2020 MidWestOne Financial Group, Inc. Annual Report

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (dollars in thousands, except per share amounts)

CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share amounts)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

RETAINED EARNINGS

YEARS ENDED DECEMBER 31,

TREASURY STOCK

PAID-IN CAPITAL

COMMON STOCK

2020

2019

2018

ADDITIONAL

TOTAL

INTEREST INCOME

Loans, including fees Taxable securities

$158,656

$163,163

$111,193

Balance, December 31, 2017

$12,463

$187,486

$148,078

$(5,121)

$(2,602) $340,304

17,610

13,132

11,027

Tax-exempt investment securities

8,259

5,696

5,827

Cumulative effect of changes in accounting principle 1

- - - - - - - -

- - -

57

- - -

(57)

-

Other

262

450

62

Net income

30,351

-

30,351

Total interest income

184,787

182,441

128,109

Other comprehensive loss

- - - - -

(3,002)

(3,002)

Stock options exercised (9,700 shares)

(68)

204 547

- - - - -

136 (88)

INTEREST EXPENSE Deposits

Release/lapse of restriction on RSUs (29,715 shares) Repurchase of common stock (76,128 shares)

(635)

23,919

29,927

17,331

Short-term borrowings

914

1,847 7,017

1,315 4,195

-

(2,129)

(2,129)

Long-term debt

6,990

Share-based compensation

1,030

- -

1,030

Total interest expense Net interest income

31,823 152,964

38,791 143,650

22,841 105,268

Dividends paid on common stock ($0.78 per share)

-

(9,535)

(9,535)

Balance, December 31, 2018

$12,463

$187,813

$168,951

$(6,499)

$(5,661) $357,067

Credit loss expense

28,369

7,158

7,300

Net interest income after credit loss expense

124,595

136,492

97,968

Net income

- -

- -

43,630

- -

-

43,630 10,033

Other comprehensive income

-

10,033

NONINTEREST INCOME

Issuance of common stock for acquisition of ATBancorp (4,117,536 shares), net of offering expenses of $323 and liquidity discount of $2,355 Release/lapse of restriction on RSUs (31,354 shares) Repurchase of common stock (166,729 shares)

Investment services and trust activities

9,632 6,178 5,719

8,040 7,452 5,594 3,789 1,877

4,953 6,157 4,223 3,622 1,610 1,284

Service charges and fees

4,118

109,236

- - - -

-

113,354

Card revenue Loan revenue

- - - -

(815)

712

- - - -

(103)

10,185

-

(4,679)

(4,679)

Bank-owned life insurance Insurance commissions Investment securities gains, net

2,226

Share-based compensation

1,156

- -

1,156

-

734

Dividends paid on common stock ($0.81 per share)

-

(11,476) $201,105

(11,476)

184

90

193

Balance, December 31, 2019

$16,581

$297,390

$(10,466)

$4,372 $508,982

Other

4,496

3,670

1,173

Total noninterest income

38,620

31,246

23,215

Cumulative effect of changes in accounting principle 2

- - - - - - - -

- - -

(5,362)

- - - -

- -

(5,362)

Net income

6,623

6,623

Other comprehensive income Acquisition fair value finalization 3

- - - - -

20,220

20,220

NONINTEREST EXPENSE

2,355

- - - - -

2,355 (149)

Compensation and employee benefits Occupancy expense of premises, net

66,397

65,660

49,758

Release/lapse of restriction on RSUs (34,032 shares) Repurchase of common stock (179,428 shares)

(988)

839

9,348 7,865 6,153 5,362 3,815 6,976 1,858 1,746

8,647 7,717 8,049 4,579 3,789 5,906

7,597 5,565 4,641 2,951 2,660 2,296 1,533 1,353

-

(4,624)

(4,624)

Equipment

Share-based compensation

1,380

- -

1,380

Legal and professional

Dividends paid on common stock ($0.88 per share)

-

(14,175) $188,191

(14,175)

Data processing

Balance, December 31, 2020

$16,581

$300,137

$(14,251)

$24,592

$515,250

Marketing

Amortization of intangibles

(1) Reclassification due to adoption of ASU 2016-01, Financial Instruments - Overall, Recognition and Measurement of Financial Assets and Financial Liabilities . (2) Reclassification pursuant to adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . See Note 1. Nature of Business and Significant Accounting Policies for additional information. (3) Relates to the finalization of the purchase accounting adjustments for the ATBancorp acquisition. This purchase accounting adjustment had a $2.06 million impact on goodwill, $296 thousand impact on deferred income taxes, with the offsetting impact being to additional paid-in capital. See Note 7. Goodwill and Other Intangible Assets for additional information.

FDIC insurance Communications

690

1,701

Foreclosed assets, net Goodwill impairment

150

580

21

31,500

-

-

SHARE PRICE

Other expenses

8,723

10,217

4,840

Total noninterest expense

149,893 13,322

117,535 50,203

83,215 37,968

CASH DIVIDEND

CASH DIVIDEND

Income before income tax expense

2018

2020

HIGH $ 34.99 $ 34.75 $ 35.20 $ 34.83 HIGH $ 32.05 $ 29.54 $ 31.58 $ 37.05

LOW DECLARED

HIGH $ 35.88 $ 22.71 $ 21.24 $ 25.47

LOW DECLARED

Income tax expense

6,699

6,573

7,617

First Quarter Second Quarter Third Quarter Fourth Quarter

$ 30.70 $ 31.94 $ 31.92 $ 23.80

$ 0.195 $ 0.195 $ 0.195

First Quarter Second Quarter Third Quarter Fourth Quarter

$ 16.57 $ 16.20 $ 16.80 $ 17.78

$0.2200 $0.2200 $0.2200 $0.2200

Net income

$6,623

$43,630

$30,351

$ 0.195 CASH DIVIDEND

EARNINGS PER COMMON SHARE Basic

$0.41 $0.41

$2.93 $2.93

$2.48 $2.48

Diluted

2019

LOW DECLARED

First Quarter Second Quarter Third Quarter Fourth Quarter

$ 25.13 $ 26.02 $ 27.19 $ 29.06

$0.2025 $0.2025 $0.2025 $0.2025

12 MidWest One Financial Group, Inc. 2020 Annual Report

MidWest One Financial Group, Inc. 2020 Annual Report 13