MidWestOne Financial earnings decline

MidWestOne Financial Group of Iowa City, corporate parent of MidWestOne Bank, posted higher first-quarter net income, but lower earnings per share primarily due to expenses related to the May 1, 2015, merger with Central Bancshares.

Net income for the first quarter was $5.5 million, or 49 cents per share, compared with $4.8 million, or 57 cents per share, for the first quarter of 2015.

After excluding the effects of $2.2 million of expenses related to the merger with Central, first-quarter adjusted earnings per share were 60 cents, compared with 62 cents, after excluding $500,000 of merger related expenses, for the same period last year.

MidWestOne Financial recorded a 109.7 percent increase in noninterest expenses, primarily due to an 84.1 percent increase in salaries and employee benefits mainly from the additional compensation expense associated with the Central acquisition.

'With merger-related expenses excluded, our performance in the quarter was strong, although not quite what it has been in prior quarters,” said Charles Funk, president and CEO of MidWestOne Financial in a news release.

'Our rate of deposit growth was slow during the first quarter of 2016, but we continue to take steps to address this and believe that performance will improve as 2016 moves forward.”

The provision for loan losses for the first quarter of 2016 was $1.1 million, an increase from $600,000 in the first quarter of 2015. The higher provision primarily reflects an increase in outstanding loan balances due to loan growth, and an increase in non-performing loans.

Total loans increased $20.4 million, or 1 percent, from Dec. 31, 2015, to $2.17 billion on March 31, 2016. The largest category of bank loans was commercial real estate loans, comprising about 47 percent of the portfolio.

Non-performing loans increased from $11.5 million, or 0.54 percent of total loans, on Dec. 31, 2015, to $24.3 million, or 1.12 percent of total loans, on March 31, 2016.