Mid­we­st­one Fi­nan­cial re­ports 3Q earn­ings

The Pak Banker - - Front Page -

IOWA CITY, IOWA

Mid­We­st­One Fi­nan­cial to­day re­ported re­sults for its three and nine months ended Septem­ber 30, 2012. Net in­come for the third quar­ter of 2012 rose to $4.5 mil­lion, com­pared with $3.8 mil­lion for the same pe­riod last year.

Net in­come avail­able to com­mon share­hold­ers for the third quar­ter of 2012 rose to $4.5 mil­lion, or $0.52 per di­luted share, com­pared with net in­come avail­able to com­mon share­hold­ers of $3.6 mil­lion, or $0.42 per di­luted share, for the third quar­ter of 2011.

Net in­come for the third quar­ter of 2012 was higher than the same pe­riod in 2011 pri­mar­ily due to a 10.6% in­crease in net in­ter­est in­come; and a 23.3% de­crease in the pro­vi­sion for loan losses; par­tially off­set by a de­crease of 8.5% in non­in­ter­est in­come. Net in­come for the first nine months of 2012 was $12.4 mil­lion, a $2.4 mil­lion, or 24.4%, in­crease com­pared to $10.0 mil­lion of net in­come for the same pe­riod of 2011. Earn­ings per di­luted share of $1.45 and $1.08 for the com­par­a­tive year-to-date pe­ri­ods are based on net in­come avail­able to com­mon share­hold­ers of $12.4 mil­lion and $9.3 mil­lion, re­spec­tively. The in­crease in net in­come was pri­mar­ily the re­sult of higher net in­ter­est in­come af­ter pro­vi­sion for loan loss ex­pense and in­creased non­in­ter­est in­come, mainly due to the gain on the sale of the Com­pany's Home Mort­gage Cen­ter lo­ca­tion re­al­ized in the sec­ond quar­ter of 2012. These in­creases were par­tially off­set by a $6.1 mil­lion loss on the ter­mi­na­tion of the Com­pany's pen­sion plan, which was also rec­og­nized in the sec­ond quar­ter of 2012. Af­ter ex­clud­ing the $4.0 mil­lion gain on the sale of the Home Mort­gage Cen­ter and the $6.1 mil­lion loss on the ter­mi­na­tion of the pen­sion, ad­justed di­luted earn­ings per share for the first nine months of 2012 were $1.60.

"This was an­other strong quar­ter of earn­ings at Mid­We­st­One," stated Pres­i­dent and Chief Ex­ec­u­tive Of­fi­cer Charles N. Funk. "We continue to ben­e­fit from mod­er­ate loan growth, im­proved loan pool per­for­mance and ad­e­quate ex­pense con­trol. We are also ben­e­fit­ing from im­proved per­for­mance in our non­in­ter­est in­come ar­eas year-to-date, pri­mar­ily at the Home Mort­gage Cen­ter, our Trust Depart­ment and In­vest­ment Ser­vices Depart­ment. We be­lieve we are on track to set an­other com­pany record in terms of an­nual earn­ings per share for 2012."

Net in­ter­est in­come for the third quar­ter of 2012 im­proved $1.3 mil­lion, or 10.6%, from $12.4 mil­lion for the third quar­ter of 2011, to $13.7 mil­lion. In­come from loan pool par­tic­i­pa­tions was $0.9 mil­lion for the third quar­ter of 2012, an in­crease of $0.6 mil­lion com­pared to the same pe­riod a year ago, on a much lower level of in­vest­ment in 2012, as the Com­pany con­tin­ues to exit this line of busi­ness as balances pay down. De­spite in­creases in loan balances, loan in­ter­est in­come de­creased $0.4 mil­lion, or 2.8%, to $12.8 mil­lion for the third quar­ter of 2012, com­pared to $13.1 mil­lion for the same pe­riod of 2011, due to lower rates. In­come from in­vest­ment se­cu­ri­ties in­creased $0.1 mil­lion, or 3.6%, to $3.9 mil­lion for the third quar­ter of 2012 com­pared to the third quar­ter of 2011. In­ter­est ex­pense de­creased $0.9 mil­lion, or 20.1%, to $3.9 mil­lion for the third quar­ter of 2012, com­pared to $4.8 mil­lion for the same pe­riod of 2011, pri­mar­ily due to lower ex­pense on de­posit ac­counts re­sult­ing from lower in­ter­est rates.

Net in­ter­est in­come for the first nine months of 2012 in­creased $4.0 mil­lion to $40.2 mil­lion com­pared with the nine months ended Septem­ber 30, 2011.

The net in­ter­est mar­gin for the third quar­ter of 2012, cal­cu­lated on a fully tax-equiv­a­lent ba­sis, was 3.57% or 22 ba­sis points higher than the 3.35% net in­ter­est mar­gin for the third quar­ter of 2011. The in­crease was due pri­mar­ily to the av­er­age rate paid on in­ter­est-bear­ing li­a­bil­i­ties de­creas­ing more sig­nif­i­cantly than the av­er­age yield earned on in­ter­estearn­ing as­sets.

The Com­pany posted a net in­ter­est mar­gin of 3.51% for the first nine months of 2012, up 18 ba­sis points from 3.33% for the same pe­riod of 2011, for pre­dom­i­nantly the same rea­son.

The pro­vi­sion for loan losses for the third quar­ter of 2012 was $0.6 mil­lion, a de­crease of $0.2 mil­lion, or 23.3%, from $0.8 mil­lion in the third quar­ter of 2011. The year-to-date 2012 pro­vi­sion for loan losses was $1.7 mil­lion, com­pared with $2.6 mil­lion for the same pe­riod last year. The de­creased pro­vi­sion re­flects the con­tin­ued im­prove­ment in the Com­pany's loan port­fo­lio credit qual­ity in­di­ca­tors and man­age­ment's be­lief that the re­gional econ­omy has gen­er­ally sta­blized.

Non­in­ter­est in­come for the third quar­ter of 2012 de­creased to $3.6 mil­lion, down $0.3 mil­lion, or 8.5%, from $3.9 mil­lion in the third quar­ter of 2011.

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