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."
__________________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.
MIDWESTONE FINANCIAL GROUP, INC. FIVE QUARTER CONSOLIDATED BALANCE SHEETS
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