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MidWestOne Financial Group, Inc. Reports Financial Results for the Second Quarter of 2025

IOWA CITY, Iowa, July 24, 2025 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) ("we," "our," or the "Company") today reported results for the second quarter of 2025.

Second Quarter 2025 Summary1

  • Pre-tax, pre-provision net revenue increased 15% to $24.5 million2.
    • Net interest margin (tax equivalent) was 3.57%2; core net interest margin expanded 13 basis points ("bps") to 3.49%.2
    • Noninterest income was $10.2 million.
    • Noninterest expense was $35.8 million.
    • Efficiency ratio improved to 56.20%2 from 59.38%2.
  • Net income of $10.0 million, or $0.48 per diluted common share, reflected credit loss expense of $11.9 million stemming primarily from a single commercial real estate ("CRE") office credit.
  • Criticized loans ratio improved 32 bps to 5.15%.
  • Allowance for credit losses ratio increased to 1.50%, due primarily to the single CRE office credit.
  • Annualized loan growth of 7.4%.
  • Tangible book value per share of $23.92,2 an increase of 2.4%.
  • Common equity tier 1 ("CET1") capital ratio improved 5 bps to 11.02%.
  • Provided notice of redemption for all $65.0 million aggregate principal of the Company's 5.75% fixed-to-floating rate subordinated notes due 2030 set to reprice on July 30th.

CEO Commentary

Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, "Due to the expertise of our MidWestOne team, we continued to execute well on our 2025 strategic initiatives. Strong loan growth and back book loan re-pricing led to tax equivalent net interest margin expansion of 13 basis points, to 3.57%2, and to 5% linked quarter net interest income growth. Investments in our relationship fee income businesses continue to bear fruit with wealth management, Small Business Administration ("SBA"), and residential mortgage revenues up quarter over quarter.

We maintained our expense discipline even as we added significant customer facing talent in Denver and the Twin Cities, as well as invested in our platforms to drive internal efficiencies and improve the customer experience.

Earnings and certain asset quality measures were unfavorably impacted by a single $24 million suburban Twin Cities CRE office credit. The loan was originated in June 2022 and previously classified, but moved to nonaccrual in the second quarter. A receiver is in place, resolution efforts have begun, and a specific reserve was established, which led to an increase in our allowance for credit losses ratio to 1.50%.

Our balance sheet, capital, and underlying earnings strength position us well for the second half of 2025 as we continue to make significant progress in building a high-performing, relationship-driven community bank.”

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1 Second Quarter Summary compares to the first quarter of 2025 (the "linked quarter") unless noted.
2 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.


(Dollars in thousands, except per share amounts and as noted)
  As of or for the quarter ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
    2025       2025       2024       2025       2024  
Financial Results                    
Revenue   $ 60,231     $ 57,575     $ 57,901     $ 117,806     $ 102,382  
Credit loss expense     11,889       1,687       1,267       13,576       5,956  
Noninterest expense     35,767       36,293       35,761       72,060       71,326  
Net income     9,980       15,138       15,819       25,118       19,088  
Pre-tax pre-provision net revenue(3)     24,464       21,282       22,140       45,746       31,056  
Adjusted earnings(3)     10,176       15,301       8,132       25,479       12,621  
Per Common Share                    
Diluted earnings per share   $ 0.48     $ 0.73     $ 1.00     $ 1.20     $ 1.21  
Adjusted earnings per share(3)     0.49       0.73       0.52       1.22       0.80  
Book value     28.36       27.85       34.44       28.36       34.44  
Tangible book value(3)     23.92       23.36       28.27       23.92       28.27  
Balance Sheet & Credit Quality                    
Loans In millions   $ 4,381.2     $ 4,304.2     $ 4,287.2     $ 4,381.2     $ 4,287.2  
Investment securities In millions     1,235.0       1,305.5       1,824.1       1,235.0       1,824.1  
Deposits In millions     5,388.1       5,489.1       5,412.4       5,388.1       5,412.4  
Net loan charge-offs In millions     0.2       3.1       0.5       3.3       0.7  
Allowance for credit losses ratio     1.50 %     1.25 %     1.26 %     1.50 %     1.26 %
Selected Ratios                    
Return on average assets     0.65 %     1.00 %     0.95 %     0.82 %     0.58 %
Net interest margin, tax equivalent(3)     3.57 %     3.44 %     2.41 %     3.51 %     2.37 %
Return on average equity     6.81 %     10.74 %     11.91 %     8.74 %     7.23 %
Return on average tangible equity(3)     8.84 %     13.75 %     15.74 %     11.24 %     9.98 %
Efficiency ratio(3)     56.20 %     59.38 %     56.29 %     57.75 %     62.83 %


REVENUE REVIEW

Revenue

              Change   Change
              2Q25 vs   2Q25 vs
(Dollars in thousands)   2Q25   1Q25   2Q24   1Q25   2Q24
Net interest income   $ 49,982   $ 47,439   $ 36,347   5 %   38 %
Noninterest income     10,249     10,136     21,554   1 %   (52)%
Total revenue, net of interest expense   $ 60,231   $ 57,575   $ 57,901   5 %   4 %


Total revenue for the second quarter of 2025 increased $2.7 million from the first quarter of 2025 due to higher net interest income and noninterest income during the quarter. When compared to the second quarter of 2024, total revenue increased $2.3 million due to higher net interest income partially offset by lower noninterest income.

Net interest income of $50.0 million for the second quarter of 2025 increased $2.5 million from the first quarter of 2025 due to higher earning asset volumes and yields and lower funding costs, partially offset by higher funding volumes. When compared to the second quarter of 2024, net interest income increased $13.6 million due to higher earning asset yields and lower funding volumes and costs, partially offset by lower earning asset volumes.

The Company's tax equivalent net interest margin was 3.57%3 in the second quarter of 2025, compared to 3.44%3 in the first quarter of 2025, driven by higher earning asset yields and lower interest bearing liability costs. Total earning asset yield increased 12 bps from the first quarter of 2025, primarily due to an increase of 10 bps in loan yield. Interest bearing liability costs during the second quarter of 2025 decreased 2 bps to 2.39%, primarily due to reductions in long-term debt costs and interest bearing deposits of 13 bps and 2 bps, to 6.28% and 2.29%, respectively, from the first quarter of 2025.

The Company's tax equivalent net interest margin was 3.57%3 in the second quarter of 2025, compared to 2.41%3 in the second quarter of 2024, driven by higher earning asset yields and lower interest bearing liability costs. Total earning assets yield increased 75 bps from the second quarter of 2024, primarily due to increases of 189 bps and 12 bps in total investment securities and loan yields, respectively. Interest bearing liability costs decreased 46 bps to 2.39%, due to long-term debt costs of 6.28% and interest bearing deposit costs of 2.29%, which decreased 67 bps, and 25 bps, respectively, from the second quarter of 2024.

