# EDGAR Filing Document

**Accession Number:** 0001412665
**File Stem:** 0001412665-23-000005
**Filing Date:** 2023-1
**Character Count:** 86679
**Document Hash:** 33824f15beb5783b20b553bef2a12446
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001412665-23-000005.hdr.sgml**: 20230126

**ACCESSION NUMBER**: 0001412665-23-000005

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 17

**CONFORMED PERIOD OF REPORT**: 20230124

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230126

**DATE AS OF CHANGE**: 20230126

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MidWestOne Financial Group, Inc.
- **CENTRAL INDEX KEY:** 0001412665
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 421206172
- **STATE OF INCORPORATION:** IA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-35968
- **FILM NUMBER:** 23558121

**BUSINESS ADDRESS:**
- **STREET 1:** 102 SOUTH CLINTON ST.
- **CITY:** IOWA CITY
- **STATE:** IA
- **ZIP:** 52240
- **BUSINESS PHONE:** 319-356-5800

**MAIL ADDRESS:**
- **STREET 1:** 102 SOUTH CLINTON ST.
- **CITY:** IOWA CITY
- **STATE:** IA
- **ZIP:** 52240

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ISB Financial Corp.
- **DATE OF NAME CHANGE:** 20070918

?xml version="1.0" ? mofg-20230124

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

  

**FORM 8-K** 

**Current Report** 

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported) January 24, 2023** 

**MidWestOne Financial Group, Inc.** 

**(Exact name of registrant as specified in its charter)** 

  

**Commission file number 001-35968** 

---

| | |
|:---|:---|
| **Iowa** | **42-1206172** |
| **(State or other jurisdiction**<br>**of incorporation)** | **(I.R.S. Employer**<br>**Identification Number)** |

---

**102 South Clinton Street** 

**Iowa City, Iowa 52240** 

**(Address of principal executive offices, including zip code)** 

**(319) 356-5800** 

**(Registrant's telephone number, including area code)** 

**N/A** 

**(Former name or former address, if changed since last report)**

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (*see* General Instruction A.2 below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

---

| | | |
|:---|:---|:---|
| Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: |
| <u>Title of each class</u> | <u>Trading Symbol(s)</u> | <u>Name of each exchange on which registered</u> |
| Common stock, $1.00 par value | MOFG | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

**Item 2.02. &nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial Condition.**

On January 26, 2023, MidWest*One* Financial Group, Inc. (the "Company") issued a press release announcing its earnings for the three months and year ended December 31, 2022. The press release is furnished herewith as Exhibit 99.1.

The information in this item and the attached press release shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.

**Item 5.02. &nbsp;&nbsp;&nbsp;&nbsp;Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.**

On January 24, 2023, the Company entered into a letter agreement with Charles N. Funk, whose retirement from the position of Chief Executive Officer was announced in 2022, in connection with the transition planning process previously undertaken by the Company's Board of Directors pursuant to which Mr. Funk's successor was appointed. Pursuant to the letter agreement, Mr. Funk will serve in the role of Special Advisor to CEO until April 27, 2023, at which time he will retire from employment with the Company. During the transition period covered by the letter agreement, Mr. Funk will receive a base salary and will continue to be eligible for annual incentive bonuses, including with respect to that portion of calendar year 2023 during which he remains employed with the Company.

The foregoing description of the letter agreement is qualified in its entirety by the terms and conditions of such document, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

**Item 8.01.&nbsp;&nbsp;&nbsp;&nbsp;Other Events.**

The Board of Directors of the Company declared a cash dividend of $0.2425 per common share on January 24, 2023. The dividend is payable March 15, 2023, to shareholders of record at the close of business on March 1, 2023.

**Item 9.01.**&nbsp;&nbsp;&nbsp;&nbsp;**Financial Statements and Exhibits.**

(d)&nbsp;&nbsp;&nbsp;&nbsp;Exhibits*.* 

---

| | |
|:---|:---|
| <u>[10.1](letteragreementsigned012.htm)</u> | Letter Agreement, dated January 24, 2023, from the Compensation Committee of the Board of Directors of MidWest*One* Financial Group, Inc., to Charles N. Funk regarding compensation matters. |
| <u>[99.1](financialresultsq42022.htm)</u> | MidWest*One* Financial Group, Inc. press release dated January 26, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| | | **MIDWEST*ONE* FINANCIAL GROUP, INC.** | **MIDWEST*ONE* FINANCIAL GROUP, INC.** |
| Dated: | January 26, 2023 | By: | /s/ BARRY S. RAY |
|  |  |  | **Barry S. Ray** |
|  |  |  | **Chief Financial Officer** |

---

## Exhibit 10.1

![](letteragreementsigned012001.jpg)

------

![](letteragreementsigned012002.jpg)

------

## Exhibit 99.1

![mofglogoa01a.jpg](mofglogoa01a.jpg)

---

| | |
|:---|:---|
| **FOR IMMEDIATE RELEASE** | **January 26, 2023** |

---

**MIDWEST*ONE* FINANCIAL GROUP, INC.**

**REPORTS FINANCIAL RESULTS FOR THE**

**FOURTH QUARTER AND FULL YEAR OF 2022** 

***Fourth Quarter Summary***<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Net income for the fourth quarter was $16.0 million, or $1.02 per diluted common share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***◦*** Revenue was $54.5 million, which included $2.5 million, or $0.16 per diluted common share, of additional bargain purchase gain stemming from the Iowa First Bancshares Corp. ("IOFB") acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Credit loss expense was $0.6 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***◦*** Noninterest expense was $34.4 million, which included $0.4 million of merger-related expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Annualized loan growth was 10.36%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Nonperforming assets ratio improved 16 basis points ("bps") to 0.24%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Efficiency ratio was 57.79%<sup>2</sup>.

***Full Year 2022 Summary***<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Net income for the full year was $60.8 million, or $3.87 per diluted common share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted core loan growth (excluding PPP and IOFB acquired loans) was 10.73%<sup>2</sup>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*•* Nonperforming assets ratio fell 29 bps to 0.24%; net charge-off ratio was 0.19%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Efficiency ratio was 56.98%<sup>2</sup>.

**Iowa City, Iowa** - MidWest*One* Financial Group, Inc. (Nasdaq: MOFG) ("we", "our", or the "Company") today reported net income for the fourth quarter of 2022 of $16.0 million, or $1.02 per diluted common share, compared to net income of $18.3 million, or $1.17 per diluted common share, for the linked quarter. Net income for the full year of 2022 was $60.8 million, or $3.87 per diluted common share, compared to net income for the full year of 2021 of $69.5 million, or $4.37 per diluted common share.

**CEO COMMENTARY**

Charles (Chip) Reeves, Chief Executive Officer of the Company, commented, "We are pleased with our strong loan growth and greatly improved asset quality for the quarter and for the full year ended December 31, 2022. Annualized loan growth was 10.36% for the fourth quarter of 2022, reflecting strong momentum in our key metro markets of the Twin Cities, Denver and Metro Iowa. This represents the third consecutive quarter of double digit loan growth, a true testament to our relationship banking model and the talent acquisition that has occurred the past eighteen months. Asset quality metrics improved as we took strategic action to resolve legacy credit issues. As a result, the nonperforming assets ratio declined 16 bps to 0.24%. The allowance for credit losses ratio stands at 1.28% and 30-89 day delinquencies continue to be low. We believe we are positioned well for the possible macroeconomic uncertainties of 2023.

We continue our balanced approach to deposit costs and retention efforts and measure our cycle-to-date interest bearing deposit beta as 15%. The quarter-over-quarter beta accelerated in the fourth quarter of 2022 to 25% and we expect continued deposit competition in 2023. We will be vigilant in defending our core, relationship deposit franchise. Due to rising funding costs and our earning asset composition, net interest income and net interest margin declined in the fourth quarter of 2022, partially offset by the aforementioned strong loan growth.

