 0.30 %$1,091,565 $1,113 0.41 %
Money market deposits942,072 502 0.21 %913,087 478 0.21 %829,826 885 0.43 %
Savings deposits595,150 324  0.22 % 553,824 286 0.21 %439,592 365  0.33 %
Time deposits896,169 1,488  0.67 % 837,460 1,853 0.90 %990,797 4,046  1.64 %
Total interest bearing deposits3,903,244 3,409  0.35 % 3,654,042 3,608 0.40 %3,351,780 6,409  0.77 %
Short-term borrowings218,491 161  0.30 % 175,193 128 0.30 %159,157 263  0.66 %
Long-term debt189,644 1,712  3.62 % 205,971 1,851 3.64 %201,240 1,374  2.75 %
Total borrowed funds408,135 1,873 1.84 %381,164 1,979 2.11 %360,397 1,637 1.83 %
Total interest bearing liabilities$4,311,379 $5,282  0.49 % $4,035,206 $5,587 0.56 %$3,712,177 $8,046  0.87 %
Noninterest bearing deposits972,080   919,856 813,794  
Other liabilities45,035   49,003 61,637  
Shareholders’ equity523,242 516,239 511,239 
Total liabilities and shareholders’ equity$5,851,736   $5,520,304 $5,098,847  
Net interest income(2)
$39,671 $39,796 $39,701 
Net interest spread(2)
 2.77 %  2.98 % 3.20 %
Net interest margin(2)
2.88 %3.10 %3.38 %
Total deposits(5)
$4,875,324 $3,409 0.28 %$4,573,898 $3,608 0.32 %$4,165,574 $6,409 0.62 %
Cost of funds(6)
0.40 %0.46 %0.72 %
(1) Average balance includes nonaccrual loans.
(2) Tax equivalent. The federal statutory tax rate utilized was 21%.
(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $2.3 million, $3.5 million, and $748 thousand for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively. Loan purchase discount accretion was $873 thousand, $1.1 million, and $2.6 million for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively. Tax equivalent adjustments were $519 thousand, $531 thousand, and $507 thousand for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $647 thousand, $648 thousand, and $482 thousand for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, respectively. The federal statutory tax rate utilized was 21%.
(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.











13






MIDWESTONE FINANCIAL GROUP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET AND YIELD ANALYSIS
 Six Months Ended
 June 30, 2021June 30, 2020
(Dollars in thousands)
Average
Balance
Interest
Income/
Expense
 
Average
Yield/
Cost
 
Average
Balance
Interest
Income/
Expense
 
Average
Yield/
Cost
ASSETS  
Loans, including fees (1)(2)(3)
$3,413,069 $72,328 4.27 %$3,534,979 $83,230 4.73 %
Taxable investment securities1,436,522 11,576 1.63 %648,678 8,363 2.59 %
Tax-exempt investment securities (2)(4)
469,507 6,399 2.75 %254,963 4,247 3.35 %
Total securities held for investment(2)
1,906,029 17,975 1.90 %903,641 12,610 2.81 %
Other42,404 33  0.16 % 62,304 204 0.66 %
Total interest earning assets(2)
$5,361,502 90,336  3.40 % $4,500,924 96,044 4.29 %
Other assets325,434   383,361 
Total assets$5,686,936   $4,884,285 
LIABILITIES AND SHAREHOLDERS’ EQUITY
  
Interest checking deposits$1,410,094 $2,086 0.30 %$1,028,321 $2,428 0.47 %
Money market deposits927,660 980 0.21 %798,296 2,530 0.64 %
Savings deposits574,602 610 0.21 %416,713 756 0.36 %
Time deposits866,976 3,341 0.78 %993,966 8,644 1.75 %
Total interest bearing deposits3,779,332 7,017  0.37 % 3,237,296 14,358 0.89 %
Short-term borrowings196,962 289  0.30 % 140,550 597 0.85 %
Long-term debt197,762 3,563  3.63 % 213,413 3,090 2.91 %
Total borrowed funds394,724 3,852 1.97 %353,963 3,687 2.09 %
Total interest bearing liabilities$4,174,056 $10,869  0.53 % $3,591,259 $18,045 1.01 %
Noninterest bearing deposits946,112   725,499 
Other liabilities47,008   54,323 
Shareholders’ equity519,760 513,204 
Total liabilities and shareholders’ equity$5,686,936   $4,884,285 
Net interest income(2)
$79,467 $77,999 
Net interest spread(2)
 2.87 %  3.28 %
Net interest margin(2)
2.99 %3.48 %
Total deposits(5)
$4,725,444 $7,017 0.30 %$3,962,795 $14,358 0.73 %
Cost of funds(6)
0.43 %0.84 %
(1) Average balance includes nonaccrual loans.
(2) Tax equivalent. The federal statutory tax rate utilized was 21%.
(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $5.8 million and $626 thousand for the six months ended June 30, 2021 and June 30, 2020, respectively. Loan purchase discount accretion was $2.0 million and $5.6 million for the six months ended June 30, 2021 and June 30, 2020, respectively. Tax equivalent adjustments were $1.0 million and $1.0 million for the six months ended June 30, 2021 and June 30, 2020, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $1.3 million and $0.9 million for the six months ended June 30, 2021 and June 30, 2020, respectively. The federal statutory tax rate utilized was 21%.
(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.
(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.