__________________
3 Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.

Noninterest Income

            Change   Change
            2Q25 vs   2Q25 vs
(Dollars in thousands) 2Q25   1Q25   2Q24   1Q25   2Q24
Investment services and trust activities $ 3,705     $ 3,544     $ 3,504   5 %   6 %
Service charges and fees   2,190       2,131       2,156   3 %   2 %
Card revenue   1,934       1,744       1,907   11 %   1 %
Loan revenue   1,417       1,194       1,525   19 %   (7)%
Bank-owned life insurance   677       1,057       668   (36)%   1 %
Investment securities gains, net         33       33   (100)%   (100)%
Other   326       433       11,761   (25)%   (97)%
Total noninterest income $ 10,249     $ 10,136     $ 21,554   1 %   (52)%
                   
MSR adjustment (included above in Loan revenue) $ (264 )   $ (213 )   $ 129   24 %   (305)%


Noninterest income for the second quarter of 2025 increased $0.1 million from the linked quarter, primarily due to increases of $0.2 million each in loan revenue, card revenue, and investment services and trust activities revenue. The increase in loan revenue was due primarily to a $0.2 million increase in mortgage origination fee revenue, coupled with an increase of $0.2 million in SBA gain on sale revenue. The increase in card revenue was driven primarily by higher interchange fee income. The increase in investment services and trust activities revenue was driven by higher assets under administration. Partially offsetting these increases was a decline of $0.4 million in bank-owned life insurance revenue stemming from the death benefit recognized in the first quarter of 2025.

Noninterest income for the second quarter of 2025 decreased $11.3 million from the second quarter of 2024 primarily due to the decline in other revenue stemming from the $11.1 million gain realized in connection with the sale of our Florida banking operations in the second quarter of 2024. Also contributing to the decline in noninterest income was a $0.4 million unfavorable change in the fair value of our mortgage servicing rights, which is included in loan revenue, and a decline of $0.4 million in swap origination fee income, which is recorded in other revenue. Partially offsetting these declines was an increase of $0.2 million in investment services and trust activities revenue, driven by higher assets under administration.

EXPENSE REVIEW

Noninterest Expense

            Change   Change
            2Q25 vs   2Q25 vs
(Dollars in thousands) 2Q25   1Q25   2Q24   1Q25   2Q24
Compensation and employee benefits $ 21,011   $ 21,212   $ 20,985   (1)%   %
Occupancy expense of premises, net   2,540     2,588     2,435   (2)%   4 %
Equipment   2,550     2,426     2,530   5 %   1 %
Legal and professional   2,153     2,226     2,253   (3)%   (4)%
Data processing   1,486     1,698     1,645   (12)%   (10)%
Marketing   762     552     636   38 %   20 %
Amortization of intangibles   1,252     1,408     1,593   (11)%   (21)%
FDIC insurance   851     917     1,051   (7)%   (19)%
Communications   161     159     191   1 %   (16)%
Foreclosed assets, net   83     74     138   12 %   (40)%
Other   2,918     3,033     2,304   (4)%   27 %
Total noninterest expense $ 35,767   $ 36,293   $ 35,761   (1)%   %


Merger-related Expenses

         
         
(Dollars in thousands) 2Q25   1Q25   2Q24
Compensation and employee benefits $   $   $ 73
Equipment           28
Legal and professional       40     462
Data processing           251
Communications           8
Other           32
Total merger-related expenses $   $ 40   $ 854


Noninterest expense for the second quarter of 2025 decreased $0.5 million from the linked quarter, primarily due to decreases of $0.2 million each in data processing, compensation and employee benefits, and amortization of intangibles. The decrease in data processing was primarily driven by a decrease in core banking system costs. The decrease in compensation and employee benefits reflected the receipt of $1.1 million from Employee Retention Credit claims, which was partially offset by higher wage, equity compensation and employee benefits expense.

Noninterest expense for the second quarter of 2025 compared to the prior year was stable at $35.8 million. The $0.6 million increase in other noninterest expense stemmed primarily from customer deposits costs. Further, excluding merger-related expenses, legal and professional costs increased $0.4 million due primarily to higher litigation-related legal expenses. Those increases were partially offset by lower intangible amortization and FDIC insurance costs, which decreased $0.3 million and $0.2 million, respectively.

The Company's effective tax rate was 20.6% in the second quarter of 2025, compared to 22.7% in the linked quarter. The effective income tax rate for the full year 2025 is expected to be 22-23%.

BALANCE SHEET REVIEW

Total assets were $6.16 billion at June 30, 2025, compared to $6.25 billion at March 31, 2025 and $6.58 billion at June 30, 2024. The decrease from March 31, 2025 was primarily due to lower cash and security volumes, partially offset by higher loan volumes. Compared to June 30, 2024, the decrease was primarily driven by lower security volumes, partially offset by higher loan volumes.

Loans Held for Investment

(Dollars in thousands)

June 30, 2025   March 31, 2025   June 30, 2024  
Balance
  % of Total
  Balance
  % of Total
  Balance
  % of Total
 
Commercial and industrial $ 1,226,265   28.0 % $ 1,140,138   26.5 % $ 1,120,983   26.1 %
Agricultural   128,717   2.9     131,409   3.1     107,983   2.5  
Commercial real estate                        
Construction and development   280,918   6.4     293,280   6.8     351,646   8.2  
Farmland   186,494   4.3     180,633   4.2     183,641   4.3  
Multifamily   438,193   10.0     421,204   9.8     430,054   10.0  
Other   1,407,469   32.1     1,425,062   33.0     1,348,515   31.5  
Total commercial real estate   2,313,074   52.8     2,320,179   53.8     2,313,856   54.0  
Residential real estate                        
One-to-four family first liens   467,970   10.7     471,688   11.0     492,541   11.5  
One-to-four family junior liens   188,671   4.3     182,346   4.2     176,105   4.1  
Total residential real estate   656,641   15.0     654,034   15.2     668,646   15.6  
Consumer   56,491   1.3     58,424   1.4     75,764   1.8  
Loans held for investment, net of unearned income $ 4,381,188   100.0 % $ 4,304,184   100.0 % $ 4,287,232   100.0 %
                         
Total commitments to extend credit $ 1,074,935       $ 1,080,300       $ 1,200,605      


Loans held for investment, net of unearned income at June 30, 2025 were $4.38 billion, increasing $77.0 million, or 1.8%, from $4.30 billion at March 31, 2025 and increasing $94.0 million, or 2.2%, from $4.29 billion at June 30, 2024. The increases across both periods were primarily driven by organic loan growth and higher line of credit usage.