During the fourth quarter of 2022, we were pleased to be recognized by Newsweek as Iowa's Best Small Bank for the second year in a row; an outstanding honor for our team members who live our operating principles each and every day."

<sup>1</sup> Fourth Quarter Summary compares to the third quarter of 2022 (the "linked quarter") unless noted. Full Year 2022 Summary compares to the full year 2021 unless noted.

<sup>2</sup> Non-GAAP measure. See the separate *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **FINANCIAL HIGHLIGHTS** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **FINANCIAL HIGHLIGHTS** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(Dollars in thousands, except per share amounts)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Net interest income | $**43564** | $45733 | $38819 | $**166358** | $156281 |
| Noninterest income | **10940** | 12588 | 11229 | **47519** | 42453 |
| &nbsp;&nbsp;&nbsp;Total revenue, net of interest expense | **54504** | 58321 | 50048 | **213877** | 198734 |
| Credit loss expense (benefit) | **572** | 638 | 622 | **4492** | (7336) |
| Noninterest expense | **34440** | 34623 | 30444 | **132788** | 116592 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before income tax expense | **19492** | 23060 | 18982 | **76597** | 89478 |
| Income tax expense | **3490** | 4743 | 4726 | **15762** | 19992 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | $**16002** | $18317 | $14256 | $**60835** | $69486 |
| Diluted earnings per share | $**1.02** | $1.17 | $0.91 | $**3.87** | $4.37 |
| Return on average assets | **0.97%** | 1.13% | 0.95% | **0.97%** | 1.20% |
| Return on average equity | **13.26%** | 14.56% | 10.68% | **12.16%** | 13.18% |
| Return on average tangible equity<sup>(1)</sup> | **17.85%** | 19.32% | 13.50% | **15.89%** | 16.63% |
| Efficiency ratio<sup>(1)</sup> | **57.79%** | 53.67% | 56.74% | **56.98%** | 54.65% |
| <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. |

---

**INCOME STATEMENT HIGHLIGHTS** 

***Net Interest Income***

*Linked Quarter* 

Net interest income decreased to $43.6 million in the fourth quarter of 2022 from $45.7 million in the third quarter of 2022, due primarily to higher funding costs from the general increase in interest rates and volumes, partially offset by higher interest earning asset yields and volumes.

The Company's tax equivalent net interest margin was 2.93% in the fourth quarter of 2022 compared to 3.08% in the linked quarter, driven by higher funding costs, partially offset by higher interest earning asset yields.The cost of interest bearing liabilities increased 44 bps to 1.08%, due to interest bearing deposits costs of 0.83%, short-term borrowing costs of 2.54%, and long-term debt costs of 5.54%, which increased 37 bps, 120 bps and 84 bps respectively, from the linked quarter. Total interest earning asset yields increased 20 bps from the linked quarter, primarily as a result of an increase in loan and securities yields of 22 bps and 8 bps, respectively.

Average interest bearing liabilities increased $83.2 million to $4.84 billion in the fourth quarter of 2022 from the linked quarter, primarily as a result of increased short-term borrowings. Average interest bearing deposits were up slightly and reflected $48.5 million in average brokered time deposit volumes purchased during the fourth quarter of 2022. Average interest earning assets increased $34.2 million to $6.09 billion in the fourth quarter of 2022 when compared to the linked quarter. This increase reflected growth in the organic loan portfolio, partially offset by lower volumes of debt securities.

*Full Year* 

When compared to the prior year, net interest income increased to $166.4 million from $156.3 million, due primarily to a higher interest earning asset yields and volumes, partially offset by higher funding costs and volumes.

The Company's tax equivalent net interest margin was 2.92% for the year ended 2022 compared to 2.95% in the prior year, driven by higher funding costs, partially offset by higher interest earning asset yields. The cost of interest bearing liabilities increased 18 bps to 0.66%, due to interest bearing deposit costs of 0.48%, short-term borrowing costs of 1.38%, and long-term debt costs of 4.76%, which increased 14 bps, 109 bps and 98 bps, respectively from the prior year end. Total interest earning assets yield increased 12 bps primarily as a result of an increase in securities and loan yields of 31 bps and 3 bps, respectively. Paycheck Protection Program ("PPP") loan fee accretion and interest increased 2021 loan yields by 17 bps compared to 2 bps in 2022.

Average interest bearing liabilities increased $370.9 million to $4.61 billion for the year ended 2022 compared to the prior year, primarily as a result of increased interest bearing deposits and short-term borrowings. The increase reflected liabilities assumed in the IOFB acquisition and higher wholesale funding in 2022. Average interest earning assets increased $403.4 million to $5.86 billion for the year ended 2022 when compared to the prior year. This

------

increase reflected interest-earning assets acquired in the IOFB acquisition, organic loan growth, and a higher volume of debt securities.

***Noninterest Income***

Noninterest income for the fourth quarter of 2022 decreased $1.6 million, or 13.1%, from the linked quarter. The decrease was primarily due to decreases of $0.8 million and $0.7 million in loan revenue and other income, respectively. The decrease in loan revenue reflected a smaller increase in the fair value of our mortgage servicing rights, coupled with a decline in the gain on sale from residential mortgage loans as a result of lower mortgage origination volumes. The decrease in other noninterest income stemmed primarily from a one-time settlement that was recorded in the third quarter of 2022, which was partially offset by an increase of $2.5 million in the bargain purchase gain recorded related to the IOFB acquisition.

Noninterest income for the year ended 2022 increased $5.1 million, or 11.9%, from the prior year. The increase was primarily due to increases of $6.4 million and $1.2 million in other revenue and service charges and fees, respectively. The increase in other noninterest income was primarily due to a one-time settlement and a $3.8 million bargain purchase gain recognized in connection with the IOFB acquisition. The increase in service charges and fees was primarily attributable to the additional operations of IOFB since acquisition. The largest offset to the increases above was a $2.4 million reduction in loan revenue, which reflected a decline in the gain on sale of residential mortgage loans as a result of lower mortgage origination volumes, partially offset by an increase in the fair value of our mortgage servicing rights.

The following table presents details of noninterest income for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **<u>Noninterest Income</u>** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(In thousands)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Investment services and trust activities | $**2666** | $2876 | $3115 | $**11223** | $11675 |
| Service charges and fees | **2028** | 2075 | 1684 | **7477** | 6259 |
| Card revenue | **1784** | 1898 | 1746 | **7210** | 7015 |
| Loan revenue | **966** | 1722 | 3132 | **10504** | 12948 |
| Bank-owned life insurance | **637** | 579 | 550 | **2305** | 2162 |
| Investment securities gains, net | **(1)** | (163) | 137 | **271** | 242 |
| Other | **2860** | 3601 | 865 | **8529** | 2152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | $**10940** | $12588 | $11229 | $**47519** | $42453 |

---

***Noninterest Expense***

Noninterest expense for the fourth quarter of 2022 decreased $0.2 million, or 0.5%, from the linked quarter, primarily due to decreases of $0.4 million, $0.2 million, and $0.2 million in data processing, marketing, and legal and professional, respectively. These decreases primarily reflected the overall decline in merger-related expenses. Partially offsetting the decreases above was an increase of $0.4 million in compensation and employee benefits stemming from an increase in incentive compensation expense.

Noninterest expense for the year ended 2022 increased $16.2 million, or 13.89%, from the prior year. The increase in noninterest expense was due to an overall increase in all noninterest expense categories, except communications and foreclosed assets, net. These increases primarily reflected costs associated with the acquired operations of IOFB, including merger-related expenses of $2.2 million. Also contributing to the increase in compensation and employee benefits was normal annual salary and employee benefit increases, coupled with a decline of $1.6 million in the benefit from loan origination costs, which are deferred and amortized over the life of the loan to which they relate and were elevated in the prior year due to PPP loans. In addition to the identified increases above, occupancy expense also reflected an increase of $0.6 million from the write-down of fixed assets transferred to held for sale, while legal and professional expense reflected elevated legal expenses related to litigation, loan legal expenses, and executive recruitment.

