MidWestOne(MOFG) - 2021 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2021, was $21,648 thousand, compared to a net loss of $1,975 thousand for the same period in 2020, indicating a significant turnaround[14]. - Consolidated net income for Q1 2021 was $21.6 million, an increase of $23.6 million from a net loss of $2.0 million in Q1 2020[163]. - Basic and diluted earnings per share for Q1 2021 were $1.35 compared to a loss of $0.12 per share in Q1 2020[163]. - Annualized return on average shareholders' equity was 17.01% for Q1 2021, compared to (1.54)% in Q1 2020[165]. - The effective income tax rate for Q1 2021 was 21.2%, compared to (52.7)% in Q1 2020, with an expected full-year rate of 20-22%[181]. Asset and Deposit Growth - Total assets increased to $5,737,312 thousand as of March 31, 2021, up from $5,556,648 thousand at December 31, 2020, representing a growth of 3.25%[11]. - Total deposits rose to $4,794,563 thousand as of March 31, 2021, an increase of 5.45% from $4,547,049 thousand at December 31, 2020[11]. - Total deposits increased by $247,469,000 in Q1 2021, compared to an increase of $131,094,000 in Q1 2020, reflecting a growth of approximately 88% year-over-year[21]. - As of March 31, 2021, total long-term debt amounted to $44.8 million, with a weighted average interest rate of 1.99%[109]. Income and Expense Analysis - Net interest income after credit loss expense was $43,351 thousand for Q1 2021, compared to $15,673 thousand in Q1 2020, reflecting a substantial improvement[14]. - Noninterest income for the three months ended March 31, 2021, was $11,824 thousand, up from $10,155 thousand in the same period of 2020, showing a growth of 16.5%[14]. - Total noninterest expense decreased to $27,700 thousand in Q1 2021 from $30,001 thousand in Q1 2020, a reduction of 7.67%[14]. - Noninterest expense decreased by $2.3 million, or 7.7%, primarily due to reductions in 'Other' noninterest expense, legal and professional expenses, and amortization of intangibles[163]. Credit Quality and Losses - The allowance for credit losses decreased to $50,650 thousand as of March 31, 2021, down from $55,500 thousand at December 31, 2020, indicating improved credit quality[11]. - The company reported a decrease in credit loss expense of $4,734,000 in Q1 2021, compared to an expense of $21,733,000 in Q1 2020, indicating improved asset quality[21]. - The total allowance for credit losses (ACL) as of March 31, 2021, was $50.7 million, representing 1.51% of loans held for investment, a decrease from 1.59% ($55.5 million) as of December 31, 2020[198]. - The company recorded a credit loss benefit of $4.5 million for the three months ended March 31, 2021, compared to a credit loss expense of $19.3 million for the same period in 2020[199]. Loan Portfolio and Modifications - The total loans held for investment, net of unearned income, was $3,358.2 million as of March 31, 2021, a decrease from $3,482.2 million at December 31, 2020[49]. - The Company modified 43 loans totaling $16.7 million due to COVID-19, down from 76 loans totaling $44.1 million as of December 31, 2020[156]. - The total amount of commercial and industrial loans in 2021 was $993,770,000, a decrease from $1,175,644,000 in 2020, reflecting a decline of approximately 15.4%[62]. - The total amount of agricultural loans in 2021 was $117,099,000, compared to $51,726,000 in 2020, indicating an increase of approximately 126.5%[62]. Economic Outlook - The economic forecast predicts a slight increase in Midwest unemployment in the next quarter, followed by decreases in the subsequent three quarters, suggesting a cautious outlook[68]. - The national unemployment rate decreased from 6.7% in December 2020 to 6.0% in March 2021, but remains elevated compared to pre-pandemic levels of 3.5%[146]. - The Company anticipates a decline in the volume of PPP loan originations after March 31, 2021 compared to the first quarter of 2021[157]. - The Federal Reserve's monetary policy actions significantly increased the country's money supply, influencing overall credit distribution and interest rates[161]. Shareholder Returns - The company paid dividends of $0.2250 per share in Q1 2021, slightly up from $0.2200 per share in Q1 2020[14]. - The Company declared a cash dividend of $0.2250 per share on April 29, 2021, payable on June 15, 2021[134]. - The Company repurchased 1,890 shares of common stock for a total cost of $55.5 thousand, leaving $2.6 million available under the share repurchase program[135].