Investment Securities

(Dollars in thousands)
June 30, 2025   March 31, 2025   June 30, 2024  
Balance   % of Total   Balance   % of Total   Balance   % of Total  
Available for sale $ 1,235,045   100.0 % $ 1,305,530   100.0 % $ 771,034   42.3 %
Held to maturity     %     %   1,053,080   57.7 %
Total investment securities $ 1,235,045       $ 1,305,530       $ 1,824,114      


Investment securities at June 30, 2025 were $1.24 billion, decreasing $70.5 million from March 31, 2025 and decreasing $589.1 million from June 30, 2024. The decrease from the first quarter of 2025 was primarily due to principal cash flows received from scheduled payments, calls, and maturities. The decrease from the second quarter of 2024 stemmed primarily from the sale of debt securities in connection with a balance sheet repositioning, as well as principal cash flows received from scheduled payments, calls, and maturities.

Deposits June 30, 2025   March 31, 2025   June 30, 2024  
(Dollars in thousands) Balance   % of Total   Balance   % of Total   Balance   % of Total  
Noninterest bearing deposits $ 910,693   16.9 % $ 903,714   16.5 % $ 882,472   16.3 %
Interest checking deposits   1,206,096   22.5     1,283,328   23.3     1,284,243   23.7  
Money market deposits   971,048   18.0     1,002,066   18.3     1,043,376   19.3  
Savings deposits   851,636   15.8     877,348   16.0     745,639   13.8  
Time deposits of $250 and under   837,302   15.5     818,012   14.9     803,301   14.8  
Total core deposits   4,776,775   88.7     4,884,468   89.0     4,759,031   87.9  
Brokered time deposits   200,000   3.7     200,000   3.6     196,000   3.6  
Time deposits over $250   411,323   7.6     404,674   7.4     457,388   8.5  
Total deposits $ 5,388,098   100.0 % $ 5,489,142   100.0 % $ 5,412,419   100.0 %


Total deposits at June 30, 2025 were $5.39 billion, decreasing $101.0 million, or 1.8%, from $5.49 billion at March 31, 2025, and decreasing $24.3 million, or 0.4%, from $5.41 billion at June 30, 2024. Noninterest bearing deposits at June 30, 2025 were $910.7 million, an increase of $7.0 million from March 31, 2025 and an increase of $28.2 million from June 30, 2024.

Borrowed Funds June 30, 2025   March 31, 2025   June 30, 2024  
(Dollars in thousands) Balance   % of Total   Balance   % of Total   Balance   % of Total  
Short-term borrowings $   % $ 1,482   1.3 % $ 414,684   78.3 %
Long-term debt   112,320   100.0 %   111,398   98.7 %   114,839   21.7 %
Total borrowed funds $ 112,320       $ 112,880       $ 529,523      


Borrowed funds were $112.3 million at June 30, 2025, a decrease of $0.6 million from March 31, 2025 and a decrease of $417.2 million from June 30, 2024. The decrease compared to the linked quarter was due primarily to lower securities sold under agreements to repurchase. The decrease compared to June 30, 2024 was primarily due to the pay-off of $405.0 million of BTFP borrowings and scheduled payments on long-term debt.

In June 2025, the Company provided notice to the trustee of its intent to redeem all $65.0 million aggregate principal of its 5.75% fixed-to-floating rate subordinated notes due 2030. To complete the redemption, the Company expects to utilize a combination of cash on hand and proceeds from a $50.0 million senior term note. The senior term note is expected to be structured as a 5-year maturity, 7-year amortization facility, and bear interest at a floating rate of 1-month term SOFR plus 1.75%. The financing pursuant to the senior note is expected to close on July 29, 2025, and the redemption is expected to occur on July 30, 2025.

Capital June 30,   March 31,   June 30,
(Dollars in thousands) 2025 (1)     2025       2024  
Total shareholders' equity $ 589,040     $ 579,625     $ 543,286  
Accumulated other comprehensive loss   (57,557 )     (63,098 )     (58,135 )
MidWestOne Financial Group, Inc. Consolidated          
Tier 1 leverage to average assets ratio   9.62 %     9.50 %     8.29 %
Common equity tier 1 capital to risk-weighted assets ratio   11.02 %     10.97 %     9.56 %
Tier 1 capital to risk-weighted assets ratio   11.88 %     11.84 %     10.35 %
Total capital to risk-weighted assets ratio   14.44 %     14.34 %     12.62 %
MidWestOne Bank          
Tier 1 leverage to average assets ratio   10.43 %     10.42 %     9.24 %
Common equity tier 1 capital to risk-weighted assets ratio   12.95 %     13.02 %     11.55 %
Tier 1 capital to risk-weighted assets ratio   12.95 %     13.02 %     11.55 %
Total capital to risk-weighted assets ratio   14.20 %     14.21 %     12.61 %
(1) Regulatory capital ratios for June 30, 2025 are preliminary          


Total shareholders' equity at June 30, 2025 increased $9.4 million from March 31, 2025, driven primarily by a decrease in accumulated other comprehensive loss and an increase in retained earnings, partially offset by an increase in treasury stock. Total shareholders' equity at June 30, 2025 increased $45.8 million from June 30, 2024, primarily due to increases in common stock and additional paid-in-capital stemming from the common equity capital raise in the third quarter of 2024, and partially offset by a decrease in retained earnings.

On July 22, 2025, the Board of Directors of the Company declared a cash dividend of $0.2425 per common share. The dividend is payable September 16, 2025, to shareholders of record at the close of business on September 2, 2025.

The current share repurchase program allows for the repurchase of up to $15.0 million of the Company's common shares. Under such program, the Company repurchased 63,402 shares of its common stock at an average price of $27.65 per share and a total cost of $1.8 million during the period March 31, 2025 through June 30, 2025. No shares were repurchased during the subsequent period through July 24, 2025. As of June 30, 2025, $13.2 million remained available under this program.