The decreases in net interest income and noninterest income noted above were the primary drivers of the increase in the efficiency ratio, which increased 4.12 percentage points to 57.79% from 53.67% in the linked quarter. The full year of 2022 increase in noninterest expense more than offset the increases in net interest income and noninterest income, and was the primary driver of the increase in the efficiency ratio, which increased 2.33 percentage points to 56.98% from 54.65% in the prior year.

------

The following table presents details of noninterest expense for the periods indicated:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **<u>Noninterest Expense</u>** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(In thousands)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Compensation and employee benefits | $**20438** | $20046 | $18266 | $**78103** | $69937 |
| Occupancy expense of premises, net | **2663** | 2577 | 2211 | **10272** | 9274 |
| Equipment | **2327** | 2358 | 2189 | **8693** | 7816 |
| Legal and professional | **1846** | 2012 | 1826 | **8646** | 5256 |
| Data processing | **1375** | 1731 | 1211 | **5574** | 5216 |
| Marketing | **947** | 1139 | 1121 | **4272** | 4022 |
| Amortization of intangibles | **1770** | 1789 | 1245 | **6069** | 5357 |
| FDIC insurance | **405** | 415 | 380 | **1660** | 1572 |
| Communications | **285** | 302 | 277 | **1125** | 1332 |
| Foreclosed assets, net | **48** | 42 | 7 | **(18)** | 233 |
| Other | **2336** | 2212 | 1711 | **8392** | 6577 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total noninterest expense | $**34440** | $34623 | $30444 | $**132788** | $116592 |

---

The following table presents details of merger-related expenses for the periods indicated:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **<u>Merger-related Expenses</u>** | **2022** | 2022 | 2021 | **2022** | 2021 |
| **(In thousands)** |  |  |  |  |  |
| Compensation and employee benefits | $**189** | $132 | $— | $**471** | $— |
| Occupancy expense of premises, net | **—** |  |  | **1** |  |
| Equipment | **4** | 14 | 18 | **29** | 18 |
| Legal and professional | **54** | 193 | 202 | **948** | 202 |
| Data processing | **131** | 304 |  | **511** |  |
| Marketing | **2** | 90 | 2 | **164** | 2 |
| Communications | **—** |  |  | **3** |  |
| Other | **29** | 30 | 2 | **74** | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total merger-related expenses | $**409** | $763 | $224 | $**2201** | $224 |

---

***Income Taxes***

The Company's effective income tax rate decreased to 17.9% in the fourth quarter of 2022 compared to 20.6% in the linked quarter. The decrease was primarily due to the increase to the bargain purchase gain that was recorded related to the IOFB acquisition. The effective income tax rate for the full year 2022 was 20.6%, as compared to 22.3% in the prior year.

------

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| | | | |
|:---|:---|:---|:---|
| **BALANCE SHEET, LIQUIDITY AND CAPITAL HIGHLIGHTS** | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** |
| **BALANCE SHEET, LIQUIDITY AND CAPITAL HIGHLIGHTS** | **December 31,** | September 30, | December 31, |
| **(Dollars in millions, except per share amounts)** | **2022** | 2022 | 2021 |
| **Ending Balance Sheet** |  |  |  |
| &nbsp;&nbsp;&nbsp;Total assets | $**6577.9** | $6491.1 | $6025.1 |
| &nbsp;&nbsp;&nbsp;Loans held for investment, net of unearned income | **3840.5** | 3746.3 | 3245.0 |
| &nbsp;&nbsp;&nbsp;Total securities | **2282.9** | 2299.9 | 2288.1 |
| &nbsp;&nbsp;&nbsp;Total deposits | **5468.9** | 5476.8 | 5114.5 |
| **Average Balance Sheet** |  |  |  |
| &nbsp;&nbsp;&nbsp;Average total assets | $**6517.0** | $6457.6 | $5934.1 |
| &nbsp;&nbsp;&nbsp;Average total loans | **3791.9** | 3673.4 | 3268.8 |
| &nbsp;&nbsp;&nbsp;Average total deposits | **5495.6** | 5507.5 | 5015.5 |
| **Funding and Liquidity** |  |  |  |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | $**391.9** | $304.5 | $181.4 |
| &nbsp;&nbsp;&nbsp;Long-term debt | **139.2** | 154.2 | 154.9 |
| &nbsp;&nbsp;&nbsp;Loans to deposits ratio | **70.22%** | 68.40% | 63.45% |
| **Equity** |  |  |  |
| &nbsp;&nbsp;&nbsp;Total shareholders' equity | $**492.8** | $472.2 | $527.5 |
| &nbsp;&nbsp;&nbsp;Common equity ratio | **7.49%** | 7.28% | 8.75% |
| &nbsp;&nbsp;Tangible common equity<sup>(1)</sup> | **400.0** | 377.7 | 445.1 |
| &nbsp;&nbsp;Tangible common equity ratio<sup>(1)</sup> | **6.17%** | 5.90% | 7.49% |
| **Per Share Data** |  |  |  |
| &nbsp;&nbsp;&nbsp;Book value | $**31.54** | $30.23 | $33.66 |
| &nbsp;&nbsp;Tangible book value<sup>(1)</sup> | $**25.60** | $24.17 | $28.40 |
| (1) Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | (1) Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | (1) Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | (1) Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. |

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***Loans Held for Investment***

Loans held for investment, net of unearned income, increased $94.2 million, or 2.5%, to $3.84 billion from September 30, 2022. This increase was driven by new loan production and higher volumes of line of credit usage during the fourth quarter of 2022.

The following table presents the composition of loans held for investment, net of unearned income, as of the dates indicated:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **<u>Loans Held for Investment</u>** | **December 31, 2022** | **December 31, 2022** | September 30, 2022 | September 30, 2022 | December 31, 2021 | December 31, 2021 |
|  | **Balance** | **% of Total** | Balance | % of Total | Balance | % of Total |
| **(dollars in thousands)** | **Balance** | **% of Total** | Balance | % of Total | Balance | % of Total |
| Commercial and industrial | $**1055162** | **27.5** | $1041662 | 27.8 | $902314 | 27.8 |
| Agricultural | **115320** | **3.0** | 116229 | 3.1 | 103417 | 3.2 |
| Commercial real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction and development | **270991** | **7.1** | 276941 | 7.4 | 172160 | 5.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Farmland | **183913** | **4.8** | 183581 | 4.9 | 144673 | 4.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multifamily | **252129** | **6.6** | 222592 | 5.9 | 244503 | 7.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **1272985** | **33.1** | 1226983 | 32.8 | 1143205 | 35.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total commercial real estate | **1980018** | **51.6** | 1910097 | 51.0 | 1704541 | 52.5 |
| Residential real estate |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;One-to-four family first liens | **451210** | **11.7** | 446373 | 11.9 | 333308 | 10.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;One-to-four family junior liens | **163218** | **4.2** | 157276 | 4.2 | 133014 | 4.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total residential real estate | **614428** | **15.9** | 603649 | 16.1 | 466322 | 14.4 |
| Consumer | **75596** | **2.0** | 74652 | 2.0 | 68418 | 2.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans held for investment, net of unearned income | $**3840524** | **100.0** | $3746289 | 100.0 | $3245012 | 100.0 |
| Total commitments to extend credit | $**1190607** |  | $1159323 |  | $1014397 |  |

---

------

***Credit Loss Expense & Allowance for Credit Losses***

The following table shows the activity in the allowance for credit losses for the periods indicated:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **<u>Allowance for Credit Losses Roll Forward</u>** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(In thousands)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Beginning balance | $**52100** | $52350 | $47900 | $**48700** | $55500 |
| &nbsp;&nbsp;&nbsp;&nbsp;PCD allowance established in acquisition | **—** |  |  | **3371** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Charge-offs | **(3615)** | (970) | (255) | **(7656)** | (2332) |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries | **143** | 382 | 533 | **1093** | 2768 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net charge-offs | **(3472)** | (588) | 278 | **(6563)** | 436 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit loss expense (benefit) related to loans | **572** | 338 | 522 | **3692** | (7236) |
| Ending balance | $**49200** | $52100 | $48700 | $**49200** | $48700 |

---

As of December 31, 2022, the allowance for credit losses ("ACL") was $49.2 million, or 1.28% of loans held for investment, net of unearned income, compared with $52.1 million, or 1.39% of loans held for investment, net of unearned income, at September 30, 2022. The change in the ACL between September 30, 2022 and December 31, 2022 included charge-offs of $1.6 million, related to the resolution of credit issues totaling $8.0 million of notes. Credit loss expense of $0.6 million in the fourth quarter of 2022 was consistent with the linked quarter and was primarily attributable to a reserve taken to support loan growth.

