MidWestOne Financial Group, Inc. Reports Financial Results for the Fourth Quarter and Full Year of 2024

IOWA CITY, Iowa, Jan. 23, 2025 (GLOBE NEWSWIRE) -- MidWestOne Financial Group, Inc. (Nasdaq: MOFG) ("we”, "our”, or the "Company”) today reported results for the fourth quarter and full year of 2024.

Fourth Quarter 2024 Summary¹

• Net income of $16.3 million, or $0.78 per diluted common share.
  • Return on average assets of 1.03%.
  • Net interest margin (tax equivalent) was 3.43%;² Core net interest margin expanded 85 bps to 3.26%.²
  • Efficiency ratio improved to 59.06%² from 70.32%² in the linked quarter.
• Noninterest bearing deposits and core deposits increased 3.7% and 2.3%, respectively.
• Classified loan ratio improved 54 bps to 2.57%; nonperforming assets ratio remained stable at 0.40%; net charge-off ratio was 0.06%.
• Common equity tier 1 ("CET1") ratio improved 82 bps to 10.73%.

Full Year 2024 Summary¹

• Noninterest bearing deposits and core deposits increased 6.1% and 3.9%, respectively. 
• Investment services and trust activities revenue increased 15.9% to $14.2 million.
• CET1 ratio improved 114 bps to 10.73%.
• Classified loan ratio improved 150 bps to 2.57%; nonperforming assets ratio improved 7 bps to 0.40%; net charge-off ratio was 0.07%.
• Completed a common equity capital raise, resulting in net proceeds to the Company of $118.6 million to facilitate a balance sheet repositioning.

CEO Commentary

Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, "We are pleased with our fourth quarter results which highlight the successful execution of our balance sheet repositioning, as well as the continued momentum of our strategic initiatives. Return on average assets eclipsed the 1.0% threshold, driven by significant expansion of our net interest margin, thus net interest income. Our core deposit franchise expanded, with noninterest bearing deposits increasing for the second consecutive quarter, reflecting our Treasury Management initiatives and strong branch network. Our Wealth Management focus, including our Investment Services and Private Wealth teams, continues to bear fruit as revenue increased 16% year-over-year. In addition, asset quality metrics improved from the third quarter, as the classified loans ratio improved 54 bps and the charge-off ratio was only 0.06%."

Mr. Reeves continued, "2024 was an outstanding year of transformation and execution for MidWestOne. As we enter 2025, we are well positioned to become a consistent, high performing organization for the benefit of our stakeholders.” 

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_{¹ Fourth Quarter Summary compares to the third quarter of 2024 (the "linked quarter") unless noted. Full Year 2024 Summary compares to the full year 2023 unless noted.}

_{² Non-GAAP measure. See the separate Non-GAAP Measures section for a reconciliation to the most directly comparable GAAP measure.}

REVENUE REVIEW

Total revenue for the fourth quarter of 2024 increased $152.6 million from the third quarter of 2024 and increased $23.4 million compared to the fourth quarter of 2023, due to higher net interest income and higher noninterest income. Excluding the pre-tax securities loss of $140.4 million that was recorded in the third quarter of 2024 in connection with balance sheet repositioning efforts, total revenue increased $12.3 million from the linked quarter. 

Net interest income of $48.9 million for the fourth quarter of 2024 increased $11.4 million from the third quarter of 2024, due to higher earning asset yields and lower funding volumes and costs, partially offset by lower earning asset volumes. When compared to the fourth quarter of 2023, net interest income increased $16.4 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 3.43%³ in the fourth quarter of 2024, compared to 2.51%³ in the third quarter of 2024, driven by higher earning asset yields and lower funding costs. Total earning assets yield during the fourth quarter of 2024 increased 60 bps from the third quarter of 2024 due primarily to an increase of 171 bps in total investment securities yields. Funding costs during the fourth quarter of 2024 decreased 35 bps to 2.52%, due to reductions of 43 bps, 23 bps and 17 bps in long-term debt, short-term borrowings and interest bearing deposit costs, to 6.48%, 4.53% and  2.41%, respectively, from the third quarter of 2024.

The Company's tax equivalent net interest margin was 3.43%³ in the fourth quarter of 2024, compared to 2.22%³ in the fourth quarter of 2023, driven by higher earning asset yields and lower funding costs. Total earning assets yield increased 106 bps from the fourth quarter of 2023, primarily due to increases of 172 bps and 52 bps in total investment securities and loan yields, respectively. Funding costs decreased 13 bps to 2.52%, due to short-term borrowing costs of 4.53% and long-term debt costs of 6.48%, which decreased 38 bps and 31 bps, respectively, from the fourth quarter of 2023.

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