CREDIT QUALITY REVIEW

Credit Quality

As of or For the Three Months Ended
June 30,   March 31,   June 30,
(Dollars in thousands)   2025       2025       2024  
Credit loss expense related to loans $ 12,089     $ 1,787     $ 467  
Net charge-offs   189       3,087       524  
Allowance for credit losses   65,800       53,900       53,900  
Pass $ 4,155,385     $ 4,068,707     $ 3,991,692  
Special Mention   98,998       121,494       146,253  
Classified   126,805       113,983       149,287  
Criticized   225,803       235,477       295,540  
Loans greater than 30 days past due and accruing $ 12,161     $ 6,119     $ 9,358  
Nonperforming loans $ 37,192     $ 17,470     $ 25,128  
Nonperforming assets   40,606       20,889       31,181  
Net charge-off ratio(1)   0.02 %     0.29 %     0.05 %
Classified loans ratio(2)   2.89 %     2.65 %     3.48 %
Criticized loans ratio(3)   5.15 %     5.47 %     6.89 %
Nonperforming loans ratio(4)   0.85 %     0.41 %     0.59 %
Nonperforming assets ratio(5)   0.66 %     0.33 %     0.47 %
Allowance for credit losses ratio(6)   1.50 %     1.25 %     1.26 %
Allowance for credit losses to nonaccrual loans ratio(7)   179.19 %     309.47 %     218.26 %
(1) Net charge-off ratio is calculated as annualized net charge-offs divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, 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) Criticized loans ratio is calculated as criticized loans divided by loans held for investment, net of unearned income, at the end of the period.
(4) Nonperforming loans ratio is calculated as nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period.
(5) Nonperforming assets ratio is calculated as nonperforming assets divided by total assets at the end of the period.
(6) 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.
(7) Allowance for credit losses to nonaccrual loans ratio is calculated as allowance for credit losses divided by nonaccrual loans at the end of the period.


Compared to the linked quarter, both nonperforming loans and nonperforming assets increased $19.7 million, primarily due to a single $24.0 million CRE office credit, partially offset by the sale of a $3.9 million CRE office credit. Special mention loan balances decreased $22.5 million, or 19%, while classified loan balances increased $12.8 million, or 11%. Compared to the prior year period, nonperforming loans and nonperforming assets increased $12.1 million and $9.4 million, respectively. Special mention loan balances decreased $47.3 million, or 32%, while classified loan balances decreased $22.5 million, or 15%. The net charge-off ratio declined 27 bps from the linked quarter and 3 bps from the same period in the prior year.

As of June 30, 2025, the allowance for credit losses was $65.8 million and the allowance for credit losses ratio was 1.50%, compared with $53.9 million and 1.25%, respectively, at March 31, 2025. Credit loss expense of $11.9 million in the second quarter of 2025 primarily reflected the specific reserve established in connection with the single CRE office credit previously discussed.

Nonperforming Loans Roll Forward
(Dollars in thousands)
Nonaccrual
  90+ Days Past Due & Still Accruing
  Total
Balance at March 31, 2025 $ 17,417     $ 53     $ 17,470  
Loans placed on nonaccrual or 90+ days past due & still accruing   25,279       569       25,848  
Proceeds related to repayment or sale   (4,973 )           (4,973 )
Loans returned to accrual status or no longer past due   (632 )           (632 )
Charge-offs   (187 )     (151 )     (338 )
Transfers to foreclosed assets   (183 )           (183 )
Balance at June 30, 2025 $ 36,721     $ 471     $ 37,192  


CONFERENCE CALL DETAILS

The Company will host a conference call for investors at 11:00 a.m. CT on Friday, July 25, 2025. To participate, you may pre-register for this call utilizing the following link: https://www.netroadshow.com/events/login?show=a6070726&confId=80381. After pre-registering for this event you will receive your access details via email. On the day of the call, you are also able to dial 1-833-470-1428 using an access code of 293794 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until October 23, 2025 by calling 1-866-813-9403 and using the replay access code of 763204. 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.

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, 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”.

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) the effects of changes in interest rates, including on our net income and the value of our securities portfolio; (2) fluctuations in the value of our investment securities; (3) effects on the U.S. economy resulting from the implementation of proposed policies and executive orders, including the imposition of tariffs, changes in immigration policy, changes to regulatory or other governmental agencies, DEI and ESG initiative trends, changes in consumer protection policies, changes in foreign policy and tax regulations; (4) volatility of rate-sensitive deposits; (5) asset/liability matching risks and liquidity risks; (6) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company’s cost of funds; (7) the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; (8) credit quality deterioration, pronounced and sustained reduction in real estate market values, or other uncertainties, including the impact of inflationary pressures and future monetary policies of the Federal Reserve in response thereto on economic conditions and our business, resulting in an increase in the allowance for credit losses, an increase in the credit loss expense, and a reduction in net earnings; (9) the sufficiency of the allowance for credit losses to absorb the amount of expected losses inherent in our existing loan portfolio; (10) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (11) credit risks and risks from concentrations (by type of borrower, collateral, geographic area and by industry) within our loan portfolio; (12) 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; (13) governmental monetary and fiscal policies; (14) new or revised general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business, including the risk of a recession; (15) the imposition of domestic or foreign tariffs or other governmental policies impacting the global supply chain and value of the agricultural or other products of our borrowers; (16) war or terrorist activities, including ongoing conflicts in the Middle East and the Russian invasion of Ukraine, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (17) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators, and including changes in interpretation or prioritization of such laws and regulations; (18) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (19) 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; (20) changes in the business and economic conditions generally and in the financial services industry, and the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in prior bank failures; (21) the occurrence of fraudulent activity, breaches, or failures of our or our third party vendors' information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; (22) the ability to attract and retain key executives and employees experienced in banking and financial services; (23) our ability to adapt successfully to technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequence to us and our customers, including the development and implementation of tools incorporating artificial intelligence; (24) operational risks, including data processing system failures and fraud; (25) the costs, effects and outcomes of existing or future litigation or other legal proceedings and regulatory actions; (26) the risks of mergers or branch sales (including the sale of our Florida banking operations and the acquisition of Denver Bankshares, Inc.), 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; (27) the economic impacts on the Company and its customers of climate change, natural disasters and exceptional weather occurrences, such as: tornadoes, floods and blizzards; and (28) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.