***Deposits***

Total deposits declined $7.8 million, or 0.1%, to $5.47 billion from September 30, 2022. This decline reflected the competitive market for deposits driven by the rapid rate of increase in the federal funds target rate over the course of this year. Brokered deposits increased $126.8 million from September 30, 2022.

The following table presents the composition of our deposit portfolio as of the dates indicated:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **<u>Deposit Composition</u>** | **December 31, 2022** | **December 31, 2022** | September 30, 2022 | September 30, 2022 | December 31, 2021 | December 31, 2021 |
| **(Dollars in thousands)** | **Balance** | **% of Total** | Balance | % of Total | Balance | % of Total |
| Noninterest bearing deposits | $**1053450** | **19.3** | $1139694 | 20.8 | $1005369 | 19.6 |
| Interest checking deposits | **1624278** | **29.8** | 1705289 | 31.2 | 1619136 | 31.6 |
| Money market deposits | **937340** | **17.1** | 991783 | 18.1 | 939523 | 18.4 |
| Savings deposits | **664169** | **12.1** | 700843 | 12.8 | 628242 | 12.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-maturity deposits | **4279237** | **78.3** | 4537609 | 82.9 | 4192270 | 81.9 |
| Time deposits of $250 and under | **559466** | **10.2** | 537616 | 9.8 | 505392 | 9.9 |
| Time deposits over $250 | **630239** | **11.5** | 401557 | 7.3 | 416857 | 8.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total time deposits | **1189705** | **21.7** | 939173 | 17.1 | 922249 | 18.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | $**5468942** | **100.0** | $5476782 | 100.0 | $5114519 | 100.0 |

---

------

**CREDIT RISK PROFILE**

---

| | | | |
|:---|:---|:---|:---|
| | **As of or For the Three Months Ended** | **As of or For the Three Months Ended** | **As of or For the Three Months Ended** |
| **<u>Highlights</u>** | **December 31,** | September 30, | December 31, |
| **(Dollars in thousands)** | **2022** | 2022 | 2021 |
| Credit loss expense (benefit) related to loans | $**572** | $338 | $522 |
| Net charge-offs (recoveries) | $**3472** | $588 | $(278) |
| Net charge-off (recovery) ratio<sup>(1)</sup> | **0.36%** | 0.06% | (0.03)% |
| **At period-end** |  |  |  |
| Pass | $**3635766** | $3550695 | $3013917 |
| Special Mention / Watch | **108064** | 101255 | 117401 |
| Classified | **96694** | 94339 | 113694 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total loans held for investment, net | $**3840524** | $3746289 | $3245012 |
| Classified loans ratio<sup>(2)</sup> | **2.52%** | 2.52% | 3.50% |
| Nonaccrual loans held for investment | $**15256** | $25027 | $31540 |
| Accruing loans contractually past due 90 days or more | **565** | 936 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming loans | **15821** | 25963 | 31540 |
| Foreclosed assets, net | **103** | 103 | 357 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming assets  | $**15924** | $26066 | $31897 |
| Nonperforming loans ratio<sup>(3)</sup> | **0.41%** | 0.69% | 0.97% |
| Nonperforming assets ratio<sup>(4)</sup> | **0.24%** | 0.40% | 0.53% |
| Allowance for credit losses | $**49200** | $52100 | $48700 |
| Allowance for credit losses ratio<sup>(5)</sup> | **1.28%** | 1.39% | 1.50% |
| Adjusted allowance for credit losses ratio<sup>(6)</sup> | **1.28%** | 1.39% | 1.52% |
| Allowance for credit losses to nonaccrual loans ratio<sup>(7)</sup> | **322.50%** | 208.18% | 154.41% |
| <sup>(1)</sup> Net charge-off (recovery) ratio is calculated as annualized net charge-offs (recoveries) divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, during the period. | <sup>(1)</sup> Net charge-off (recovery) ratio is calculated as annualized net charge-offs (recoveries) divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, during the period. | <sup>(1)</sup> Net charge-off (recovery) ratio is calculated as annualized net charge-offs (recoveries) divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, during the period. | <sup>(1)</sup> Net charge-off (recovery) ratio is calculated as annualized net charge-offs (recoveries) divided by the sum of average loans held for investment, net of unearned income and average loans held for sale, during the period. |
| <sup>(2)</sup> Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period. | <sup>(2)</sup> Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period. | <sup>(2)</sup> Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period. | <sup>(2)</sup> Classified loans ratio is calculated as classified loans divided by loans held for investment, net of unearned income, at the end of the period. |
| <sup>(3)</sup> Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period. | <sup>(3)</sup> Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period. | <sup>(3)</sup> Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period. | <sup>(3)</sup> Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period. |
| <sup>(4)</sup> Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period. | <sup>(4)</sup> Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period. | <sup>(4)</sup> Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period. | <sup>(4)</sup> Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period. |
| <sup>(5)</sup> 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. | <sup>(5)</sup> 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. | <sup>(5)</sup> 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. | <sup>(5)</sup> 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. |
| <sup>(6)</sup> Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(6)</sup> Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(6)</sup> Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(6)</sup> Non-GAAP Measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. |
| <sup>(7)</sup>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. | <sup>(7)</sup>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. | <sup>(7)</sup>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. | <sup>(7)</sup>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. |

---

During the fourth quarter of 2022, overall asset quality improved when compared to the linked quarter and the corresponding period in the prior year. The nonperforming assets ratio declined 16 bps from the linked quarter and 29 bps from the prior year to 0.41%. In addition, the classified loans ratio was consistent with the linked quarter at 2.52%, and declined 98 bps from the prior year.

The following table presents a roll forward of nonperforming loans for the period:

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| | | | |
|:---|:---|:---|:---|
| **<u>Nonperforming Loans</u>** | **Nonaccrual** | **90+ Days Past Due & Still Accruing** | **Total** |
| **(Dollars in thousands)** | **Nonaccrual** | **90+ Days Past Due & Still Accruing** | **Total** |
| **Balance at September 30, 2022** | $**25027** | $**936** | $**25963** |
| Loans placed on nonaccrual or 90+ days past due & still accruing | 2347 | 68 | 2415 |
| Proceeds related to repayment or sale | (8141) | (3) | (8144) |
| Loans returned to accrual status or no longer past due | (205) | (107) | (312) |
| Charge-offs | (3460) | (18) | (3478) |
| Transfers to foreclosed assets | (312) |  | (312) |
| Transfer to nonaccrual |  | (311) | (311) |
| **Balance at December 31, 2022** | $**15256** | $**565** | $**15821** |

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**CAPITAL**

Effective March 31, 2020, we elected the 5-year phase-in option allowed under the interim final rule (IFR) issued by the federal banking regulatory agencies that delays the estimated impact on regulatory capital stemming from the implementation of the current expected credit losses (CECL) accounting standard. The IFR allows the add back of 100% of the capital effect from the day one CECL transition adjustment and 25% of the capital effect from subsequent increases in the allowance for credit losses through the two-year period ending December 31, 2021. The modified CECL transitional amount of $9.4 million is then reduced from capital over the subsequent three-year period.