14






Non-GAAP Measures
This earnings release contains non-GAAP measures for tangible common equity, tangible book value per share, tangible common equity ratio, return on average tangible equity, net interest margin (tax equivalent), core net interest margin, loan yield (tax equivalent), core yield on loans, efficiency ratio, adjusted allowance for credit losses ratio, core loans, and core commercial loans. Management believes these measures provide investors with useful information regarding the Company’s profitability, financial condition and capital adequacy, consistent with how management evaluates the Company’s financial performance. The following tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP measure.
Tangible Common Equity/Tangible Book Value
per Share/Tangible Common Equity RatioJune 30,March 31,December 31,September 30,June 30,
(Dollars in thousands, except per share data)20212021202020202020
Total shareholders’ equity$530,293 $511,320 $515,250 $499,081 $520,781 
Intangible assets, net
(84,871)(86,212)(87,719)(89,288)(122,420)
Tangible common equity$445,422 $425,108 $427,531 $409,793 $398,361 
Total assets$5,749,215 $5,737,312 $5,556,648 $5,330,708 $5,230,963 
Intangible assets, net
(84,871)(86,212)(87,719)(89,288)(122,420)
Tangible assets$5,664,344 $5,651,100 $5,468,929 $5,241,420 $5,108,543 
Book value per share$33.22 $32.00 $32.17 $31.00 $32.35 
Tangible book value per share(1)
$27.90 $26.60 $26.69 $25.45 $24.74 
Shares outstanding15,963,468 15,981,088 16,016,780 16,099,324 16,099,324 
Common equity ratio9.22 %8.91 %9.27 %9.36 %9.96 %
Tangible common equity ratio(2)
7.86 %7.52 %7.82 %7.82 %7.80 %
(1) Tangible common equity divided by shares outstanding.
(2) Tangible common equity divided by tangible assets.
Three Months EndedSix Months Ended
Return on Average Tangible EquityJune 30,March 31,June 30,June 30,June 30,
(Dollars in thousands)20212021202020212020
Net income$17,271 $21,648 $11,712 $38,919 $9,737 
Intangible amortization, net of tax(1)
1,006 1,130 1,311 2,136 2,832 
Tangible net income $18,277 $22,778 $13,023 $41,055 $12,569 
Average shareholders’ equity$523,242 $516,239 $511,239 $519,760 $513,204 
Average intangible assets, net
(85,518)(86,961)(123,313)(86,235)(123,130)
Average tangible equity$437,724 $429,278 $387,926 $433,525 $390,074 
Return on average equity
13.24 %17.01 %9.21 %15.10 %3.82 %
Return on average tangible equity(2)
16.75 %21.52 %13.50 %19.10 %6.48 %
(1) The combined income tax rate utilized was 25%.
(2) Annualized tangible net income divided by average tangible equity.