MIDWEST
ONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED BALANCE SHEETS

  June 30,   March 31,   December 31,   September 30,   June 30,
(Dollars in thousands)   2025       2025       2024       2024       2024  
ASSETS                  
Cash and due from banks $ 78,696     $ 68,545     $ 71,803     $ 72,173     $ 66,228  
Interest earning deposits in banks   90,749       182,360       133,092       129,695       35,340  
Total cash and cash equivalents   169,445       250,905       204,895       201,868       101,568  
Debt securities available for sale at fair value   1,235,045       1,305,530       1,328,433       1,623,104       771,034  
Held to maturity securities at amortized cost                           1,053,080  
Total securities   1,235,045       1,305,530       1,328,433       1,623,104       1,824,114  
Loans held for sale   16,812       13,836       749       3,283       2,850  
Gross loans held for investment   4,391,426       4,315,546       4,328,413       4,344,559       4,304,619  
Unearned income, net   (10,238 )     (11,362 )     (12,786 )     (15,803 )     (17,387 )
Loans held for investment, net of unearned income   4,381,188       4,304,184       4,315,627       4,328,756       4,287,232  
Allowance for credit losses   (65,800 )     (53,900 )     (55,200 )     (54,000 )     (53,900 )
Total loans held for investment, net   4,315,388       4,250,284       4,260,427       4,274,756       4,233,332  
Premises and equipment, net   89,910       90,031       90,851       90,750       91,793  
Goodwill   69,788       69,788       69,788       69,788       69,388  
Other intangible assets, net   22,359       23,611       25,019       26,469       27,939  
Foreclosed assets, net   3,414       3,419       3,337       3,583       6,053  
Other assets   238,612       246,990       252,830       258,881       224,621  
Total assets $ 6,160,773     $ 6,254,394     $ 6,236,329     $ 6,552,482     $ 6,581,658  
LIABILITIES                   
Noninterest bearing deposits $ 910,693     $ 903,714     $ 951,423     $ 917,715     $ 882,472  
Interest bearing deposits   4,477,405       4,585,428       4,526,559       4,451,012       4,529,947  
Total deposits   5,388,098       5,489,142       5,477,982       5,368,727       5,412,419  
Short-term borrowings         1,482       3,186       410,630       414,684  
Long-term debt   112,320       111,398       113,376       115,051       114,839  
Other liabilities   71,315       72,747       82,089       95,836       96,430  
Total liabilities   5,571,733       5,674,769       5,676,633       5,990,244       6,038,372  
SHAREHOLDERS' EQUITY                   
Common stock   21,580       21,580       21,580       21,580       16,581  
Additional paid-in capital   414,485       414,258       414,987       414,965       300,831  
Retained earnings   232,718       227,790       217,776       206,490       306,030  
Treasury stock   (22,186 )     (20,905 )     (21,885 )     (21,955 )     (22,021 )
Accumulated other comprehensive loss   (57,557 )     (63,098 )     (72,762 )     (58,842 )     (58,135 )
Total shareholders' equity   589,040       579,625       559,696       562,238       543,286  
Total liabilities and shareholders' equity $ 6,160,773     $ 6,254,394     $ 6,236,329     $ 6,552,482     $ 6,581,658  


MIDWEST
ONE FINANCIAL GROUP, INC.
FIVE QUARTER CONSOLIDATED STATEMENTS OF INCOME

  Three Months Ended   Six Months Ended
(Dollars in thousands, except per share data) June 30,   March 31,   December 31,   September 30,   June 30,   June 30,   June 30,
  2025     2025     2024     2024       2024     2025     2024
Interest income                          
Loans, including fees $ 62,276   $ 59,462   $ 62,458   $ 62,521     $ 61,643   $ 121,738   $ 119,590
Taxable investment securities   12,928     13,327     11,320     8,779       9,228     26,255     18,688
Tax-exempt investment securities   699     703     728     1,611       1,663     1,402     3,373
Other   1,517     1,247     3,761     785       242     2,764     660
Total interest income   77,420     74,739     78,267     73,696       72,776     152,159     142,311
Interest expense                          
Deposits   25,665     25,484     27,324     29,117       28,942     51,149     56,668
Short-term borrowings   19     25     115     5,043       5,409     44     10,384
Long-term debt   1,754     1,791     1,890     2,015       2,078     3,545     4,181
Total interest expense   27,438     27,300     29,329     36,175       36,429     54,738     71,233
Net interest income   49,982     47,439     48,938     37,521       36,347     97,421     71,078
Credit loss expense   11,889     1,687     1,291     1,535       1,267     13,576     5,956
Net interest income after credit loss expense   38,093     45,752     47,647     35,986       35,080     83,845     65,122
Noninterest income                          
Investment services and trust activities   3,705     3,544     3,779     3,410       3,504     7,249     7,007
Service charges and fees   2,190     2,131     2,159     2,170       2,156     4,321     4,300
Card revenue   1,934     1,744     1,833     1,935       1,907     3,678     3,850
Loan revenue   1,417     1,194     1,841     760       1,525     2,611     2,381
Bank-owned life insurance   677     1,057     719     879       668     1,734     1,328
Investment securities gains (losses), net       33     161     (140,182 )     33     33     69
Other   326     433     345     640       11,761     759     12,369
Total noninterest income (loss)   10,249     10,136     10,837     (130,388 )     21,554     20,385     31,304
Noninterest expense                          
Compensation and employee benefits   21,011     21,212     20,684     19,943       20,985     42,223     41,915
Occupancy expense of premises, net   2,540     2,588     2,772     2,443       2,435     5,128     5,248
Equipment   2,550     2,426     2,688     2,486       2,530     4,976     5,130
Legal and professional   2,153     2,226     2,534     2,261       2,253     4,379     4,312
Data processing   1,486     1,698     1,719     1,580       1,645     3,184     3,005
Marketing   762     552     793     619       636     1,314     1,234
Amortization of intangibles   1,252     1,408     1,449     1,470       1,593     2,660     3,230
FDIC insurance   851     917     980     923       1,051     1,768     1,993
Communications   161     159     154     159       191     320     387
Foreclosed assets, net   83     74     56     330       138     157     496
Other   2,918     3,033     3,543     3,584       2,304     5,951     4,376
Total noninterest expense   35,767     36,293     37,372     35,798       35,761     72,060     71,326
Income (loss) before income tax expense (benefit)   12,575     19,595     21,112     (130,200 )     20,873     32,170     25,100
Income tax expense (benefit)   2,595     4,457     4,782     (34,493 )     5,054     7,052     6,012
Net income (loss) $ 9,980   $ 15,138   $ 16,330   $ (95,707 )   $ 15,819   $ 25,118   $ 19,088
                           
Earnings (loss) per common share                          
Basic $ 0.48   $ 0.73   $ 0.79   $ (6.05 )   $ 1.00   $ 1.21   $ 1.21
Diluted $ 0.48   $ 0.73   $ 0.78   $ (6.05 )   $ 1.00   $ 1.20   $ 1.21
Weighted average basic common shares outstanding   20,816     20,797     20,776     15,829       15,763     20,807     15,743
Weighted average diluted common shares outstanding   20,843     20,849     20,851     15,829       15,781     20,846     15,775
Dividends paid per common share $ 0.2425   $ 0.2425   $ 0.2425   $ 0.2425     $ 0.2425   $ 0.4850   $ 0.4850