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| | | | |
|:---|:---|:---|:---|
| **<u>Regulatory Capital Ratios</u>** | **December 31,** | September 30, | December 31, |
| **<u>Regulatory Capital Ratios</u>** | **2022** <sup>(1)</sup> | 2022 | 2021 |
| **MidWest*One* Financial Group, Inc. Consolidated** |  |  |  |
| Tier 1 leverage to average assets ratio | **8.35%** | 8.24% | 8.67% |
| Common equity tier 1 capital to risk-weighted assets ratio | **9.28%** | 9.18% | 9.94% |
| Tier 1 capital to risk-weighted assets ratio | **10.05%** | 9.97% | 10.83% |
| Total capital to risk-weighted assets ratio | **12.07%** | 12.10% | 13.09% |
| **MidWest*One* Bank** |  |  |  |
| Tier 1 leverage to average assets ratio | **9.36%** | 9.31% | 9.25% |
| Common equity tier 1 capital to risk-weighted assets ratio | **11.29%** | 11.26% | 11.58% |
| Tier 1 capital to risk-weighted assets ratio | **11.29%** | 11.26% | 11.58% |
| Total capital to risk-weighted assets ratio | **12.10%** | 12.17% | 12.46% |
| (1) Capital ratios for December 31, 2022 are preliminary |  |  |  |

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**IOWA FIRST BANCSHARES CORP. ACQUISITION**

On June 9, 2022, we acquired Iowa First Bancshares Corp ("IOFB"). The table below summarizes the amounts recognized at the acquisition date for each major class of assets acquired and liabilities assumed:

---

| | | | |
|:---|:---|:---|:---|
| **(In thousands)** | **As of June 9, 2022** | **As of June 9, 2022** | **As of June 9, 2022** |
| | **As Reported at September 30, 2022** | **Fourth Quarter of 2022 Fair Value Adjustments** | **As Reported at December 31, 2022** |
| **Merger consideration** | | | |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash consideration | $46672 | $— | $46672 |
| **Identifiable net assets acquired, at fair value** |  |  |  |
| Assets acquired |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash and due from banks | 10192 |  | 10192 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest earning deposits in banks | 67855 |  | 67855 |
| &nbsp;&nbsp;&nbsp;&nbsp; Debt securities | 119820 |  | 119820 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans held for investment | 281326 |  | 281326 |
| &nbsp;&nbsp;&nbsp;&nbsp; Premises and equipment | 7363 |  | 7363 |
| &nbsp;&nbsp;&nbsp;&nbsp; Core deposit intangible | 16500 |  | 16500 |
| &nbsp;&nbsp;&nbsp;&nbsp; Other assets | 11628 | 2512 | 14140 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets acquired | 514684 | 2512 | 517196 |
| Liabilities assumed |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Deposits | (463638) |  | (463638) |
| &nbsp;&nbsp;&nbsp;&nbsp; Other liabilities | (3117) |  | (3117) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities assumed | (466755) |  | (466755) |
| Identifiable net assets acquired, at fair value | 47929 | 2512 | 50441 |
| **Bargain purchase gain (reported in other noninterest income)** | $1257 | $2512 | $3769 |

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**CORPORATE UPDATE**

***Share Repurchase Program***

Under our current repurchase program, no common shares were repurchased by the Company during the fourth quarter of 2022. At December 31, 2022, the total amount available under the Company's current share repurchase program was $3.0 million.

***Cash Dividend Announcement***

The Board of Directors of the Company declared a cash dividend of $0.2425 per common share on January 24, 2023. The dividend is payable March 15, 2023, to shareholders of record at the close of business on March 1, 2023.

**CONFERENCE CALL DETAILS**

The Company will host a conference call for investors at 11:00 a.m. CT on January 27, 2023. To participate, you may pre-register for this call utilizing the following link: https://www.netroadshow.com/events/login?show=6ffe77d3&confId=45498. 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 1-844-200-6205 using an access code of 022797 at least fifteen minutes before the call start time. If you are unable to participate on the call, a replay will be available until April 27, 2023, by calling 1-866-813-9403 and using the replay access code of 058978. 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 MIDWEST*ONE* FINANCIAL GROUP, INC.**

MidWest*One* Financial Group, Inc. is a financial holding company headquartered in Iowa City, Iowa. MidWest*One* is the parent company of MidWest*One* Bank, which operates banking offices in Iowa, Minnesota, Wisconsin, Florida, and Colorado. MidWest*One* provides electronic delivery of financial services through its website, MidWest*One*.bank. MidWest*One* Financial Group, Inc. trades on the Nasdaq Global Select Market under the symbol "MOFG".

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***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 risks of mergers (including with IOFB), 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; (2) credit quality deterioration, pronounced and sustained reduction in real estate market values, or other uncertainties, including the impact of inflationary pressures 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; (3) the effects of actual and expected increases in inflation and interest rates, including on our net income and the value of our securities portfolio; (4) 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; (5) fluctuations in the value of our investment securities; (6) governmental monetary and fiscal policies; (7) changes in and uncertainty related to benchmark interest rates used to price loans and deposits, including the expected elimination of LIBOR and the adoption of a substitute; (8) legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators, including the new 1.0% excise tax on stock buybacks by publicly traded companies; (9) the ability to attract and retain key executives and employees experienced in banking and financial services; (10) the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio; (11) our ability to adapt successfully to technological changes to compete effectively in the marketplace; (12) credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio; (13) 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; (14) the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities; (15) volatility of rate-sensitive deposits; (16) operational risks, including data processing system failures or fraud; (17) asset/liability matching risks and liquidity risks; (18) the costs, effects and outcomes of existing or future litigation; (19) changes in general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business; (20) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board; (21) war or terrorist activities, including the war in Ukraine, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets; (22) the effects of cyber-attacks; (23) the imposition of tariffs or other domestic or international governmental policies impacting the value of the agricultural or other products of our borrowers; (24) effects of the ongoing COVID-19 pandemic, including its effects on the economic environment, our customers, employees and supply chain; and (25) other risk factors detailed from time to time in Securities and Exchange Commission filings made by the Company.* 