15






Net Interest Margin, Tax Equivalent/
Core Net Interest Margin		Three Months EndedSix Months Ended
June 30,March 31,June 30,June 30,June 30,
(Dollars in thousands)20212021202020212020
Net interest income$38,505 $38,617 $38,712 $77,122 $76,118 
Tax equivalent adjustments:
Loans(1)
519 531 507 1,050 1,004 
Securities(1)
647 648 482 1,295 877 
Net interest income, tax equivalent$39,671 $39,796 $39,701 $79,467 $77,999 
Loan purchase discount accretion(873)(1,098)(2,610)(1,971)(5,633)
Core net interest income$38,798 $38,698 $37,091 $77,496 $72,366 
Net interest margin2.80 %3.01 %3.30 %2.90 %3.40 %
Net interest margin, tax equivalent(2)
2.88 %3.10 %3.38 %2.99 %3.48 %
Core net interest margin(3)
2.82 %3.02 %3.16 %2.91 %3.23 %
Average interest earning assets$5,522,427 $5,198,789 $4,718,581 $5,361,502 $4,500,924 
(1) The federal statutory tax rate utilized was 21%.
(2) Annualized tax equivalent net interest income divided by average interest earning assets.
(3) Annualized core net interest income divided by average interest earning assets.
Three Months EndedSix Months Ended
Loan Yield, Tax Equivalent / Core Yield on LoansJune 30,March 31,June 30,June 30,June 30,
(Dollars in thousands)20212021202020212020
Loan interest income, including fees$34,736 $36,542 $40,214 $71,278 $82,226 
Tax equivalent adjustment(1)
519 531 507 1,050 1,004 
Tax equivalent loan interest income$35,255 $37,073 $40,721 $72,328 $83,230 
Loan purchase discount accretion(873)(1,098)(2,610)(1,971)(5,633)
Core loan interest income$34,382 $35,975 $38,111 $70,357 $77,597 
Yield on loans4.10 %4.32 %4.45 %4.21 %4.68 %
Yield on loans, tax equivalent(2)
4.16 %4.38 %4.51 %4.27 %4.73 %
Core yield on loans(3)
4.06 %4.25 %4.22 %4.16 %4.41 %
Average loans$3,396,575 $3,429,746 $3,633,695 $3,413,069 $3,534,979 
(1) The federal statutory tax rate utilized was 21%.
(2) Annualized tax equivalent loan interest income divided by average loans.
(3) Annualized core loan interest income divided by average loans.
Three Months EndedSix Months Ended
Efficiency RatioJune 30,March 31,June 30,June 30,June 30,
(Dollars in thousands)20212021202020212020
Total noninterest expense$28,670 $27,700 $28,038 $56,370 $58,039 
Amortization of intangibles(1,341)(1,507)(1,748)(2,848)(3,776)
Merger-related expenses— — (7)— (61)
Noninterest expense used for efficiency ratio$27,329 $26,193 $26,283 $53,522 $54,202 
Net interest income, tax equivalent(1)
$39,671 $39,796 $39,701 $79,467 $77,999 
Noninterest income10,218 11,824 8,269 22,042 18,424 
Investment securities gains, net
(42)(27)(6)(69)(48)
Net revenues used for efficiency ratio$49,847 $51,593 $47,964 $101,440 $96,375 
Efficiency ratio (2)
54.83 %50.77 %54.80 %52.76 %56.24 %
(1) The federal statutory tax rate utilized was 21%.
(2) Noninterest expense adjusted for amortization of intangibles and merger-related expenses divided by the sum of tax equivalent net interest income, noninterest income and net investment securities gains.





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Adjusted Allowance for Credit Losses RatioJune 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20212021202020202020
Loans held for investment, net of unearned income$3,330,156 $3,358,161 $3,482,223 $3,537,432 $3,597,039 
PPP loans(184,390)(248,682)(259,260)(331,703)(327,648)
Core loans$3,145,766 $3,109,479 $3,222,963 $3,205,729 $3,269,391 
Allowance for credit losses$48,000 $50,650 $55,500 $58,500 $55,644 
Allowance for credit losses ratio1.44 %1.51 %1.59 %1.65 %1.55 %
Adjusted allowance for credit losses ratio(1)
1.53 %1.63 %1.72 %1.82 %1.70 %
(1) Allowance for credit losses divided by core loans.

Core Loans/Core Commercial LoansJune 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20212021202020202020
Commercial loans:
Commercial and industrial$982,092 $993,770 $1,055,488 $1,103,102 $1,084,527 
Agricultural107,834 117,099 116,392 129,453 140,837 
Commercial real estate1,705,789 1,693,592 1,732,361 1,707,035 1,764,739 
Total commercial loans$2,795,715 $2,804,461 $2,904,241 $2,939,590 $2,990,103 
Consumer loans:
Residential real estate$468,581 $474,433 $499,106 $521,570 $532,914 
Other consumer65,860 79,267 78,876 76,272 74,022 
Total consumer loans$534,441 $553,700 $577,982 $597,842 $606,936 
Loans held for investment, net of unearned income$3,330,156 $3,358,161 $3,482,223 $3,537,432 $3,597,039 
PPP loans$184,390 $248,682 $259,260 $331,703 $327,648 
Core loans(1)
$3,145,766 $3,109,479 $3,222,963 $3,205,729 $3,269,391 
Core commercial loans(2)
$2,611,325 $2,555,779 $2,644,981 $2,607,887 $2,662,455 
(1) Core loans are calculated as loans held for investment, net of unearned income less PPP loans.
(2) Core commercial loans are calculated as total commercial loans less PPP loans.



Contact:
Charles N. FunkBarry S. Ray
Chief Executive OfficerSenior Executive Vice President and Chief Financial Officer
319.356.5800319.356.5800





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MidWestOne Financial Group, Inc. Reports