MIDWEST
ONE FINANCIAL GROUP, INC.
FINANCIAL STATISTICS

  As of or for the Three Months Ended   As of or for the Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
(Dollars in thousands, except per share amounts)   2025       2025       2024       2025       2024  
Earnings:                  
Net interest income $ 49,982     $ 47,439     $ 36,347     $ 97,421     $ 71,078  
Noninterest income   10,249       10,136       21,554       20,385       31,304  
Total revenue, net of interest expense   60,231       57,575       57,901       117,806       102,382  
Credit loss expense   11,889       1,687       1,267       13,576       5,956  
Noninterest expense   35,767       36,293       35,761       72,060       71,326  
Income before income tax expense   12,575       19,595       20,873       32,170       25,100  
Income tax expense   2,595       4,457       5,054       7,052       6,012  
Net income $ 9,980     $ 15,138     $ 15,819     $ 25,118     $ 19,088  
Pre-tax pre-provision net revenue(1) $ 24,464     $ 21,282     $ 22,140     $ 45,746     $ 31,056  
Adjusted earnings(1)   10,176       15,301       8,132       25,479       12,621  
Per Share Data:                  
Diluted earnings $ 0.48     $ 0.73     $ 1.00     $ 1.20     $ 1.21  
Adjusted earnings(1)   0.49       0.73       0.52       1.22       0.80  
Book value   28.36       27.85       34.44       28.36       34.44  
Tangible book value(1)   23.92       23.36       28.27       23.92       28.27  
Ending Balance Sheet:                  
Total assets $ 6,160,773     $ 6,254,394     $ 6,581,658     $ 6,160,773     $ 6,581,658  
Loans held for investment, net of unearned income   4,381,188       4,304,184       4,287,232       4,381,188       4,287,232  
Total securities   1,235,045       1,305,530       1,824,114       1,235,045       1,824,114  
Total deposits   5,388,098       5,489,142       5,412,419       5,388,098       5,412,419  
Short-term borrowings         1,482       414,684             414,684  
Long-term debt   112,320       111,398       114,839       112,320       114,839  
Total shareholders' equity   589,040       579,625       543,286       589,040       543,286  
Average Balance Sheet:                  
Average total assets $ 6,172,649     $ 6,168,546     $ 6,713,573     $ 6,170,609     $ 6,674,476  
Average total loans   4,370,196       4,290,710       4,419,697       4,330,659       4,358,957  
Average total deposits   5,398,916       5,398,819       5,514,924       5,398,868       5,498,020  
Financial Ratios:                  
Return on average assets   0.65 %     1.00 %     0.95 %     0.82 %     0.58 %
Return on average equity   6.81 %     10.74 %     11.91 %     8.74 %     7.23 %
Return on average tangible equity(1)   8.84 %     13.75 %     15.74 %     11.24 %     9.98 %
Efficiency ratio(1)   56.20 %     59.38 %     56.29 %     57.75 %     62.83 %
Net interest margin, tax equivalent(1)   3.57 %     3.44 %     2.41 %     3.51 %     2.37 %
Loans to deposits ratio   81.31 %     78.41 %     79.21 %     81.31 %     79.21 %
CET1 Ratio   11.02 %     10.97 %     9.56 %     11.02 %     9.56 %
Common equity ratio   9.56 %     9.27 %     8.25 %     9.56 %     8.25 %
Tangible common equity ratio(1)   8.19 %     7.89 %     6.88 %     8.19 %     6.88 %
Credit Risk Profile:                  
Total nonperforming loans $ 37,192     $ 17,470     $ 25,128     $ 37,192     $ 25,128  
Nonperforming loans ratio   0.85 %     0.41 %     0.59 %     0.85 %     0.59 %
Total nonperforming assets $ 40,606     $ 20,889     $ 31,181     $ 40,606     $ 31,181  
Nonperforming assets ratio   0.66 %     0.33 %     0.47 %     0.66 %     0.47 %
Net charge-offs $ 189     $ 3,087     $ 524     $ 3,276     $ 713  
Net charge-off ratio   0.02 %     0.29 %     0.05 %     0.15 %     0.03 %
Allowance for credit losses $ 65,800     $ 53,900     $ 53,900     $ 65,800     $ 53,900  
Allowance for credit losses ratio   1.50 %     1.25 %     1.26 %     1.50 %     1.26 %
Allowance for credit losses to nonaccrual ratio   179.19 %     309.47 %     218.26 %     179.19 %     218.26 %
                   
(1) Non-GAAP measure. See the Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.
 

MIDWESTONE FINANCIAL GROUP, INC.
AVERAGE BALANCE SHEET AND YIELD ANALYSIS

  Three Months Ended
  June 30, 2025   March 31, 2025   June 30, 2024
(Dollars in thousands) Average
Balance
  Interest
Income/
Expense
  Average
Yield/
Cost
  Average
Balance
  Interest
Income/
Expense
  Average
Yield/
Cost
  Average Balance   Interest
Income/
Expense
  Average
Yield/
Cost
ASSETS                                  
Loans, including fees (1)(2)(3) $ 4,370,196   $ 63,298   5.81 %   $ 4,290,710   $ 60,443   5.71 %   $ 4,419,697   $ 62,581   5.69 %
Taxable investment securities   1,168,048     12,928   4.44 %     1,207,844     13,327   4.47 %     1,520,253     9,228   2.44 %
Tax-exempt investment securities (2)(4)   102,792     859   3.35 %     105,563     865   3.32 %     322,092     2,040   2.55 %
Total securities held for investment(2)   1,270,840     13,787   4.35 %     1,313,407     14,192   4.38 %     1,842,345     11,268   2.46 %
Other   104,628     1,517   5.82 %     124,133     1,247   4.07 %     20,452     242   4.76 %
Total interest earning assets(2) $ 5,745,664   $ 78,602   5.49 %   $ 5,728,250   $ 75,882   5.37 %   $ 6,282,494   $ 74,091   4.74 %
Other assets   426,985             440,296             431,079        
Total assets $ 6,172,649           $ 6,168,546           $ 6,713,573        
LIABILITIES AND SHAREHOLDERS’ EQUITY                                  
Interest checking deposits $ 1,221,266   $ 2,101   0.69 %   $ 1,240,586   $ 2,127   0.70 %   $ 1,297,356   $ 3,145   0.97 %
Money market deposits   986,029     6,057   2.46 %     1,002,743     6,333   2.56 %     1,072,688     7,821   2.93 %
Savings deposits   843,223     3,161   1.50 %     835,731     3,057   1.48 %     738,773     2,673   1.46 %
Time deposits   1,436,301     14,346   4.01 %     1,397,595     13,967   4.05 %     1,470,956     15,303   4.18 %
Total interest bearing deposits   4,486,819     25,665   2.29 %     4,476,655     25,484   2.31 %     4,579,773     28,942   2.54 %
Securities sold under agreements to repurchase   896     1   0.45 %     2,705     5   0.75 %     5,300     10   0.76 %
Other short-term borrowings       18   %         20   %     442,546     5,399   4.91 %
Total short-term borrowings   896     19   8.51 %     2,705     25   3.75 %     447,846     5,409   4.86 %
Long-term debt   112,035     1,754   6.28 %     113,364     1,791   6.41 %     120,256     2,078   6.95 %
Total borrowed funds   112,931     1,773   6.30 %     116,069     1,816   6.35 %     568,102     7,487   5.30 %
Total interest bearing liabilities $ 4,599,750   $ 27,438   2.39 %   $ 4,592,724   $ 27,300   2.41 %   $ 5,147,875   $ 36,429   2.85 %
Noninterest bearing deposits   912,097             922,164             935,151        
Other liabilities   73,094             82,280             96,553        
Shareholders’ equity   587,708             571,378             533,994        
Total liabilities and shareholders’ equity $ 6,172,649           $ 6,168,546           $ 6,713,573        
Net interest income(2)     $ 51,164           $ 48,582           $ 37,662    
Net interest spread(2)         3.10 %           2.96 %           1.89 %
Net interest margin(2)         3.57 %           3.44 %           2.41 %
                                   