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**MIDWEST*ONE* FINANCIAL GROUP, INC. AND SUBSIDIARIES** 

**FIVE QUARTER CONSOLIDATED BALANCE SHEETS** 

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **December 31,** | September 30, | June 30, | March 31, | December 31, |
| **(In thousands)** | **2022** | 2022 | 2022 | 2022 | 2021 |
| **ASSETS** |  |  |  |  |  |
| Cash and due from banks | $**83990** | $77513 | $60622 | $47677 | $42949 |
| Interest earning deposits in banks | **2445** | 1001 | 23242 | 12152 | 160881 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cash and cash equivalents | **86435** | 78514 | 83864 | 59829 | 203830 |
| Debt securities available for sale at fair value | **1153547** | 1153304 | 1234789 | 1145638 | 2288110 |
| Held to maturity securities at amortized cost | **1129421** | 1146583 | 1168042 | 1204212 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total securities | **2282968** | 2299887 | 2402831 | 2349850 | 2288110 |
| Loans held for sale | **612** | 2320 | 4991 | 6466 | 12917 |
| Gross loans held for investment | **3854791** | 3761664 | 3627728 | 3256294 | 3252194 |
| Unearned income, net | **(14267)** | (15375) | (16576) | (6259) | (7182) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans held for investment, net of unearned income | **3840524** | 3746289 | 3611152 | 3250035 | 3245012 |
| Allowance for credit losses | **(49200)** | (52100) | (52350) | (46200) | (48700) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans held for investment, net | **3791324** | 3694189 | 3558802 | 3203835 | 3196312 |
| Premises and equipment, net | **87125** | 87732 | 89048 | 82603 | 83492 |
| Goodwill | **62477** | 62477 | 62477 | 62477 | 62477 |
| Other intangible assets, net | **30315** | 32086 | 33874 | 18658 | 19885 |
| Foreclosed assets, net | **103** | 103 | 284 | 273 | 357 |
| Other assets | **236517** | 233753 | 206320 | 176223 | 157748 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $**6577876** | $6491061 | $6442491 | $5960214 | $6025128 |
| **LIABILITIES** |  |  |  |  |  |
| Noninterest bearing deposits | $**1053450** | $1139694 | $1114825 | $1002415 | $1005369 |
| Interest bearing deposits | **4415492** | 4337088 | 4422616 | 4075310 | 4109150 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | **5468942** | 5476782 | 5537441 | 5077725 | 5114519 |
| Short-term borrowings | **391873** | 304536 | 193894 | 181193 | 181368 |
| Long-term debt | **139210** | 154190 | 159168 | 139898 | 154879 |
| Other liabilities | **85058** | 83324 | 63156 | 56941 | 46887 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | **6085083** | 6018832 | 5953659 | 5455757 | 5497653 |
| **SHAREHOLDERS' EQUITY** |  |  |  |  |  |
| Common stock | **16581** | 16581 | 16581 | 16581 | 16581 |
| Additional paid-in capital | **302085** | 301418 | 300859 | 300505 | 300940 |
| Retained earnings | **289289** | 276998 | 262395 | 253500 | 243365 |
| Treasury stock | **(26115)** | (26145) | (25772) | (24113) | (24546) |
| Accumulated other comprehensive loss | **(89047)** | (96623) | (65231) | (42016) | (8865) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | **492793** | 472229 | 488832 | 504457 | 527475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $**6577876** | $6491061 | $6442491 | $5960214 | $6025128 |

---

------

**MIDWEST*ONE* FINANCIAL GROUP, INC. AND SUBSIDIARIES** 

**FIVE QUARTER AND YEAR TO DATE CONSOLIDATED STATEMENTS OF INCOME** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| | **December 31,** | September 30, | June 30, | March 31, | December 31, | **December 31,** | December 31, |
| **(In thousands, except per share data)** | **2022** | 2022 | 2022 | 2022 | 2021 | **2022** | 2021 |
| Interest income |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans, including fees | $**43769** | $40451 | $32746 | $31318 | $33643 | $**148284** | $141036 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxable investment securities | **10685** | 10635 | 9576 | 8123 | 7461 | **39019** | 25692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt investment securities | **2303** | 2326 | 2367 | 2383 | 2415 | **9379** | 9947 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **—** | 9 | 40 | 28 | 37 | **77** | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total interest income** | **56757** | 53421 | 44729 | 41852 | 43556 | **196759** | 176766 |
| Interest expense |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits | **9127** | 5035 | 3173 | 2910 | 3031 | **20245** | 13198 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term borrowings | **1955** | 767 | 229 | 119 | 130 | **3070** | 551 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt | **2111** | 1886 | 1602 | 1487 | 1576 | **7086** | 6736 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total interest expense** | **13193** | 7688 | 5004 | 4516 | 4737 | **30401** | 20485 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net interest income** | **43564** | 45733 | 39725 | 37336 | 38819 | **166358** | 156281 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit loss expense (benefit) | **572** | 638 | 3282 |  | 622 | **4492** | (7336) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net interest income after credit loss expense (benefit)** | **42992** | 45095 | 36443 | 37336 | 38197 | **161866** | 163617 |
| Noninterest income |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment services and trust activities | **2666** | 2876 | 2670 | 3011 | 3115 | **11223** | 11675 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service charges and fees | **2028** | 2075 | 1717 | 1657 | 1684 | **7477** | 6259 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Card revenue | **1784** | 1898 | 1878 | 1650 | 1746 | **7210** | 7015 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan revenue | **966** | 1722 | 3523 | 4293 | 3132 | **10504** | 12948 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank-owned life insurance | **637** | 579 | 558 | 531 | 550 | **2305** | 2162 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment securities (losses) gains, net | **(1)** | (163) | 395 | 40 | 137 | **271** | 242 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **2860** | 3601 | 1606 | 462 | 865 | **8529** | 2152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total noninterest income** | **10940** | 12588 | 12347 | 11644 | 11229 | **47519** | 42453 |
| Noninterest expense |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation and employee benefits | **20438** | 20046 | 18955 | 18664 | 18266 | **78103** | 69937 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Occupancy expense of premises, net | **2663** | 2577 | 2253 | 2779 | 2211 | **10272** | 9274 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equipment | **2327** | 2358 | 2107 | 1901 | 2189 | **8693** | 7816 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal and professional | **1846** | 2012 | 2435 | 2353 | 1826 | **8646** | 5256 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data processing | **1375** | 1731 | 1237 | 1231 | 1211 | **5574** | 5216 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketing | **947** | 1139 | 1157 | 1029 | 1121 | **4272** | 4022 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangibles | **1770** | 1789 | 1283 | 1227 | 1245 | **6069** | 5357 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FDIC insurance | **405** | 415 | 420 | 420 | 380 | **1660** | 1572 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Communications | **285** | 302 | 266 | 272 | 277 | **1125** | 1332 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreclosed assets, net | **48** | 42 | 4 | (112) | 7 | **(18)** | 233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **2336** | 2212 | 1965 | 1879 | 1711 | **8392** | 6577 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total noninterest expense** | **34440** | 34623 | 32082 | 31643 | 30444 | **132788** | 116592 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Income before income tax expense** | **19492** | 23060 | 16708 | 17337 | 18982 | **76597** | 89478 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | **3490** | 4743 | 4087 | 3442 | 4726 | **15762** | 19992 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income** | $**16002** | $18317 | $12621 | $13895 | $14256 | $**60835** | $69486 |
| Earnings per common share |  |  |  |  |  |  |  |
| Basic | $**1.02** | $1.17 | $0.81 | $0.89 | $0.91 | $**3.89** | $4.38 |
| Diluted | $**1.02** | $1.17 | $0.80 | $0.88 | $0.91 | $**3.87** | $4.37 |
| Weighted average basic common shares outstanding | **15624** | 15623 | 15668 | 15683 | 15692 | **15649** | 15877 |
| Weighted average diluted common shares outstanding | **15693** | 15654 | 15688 | 15718 | 15734 | **15701** | 15905 |
| Dividends paid per common share | $**0.2375** | $0.2375 | $0.2375 | $0.2375 | $0.2250 | $**0.9500** | $0.9000 |