Total deposits(5) $ 5,398,916   $ 25,665   1.91 %   $ 5,398,819   $ 25,484   1.91 %   $ 5,514,924   $ 28,942   2.11 %
Cost of funds(6)         2.00 %           2.01 %           2.41 %
                                         
(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 $272 thousand, $256 thousand, and $337 thousand for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, respectively. Loan purchase discount accretion was $1.1 million, $1.2 million, and $1.3 million for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, respectively. Tax equivalent adjustments were $1.0 million, $981 thousand, and $938 thousand for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $160 thousand, $162 thousand, and $377 thousand for the three months ended June 30, 2025, March 31, 2025, and June 30, 2024, 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.
     


MIDWEST
ONE FINANCIAL GROUP, INC.
AVERAGE BALANCE SHEET AND YIELD ANALYSIS

  Six Months Ended
  June 30, 2025   June 30, 2024
(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) $ 4,330,659   $ 123,741   5.76 %   $ 4,358,957   $ 121,448   5.60 %
Taxable investment securities   1,187,836     26,255   4.46 %     1,538,928     18,688   2.44 %
Tax-exempt investment securities (2)(4)   104,170     1,724   3.34 %     325,414     4,137   2.56 %
Total securities held for investment(2)   1,292,006     27,979   4.37 %     1,864,342     22,825   2.46 %
Other   114,327     2,764   4.88 %     25,529     660   5.20 %
Total interest earning assets(2) $ 5,736,992   $ 154,484   5.43 %   $ 6,248,828   $ 144,933   4.66 %
Other assets   433,617             425,648        
Total assets $ 6,170,609           $ 6,674,476        
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
Interest checking deposits $ 1,230,873   $ 4,228   0.69 %   $ 1,299,413   $ 6,035   0.93 %
Money market deposits   994,340     12,390   2.51 %     1,087,616     15,886   2.94 %
Savings deposits   839,498     6,218   1.49 %     716,458     4,720   1.32 %
Time deposits   1,417,054     28,313   4.03 %     1,458,969     30,027   4.14 %
Total interest bearing deposits   4,481,765     51,149   2.30 %     4,562,456     56,668   2.50 %
Securities sold under agreements to repurchase   1,795     6   0.67 %     5,315     21   0.79 %
Other short-term borrowings       38   %     426,036     10,363   4.89 %
Total short-term borrowings   1,795     44   4.94 %     431,351     10,384   4.84 %
Long-term debt   112,696     3,545   6.34 %     121,761     4,181   6.91 %
Total borrowed funds   114,491     3,589   6.32 %     553,112     14,565   5.30 %
Total interest bearing liabilities $ 4,596,256   $ 54,738   2.40 %   $ 5,115,568   $ 71,233   2.80 %
Noninterest bearing deposits   917,103             935,564        
Other liabilities   77,662             92,581        
Shareholders’ equity   579,588             530,763        
Total liabilities and shareholders’ equity $ 6,170,609           $ 6,674,476        
Net interest income(2)     $ 99,746           $ 73,700    
Net interest spread(2)         3.03 %           1.86 %
Net interest margin(2)         3.51 %           2.37 %
                       
Total deposits(5) $ 5,398,868   $ 51,149   1.91 %   $ 5,498,020   $ 56,668   2.07 %
Cost of funds(6)         2.00 %           2.37 %
                           
(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 $528 thousand and $574 thousand for the six months ended June 30, 2025 and June 30, 2024, respectively. Loan purchase discount accretion was $2.3 million and $2.4 million for the six months ended June 30, 2025 and June 30, 2024, respectively. Tax equivalent adjustments were $2.0 million and $1.9 million for the six months ended June 30, 2025 and June 30, 2024, respectively. The federal statutory tax rate utilized was 21%.
(4) Interest income includes tax equivalent adjustments of $0.3 million and $0.8 million for the six months ended June 30, 2025 and June 30, 2024, 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.
 


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 earnings and adjusted earnings per share, and pre-tax pre-provision net revenue. 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 Ratio   June 30,   March 31,   December 31,   September 30,   June 30,
(Dollars in thousands, except per share data)     2025       2025       2024       2024       2024  
Total shareholders’ equity   $ 589,040     $ 579,625     $ 559,696     $ 562,238     $ 543,286  
Intangible assets, net     (92,147 )     (93,399 )     (94,807 )     (96,257 )     (97,327 )
Tangible common equity   $ 496,893     $ 486,226     $ 464,889     $ 465,981     $ 445,959  
                     
Total assets   $ 6,160,773     $ 6,254,394     $ 6,236,329     $ 6,552,482     $ 6,581,658  
Intangible assets, net     (92,147 )     (93,399 )     (94,807 )     (96,257 )     (97,327 )
Tangible assets   $ 6,068,626     $ 6,160,995     $ 6,141,522     $ 6,456,225     $ 6,484,331  
                     
Book value per share   $ 28.36     $ 27.85     $ 26.94     $ 27.06     $ 34.44  
Tangible book value per share(1)   $ 23.92     $ 23.36     $ 22.37     $ 22.43     $ 28.27  
Shares outstanding     20,769,577       20,815,715       20,777,485       20,774,919       15,773,468  
                     
Common equity ratio     9.56 %     9.27 %     8.97 %     8.58 %     8.25 %
Tangible common equity ratio(2)     8.19 %     7.89 %     7.57 %     7.22 %     6.88 %
   
(1) Tangible common equity divided by shares outstanding.
(2) Tangible common equity divided by tangible assets.
 
   


    Three Months Ended   Six Months Ended
Return on Average Tangible Equity   June 30,   March 31,   June 30,   June 30,   June 30,
(Dollars in thousands)     2025       2025       2024       2025       2024  
Net income   $ 9,980     $ 15,138     $ 15,819     $ 25,118     $ 19,088  
Intangible amortization, net of tax(1)     931       1,047       1,195       1,978       2,423  
Tangible net income   $ 10,911     $ 16,185     $ 17,014     $ 27,096     $ 21,511  
                     
Average shareholders’ equity   $ 587,708     $ 571,378     $ 533,994     $ 579,588     $ 530,763  
Average intangible assets, net     (92,733 )     (94,169 )     (99,309 )     (93,447 )     (97,302 )
Average tangible equity   $ 494,975     $ 477,209     $ 434,685     $ 486,141     $ 433,461  
                     
Return on average equity     6.81 %     10.74 %     11.91 %     8.74 %     7.23 %
Return on average tangible equity(2)     8.84 %     13.75 %     15.74 %     11.24 %     9.98 %
   
(1) The income tax rate utilized was the blended marginal tax rate.
(2) Annualized tangible net income divided by average tangible equity.

 


Net Interest Margin, Tax Equivalent/
Core Net Interest Margin

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
(Dollars in thousands)     2025       2025       2024       2025       2024  
Net interest income   $ 49,982     $ 47,439     $ 36,347     $ 97,421     $ 71,078  
Tax equivalent adjustments:                    
Loans(1)     1,022       981       938       2,003       1,858  
Securities(1)     160       162       377       322       764  
Net interest income, tax equivalent   $ 51,164     $ 48,582     $ 37,662     $ 99,746     $ 73,700  
Loan purchase discount accretion     (1,142 )     (1,166 )     (1,261 )     (2,308 )     (2,413 )
Core net interest income   $ 50,022     $ 47,416     $ 36,401     $ 97,438     $ 71,287  
                     
Net interest margin     3.49 %     3.36 %     2.33 %     3.42 %     2.29 %
Net interest margin, tax equivalent(2)     3.57 %     3.44 %     2.41 %     3.51 %     2.37 %
Core net interest margin(3)     3.49 %     3.36 %     2.33 %     3.42 %     2.29 %
Average interest earning assets   $ 5,745,664     $ 5,728,250     $ 6,282,494     $ 5,736,992     $ 6,248,828  
   
(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 Ended   Six Months Ended
Loan Yield, Tax Equivalent / Core Yield on Loans   June 30,   March 31,   June 30,   June 30,   June 30,
(Dollars in thousands)     2025       2025       2024       2025       2024  
Loan interest income, including fees     $ 62,276     $ 59,462     $ 61,643     $ 121,738     $ 119,590  
Tax equivalent adjustment(1)       1,022       981       938       2,003       1,858  
Tax equivalent loan interest income     $ 63,298     $ 60,443     $ 62,581     $ 123,741     $ 121,448  
Loan purchase discount accretion       (1,142 )     (1,166 )     (1,261 )     (2,308 )     (2,413 )
Core loan interest income     $ 62,156     $ 59,277     $ 61,320     $ 121,433     $ 119,035  
                       
Yield on loans       5.72 %     5.62 %     5.61 %     5.67 %     5.52 %
Yield on loans, tax equivalent(2)       5.81 %     5.71 %     5.69 %     5.76 %     5.60 %
Core yield on loans(3)       5.70 %     5.60 %     5.58 %     5.65 %     5.49 %
Average loans     $ 4,370,196     $ 4,290,710     $ 4,419,697     $ 4,330,659     $ 4,358,957  
   
(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 Ended   Six Months Ended
Efficiency Ratio   June 30,   March 31,   June 30,   June 30,   June 30,
(Dollars in thousands)     2025       2025       2024       2025       2024  
Total noninterest expense     $ 35,767     $ 36,293     $ 35,761     $ 72,060     $ 71,326  
Amortization of intangibles       (1,252 )     (1,408 )     (1,593 )     (2,660 )     (3,230 )
Merger-related expenses             (40 )     (854 )     (40 )     (2,168 )
Noninterest expense used for efficiency ratio     $ 34,515     $ 34,845     $ 33,314     $ 69,360     $ 65,928  
                       
Net interest income, tax equivalent(1)     $ 51,164     $ 48,582     $ 37,662     $ 99,746     $ 73,700  
Plus: Noninterest income       10,249       10,136       21,554       20,385       31,304  
Less: Investment securities gains, net             33       33       33       69  
Net revenues used for efficiency ratio     $ 61,413     $ 58,685     $ 59,183     $ 120,098     $ 104,935  
                       
Efficiency ratio (2)       56.20 %     59.38 %     56.29 %     57.75 %     62.83 %
   
(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.

 


    Three Months Ended   Six Months Ended
Adjusted Earnings   June 30,   March 31,   June 30,   June 30,   June 30,
(Dollars in thousands, except per share data)     2025       2025       2024     2025       2024  
Net income   $ 9,980     $ 15,138     $ 15,819   $ 25,118     $ 19,088  
Less: Investment securities gains, net of tax(1)           25       24     24       51  
Less: Mortgage servicing rights (loss) gain, net of tax(1)     (196 )     (158 )     96     (355 )     (177 )
Plus: Merger-related expenses, net of tax(1)           30       634     30       1,608  
Less: Gain on branch sale, net of tax(1)                 8,201           8,201  
Adjusted earnings   $ 10,176     $ 15,301     $ 8,132   $ 25,479     $ 12,621  
                     
Weighted average diluted common shares outstanding     20,843       20,849       15,781     20,846       15,775  
                     
Earnings per common share - diluted   $ 0.48     $ 0.73     $ 1.00   $ 1.20     $ 1.21  
Adjusted earnings per common share(2)   $ 0.49     $ 0.73     $ 0.52   $ 1.22     $ 0.80  
   
(1) The income tax rate utilized was the blended marginal tax rate.
(2) Adjusted earnings divided by weighted average diluted common shares outstanding.

 


    For the Three Months Ended   Year Ended
Pre-tax Pre-provision Net Revenue   June 30,   March 31,   June 30,   June 30,   June 30,
(Dollars in thousands)   2025       2025       2024       2025       2024  
Net interest income   $ 49,982     $ 47,439     $ 36,347     $ 97,421     $ 71,078  
Noninterest income     10,249       10,136       21,554       20,385       31,304  
Noninterest expense     (35,767 )     (36,293 )     (35,761 )     (72,060 )     (71,326 )
Pre-tax Pre-provision Net Revenue   $ 24,464     $ 21,282     $ 22,140     $ 45,746     $ 31,056  


Category: Earnings
This news release may be downloaded from Corporate Profile | MidWestOne Financial Group, Inc.

Source: MidWestOne Financial Group, Inc.

Industry: Banks

Contacts:  
Charles N. Reeves   Barry S. Ray
Chief Executive Officer  Chief Financial Officer
319.356.5800  319.356.5800

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