---

------

**MIDWEST*ONE* FINANCIAL GROUP, INC. AND SUBSIDIARIES** 

**FINANCIAL STATISTICS**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** | **As of or for the Three Months Ended** | **As of or for the Year Ended** | **As of or for the Year Ended** |
| | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(Dollars in thousands, except per share amounts)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| **<u>Earnings:</u>** |  |  |  |  |  |
| Net interest income | $**43564** | $45733 | $38819 | $**166358** | $156281 |
| Noninterest income | **10940** | 12588 | 11229 | **47519** | 42453 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total revenue, net of interest expense | **54504** | 58321 | 50048 | **213877** | 198734 |
| Credit loss expense (benefit) | **572** | 638 | 622 | **4492** | (7336) |
| Noninterest expense | **34440** | 34623 | 30444 | **132788** | 116592 |
| &nbsp;&nbsp;&nbsp;&nbsp; Income before income tax expense | **19492** | 23060 | 18982 | **76597** | 89478 |
| Income tax expense | **3490** | 4743 | 4726 | **15762** | 19992 |
| &nbsp;&nbsp;&nbsp;&nbsp; Net income | $**16002** | $18317 | $14256 | $**60835** | $69486 |
| **<u>Per Share Data:</u>** |  |  |  |  |  |
| Diluted earnings | $**1.02** | $1.17 | $0.91 | $**3.87** | $4.37 |
| Book value | **31.54** | 30.23 | 33.66 | **31.54** | 33.66 |
| Tangible book value<sup>(1)</sup> | **25.60** | 24.17 | 28.40 | **25.60** | 28.40 |
| **<u>Ending Balance Sheet:</u>** |  |  |  |  |  |
| Total assets | $**6577876** | $6491061 | $6025128 | $**6577876** | $6025128 |
| Loans held for investment, net of unearned income | **3840524** | 3746289 | 3245012 | **3840524** | 3245012 |
| Total securities | **2282968** | 2299887 | 2288110 | **2282968** | 2288110 |
| Total deposits | **5468942** | 5476782 | 5114519 | **5468942** | 5114519 |
| Short-term borrowings | **391873** | 304536 | 181368 | **391873** | 181368 |
| Long-term debt | **139210** | 154190 | 154879 | **139210** | 154879 |
| Total shareholders' equity | **492793** | 472229 | 527475 | **492793** | 527475 |
| **<u>Average Balance Sheet:</u>** |  |  |  |  |  |
| Average total assets | $**6516969** | $6457647 | $5934076 | $**6244284** | $5780556 |
| Average total loans | **3791880** | 3673379 | 3268783 | **3511192** | 3362488 |
| Average total deposits | **5495599** | 5507482 | 5015506 | **5309049** | 4838227 |
| **<u>Financial Ratios:</u>** |  |  |  |  |  |
| Return on average assets | **0.97%** | 1.13% | 0.95% | **0.97%** | 1.20% |
| Return on average equity | **13.26%** | 14.56% | 10.68% | **12.16%** | 13.18% |
| Return on average tangible equity<sup>(1)</sup> | **17.85%** | 19.32% | 13.50% | **15.89%** | 16.63% |
| Efficiency ratio<sup>(1)</sup> | **57.79%** | 53.67% | 56.74% | **56.98%** | 54.65% |
| Net interest margin, tax equivalent<sup>(1)</sup> | **2.93%** | 3.08% | 2.83% | **2.92%** | 2.95% |
| Loans to deposits ratio | **70.22%** | 68.40% | 63.45% | **70.22%** | 63.45% |
| Common equity ratio | **7.49%** | 7.28% | 8.75% | **7.49%** | 8.75% |
| Tangible common equity ratio<sup>(1)</sup> | **6.17%** | 5.90% | 7.49% | **6.17%** | 7.49% |
| **<u>Credit Risk Profile:</u>** |  |  |  |  |  |
| Total nonperforming loans | $**15821** | $25963 | $31540 | $**15821** | $31540 |
| Nonperforming loans ratio | **0.41%** | 0.69% | 0.97% | **0.41%** | 0.97% |
| Total nonperforming assets | $**15924** | $26066 | $31897 | $**15924** | $31897 |
| Nonperforming assets ratio | **0.24%** | 0.40% | 0.53% | **0.24%** | 0.53% |
| Net charge-offs (recoveries) | $**3472** | $588 | $(278) | $**6563** | $(436) |
| Net charge-off (recovery) ratio | **0.36%** | 0.06% | (0.03)% | **0.19%** | (0.01)% |
| Allowance for credit losses | $**49200** | $52100 | $48700 | $**49200** | $48700 |
| Allowance for credit losses ratio | **1.28%** | 1.39% | 1.50% | **1.28%** | 1.50% |
| Allowance for credit losses to nonaccrual ratio | **322.50%** | 208.18% | 154.41% | **322.50%** | 154.41% |
| **<u>PPP Loans:</u>** |  |  |  |  |  |
| Average PPP loans | $**134** | $373 | $52564 | $**4294** | $186333 |
| Fee Income | **3** | 8 | 1996 | **867** | 11731 |
| <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. | <sup>(1)</sup> Non-GAAP measure. See the *Non-GAAP Measures* section for a reconciliation to the most directly comparable GAAP measure. |

---

------

**MIDWEST*ONE* FINANCIAL GROUP, INC. AND SUBSIDIARIES**

**AVERAGE BALANCE SHEET AND YIELD ANALYSIS**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **September 30, 2022** | **September 30, 2022** | **September 30, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| **(Dollars in thousands)** | **Average<br>Balance** | **Interest<br>Income/<br>Expense** | **Average<br>Yield/<br>Cost** | **Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average<br>Yield/<br>Cost** | **Average Balance** | **Interest<br>Income/<br>Expense** | **Average<br>Yield/<br>Cost** |
| **ASSETS** | | | | | | | | | |
| Loans, including fees <sup>(1)(2)(3)</sup> | $**3791880** | $**44494** | **4.66%** | $3673379 | $41124 | 4.44% | $3268783 | $34191 | 4.15% |
| Taxable investment securities | **1865494** | **10685** | **2.27%** | 1939517 | 10635 | 2.18% | 1802349 | 7461 | 1.64% |
| Tax-exempt investment securities <sup>(2)(4)</sup> | **422156** | **2893** | **2.72%** | 431898 | 2922 | 2.68% | 455570 | 3026 | 2.64% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total securities held for investment<sup>(2)</sup> | **2287650** | **13578** | **2.35%** | 2371415 | 13557 | 2.27% | 2257919 | 10487 | 1.84% |
| Other | **5562** | **—** | **— %** | 6070 | 9 | 0.59% | 80415 | 37 | 0.18% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest earning assets<sup>(2)</sup> | $**6085092** | $**58072** | **3.79%** | $6050864 | $54690 | 3.59% | $5607117 | $44715 | 3.16% |
| Other assets | **431877** |  |  | 406783 |  |  | 326959 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $**6516969** |  |  | $6457647 |  |  | $5934076 |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |  |  |  |  |
| Interest checking deposits | $**1632749** | $**1703** | **0.41%** | $1725000 | $1463 | 0.34% | $1506600 | $1065 | 0.28% |
| Money market deposits | **995512** | **2369** | **0.94%** | 1016005 | 1268 | 0.50% | 976018 | 520 | 0.21% |
| Savings deposits | **683538** | **306** | **0.18%** | 710836 | 297 | 0.17% | 621871 | 285 | 0.18% |
| Time deposits | **1067044** | **4749** | **1.77%** | 913307 | 2007 | 0.87% | 903765 | 1161 | 0.51% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest bearing deposits | **4378843** | **9127** | **0.83%** | 4365148 | 5035 | 0.46% | 4008254 | 3031 | 0.30% |
| Securities sold under agreements to repurchase | **151880** | **437** | **1.14%** | 144628 | 228 | 0.63% | 190725 | 115 | 0.24% |
| Federal funds purchased | **940** | **10** | **4.22%** |  |  | —% | 33 |  | —% |
| Other short-term borrowings | **152215** | **1508** | **3.93%** | 83086 | 539 | 2.57% | 30 | 15 | 198.37% |
| Short-term borrowings | **305035** | **1955** | **2.54%** | 227714 | 767 | 1.34% | 190788 | 130 | 0.27% |
| Long-term debt | **151266** | **2111** | **5.54%** | 159125 | 1886 | 4.70% | 154870 | 1576 | 4.04% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total borrowed funds | **456301** | **4066** | **3.54%** | 386839 | 2653 | 2.72% | 345658 | 1706 | 1.96% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest bearing liabilities | $**4835144** | $**13193** | **1.08%** | $4751987 | $7688 | 0.64% | $4353912 | $4737 | 0.43% |
| Noninterest bearing deposits | **1116756** |  |  | 1142334 |  |  | 1007252 |  |  |
| Other liabilities | **86242** |  |  | 64063 |  |  | 43576 |  |  |
| Shareholders' equity | **478827** |  |  | 499263 |  |  | 529336 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $**6516969** |  |  | $6457647 |  |  | $5934076 |  |  |
| Net interest income<sup>(2)</sup> |  | $**44879** |  |  | $47002 |  |  | $39978 |  |
| Net interest spread<sup>(2)</sup> |  |  | **2.71%** |  |  | 2.95% |  |  | 2.73% |
| Net interest margin<sup>(2)</sup> |  |  | **2.93%** |  |  | 3.08% |  |  | 2.83% |
| Total deposits<sup>(5)</sup> | $**5495599** | $**9127** | **0.66%** | $5507482 | $5035 | 0.36% | $5015506 | $3031 | 0.24% |
| Cost of funds<sup>(6)</sup> |  |  | **0.88%** |  |  | 0.52% |  |  | 0.35% |

---

(1) Average balance includes nonaccrual loans.

(2) Tax equivalent. The federal statutory tax rate utilized was 21%.

(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $87 thousand, $35 thousand, and $1.9 million for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively. Loan purchase discount accretion was $1.3 million, $2.0 million, and $599 thousand for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively. Tax equivalent adjustments were $725 thousand, $673 thousand, and $548 thousand for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively. The federal statutory tax rate utilized was 21%.

(4) Interest income includes tax equivalent adjustments of $590 thousand, $596 thousand, and $611 thousand for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively. The federal statutory tax rate utilized was 21%.

(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.

(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.

------

**MIDWEST*ONE* FINANCIAL GROUP, INC. AND SUBSIDIARIES**

**AVERAGE BALANCE SHEET AND YIELD ANALYSIS**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| **(Dollars in thousands)** | **Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Cost** | **Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Cost** |
| **ASSETS** | | | | | | |
| Loans, including fees <sup>(1)(2)(3)</sup> | $**3511192** | $**150791** | **4.29%** | $3362488 | $143141 | 4.26% |
| Taxable investment securities | **1891234** | **39019** | **2.06%** | 1577146 | 25692 | 1.63% |
| Tax-exempt investment securities <sup>(2)(4)</sup> | **435907** | **11788** | **2.70%** | 463526 | 12468 | 2.69% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total securities held for investment<sup>(2)</sup> | **2327141** | **50807** | **2.18%** | 2040672 | 38160 | 1.87% |
| Other | **20827** | **77** | **0.37%** | 52617 | 91 | 0.17% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest earning assets<sup>(2)</sup> | $**5859160** | $**201675** | **3.44%** | $5455777 | $181392 | 3.32% |
| Other assets | **385124** |  |  | 324779 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $**6244284** |  |  | $5780556 |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |  |
| Interest checking deposits | $**1640303** | $**5416** | **0.33%** | $1440585 | $4208 | 0.29% |
| Money market deposits | **992390** | **4707** | **0.47%** | 946784 | 2006 | 0.21% |
| Savings deposits | **674846** | **1169** | **0.17%** | 594543 | 1210 | 0.20% |
| Time deposits | **925592** | **8953** | **0.97%** | 882271 | 5774 | 0.65% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest bearing deposits | **4233131** | **20245** | **0.48%** | 3864183 | 13198 | 0.34% |
| Securities sold under agreements to repurchase | **152466** | **872** | **0.57%** | 176606 | 436 | 0.25% |
| Federal funds purchased | **237** | **10** | **4.22%** | 8 |  | —% |
| Other short-term borrowings | **70492** | **2188** | **3.10%** | 15143 | 115 | 0.76% |
| Short-term borrowings | **223195** | **3070** | **1.38%** | 191757 | 551 | 0.29% |
| Long-term debt | **148863** | **7086** | **4.76%** | 178395 | 6736 | 3.78% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total borrowed funds | **372058** | **10156** | **2.73%** | 370152 | 7287 | 1.97% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest bearing liabilities | $**4605189** | $**30401** | **0.66%** | $4234335 | $20485 | 0.48% |
| Noninterest bearing deposits | **1075918** |  |  | 974044 |  |  |
| Other liabilities | **62706** |  |  | 45141 |  |  |
| Shareholders' equity | **500471** |  |  | 527036 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $**6244284** |  |  | $5780556 |  |  |
| Net interest income<sup>(2)</sup> |  | $**171274** |  |  | $160907 |  |
| Net interest spread<sup>(2)</sup> |  |  | **2.78%** |  |  | 2.84% |
| Net interest margin<sup>(2)</sup> |  |  | **2.92%** |  |  | 2.95% |
| Total deposits<sup>(5)</sup> | $**5309049** | $**20245** | **0.38%** | $4838227 | $13198 | 0.27% |
| Cost of funds<sup>(6)</sup> |  |  | **0.54%** |  |  | 0.39% |

---

(1) Average balance includes nonaccrual loans.

(2) Tax equivalent. The federal statutory tax rate utilized was 21%.

(3) Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $0.8 million and $11.2 million for the years ended December 31, 2022 and December 31, 2021, respectively. Loan purchase discount accretion was $4.6 million and $3.3 million for the years ended December 31, 2022 and December 31, 2021, respectively. Tax equivalent adjustments were $2.5 million and $2.1 million for the years ended December 31, 2022 and December 31, 2021, respectively. The federal statutory tax rate utilized was 21%.

(4) Interest income includes tax equivalent adjustments of $2.4 million and $2.5 million for the years ended December 31, 2022 and December 31, 2021, respectively. The federal statutory tax rate utilized was 21%.

(5) Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as annualized interest expense on deposits divided by average total deposits.

(6) Cost of funds is calculated as annualized total interest expense divided by the sum of average total deposits and borrowed funds.

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*Non-GAAP Measures* 

*This earnings release contains non-GAAP measures for tangible common equity, tangible book value per share, tangible common equity ratio, return on average tangible equity, net interest margin (tax equivalent), core net interest margin, loan yield (tax equivalent), core yield on loans, efficiency ratio, core loans, and core commercial loans. Management believes these measures provide investors with useful information regarding the Company's profitability, financial condition and capital adequacy, consistent with how management evaluates the Company's financial performance. The following tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP measure.*

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Tangible Common Equity/Tangible Book Value** | | | | | |
| **per Share/Tangible Common Equity Ratio** | **December 31,** | September 30, | June 30, | March 31, | December 31, |
| **(Dollars in thousands, except per share data)** | **2022** | 2022 | 2022 | 2022 | 2021 |
| Total shareholders' equity | $**492793** | $472229 | $488832 | $504457 | $527475 |
| Intangible assets, net | **(92792)** | (94563) | (96351) | (81135) | (82362) |
| &nbsp;&nbsp;&nbsp;Tangible common equity | $**400001** | $377666 | $392481 | $423322 | $445113 |
| Total assets | $**6577876** | $6491061 | $6442491 | $5960214 | $6025128 |
| Intangible assets, net  | **(92792)** | (94563) | (96351) | (81135) | (82362) |
| &nbsp;&nbsp;&nbsp;Tangible assets | $**6485084** | $6396498 | $6346140 | $5879079 | $5942766 |
| Book value per share | $**31.54** | $30.23 | $31.26 | $32.15 | $33.66 |
| Tangible book value per share<sup>(1)</sup> | $**25.60** | $24.17 | $25.10 | $26.98 | $28.40 |
| Shares outstanding | **15623977** | 15622825 | 15635131 | 15690125 | 15671147 |
| Common equity ratio | **7.49%** | 7.28% | 7.59% | 8.46% | 8.75% |
| Tangible common equity ratio<sup>(2)</sup> | **6.17%** | 5.90% | 6.18% | 7.20% | 7.49% |

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(1) Tangible common equity divided by shares outstanding.

(2) Tangible common equity divided by tangible assets.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **Return on Average Tangible Equity** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(Dollars in thousands)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Net income | $**16002** | $18317 | $14256 | $**60835** | $69486 |
| Intangible amortization, net of tax<sup>(1)</sup> | **1328** | 1342 | 934 | **4552** | 4018 |
| &nbsp;&nbsp;&nbsp;Tangible net income | $**17330** | $19659 | $15190 | $**65387** | $73504 |
| Average shareholders' equity | $**478827** | $499263 | $529336 | $**500471** | $527036 |
| Average intangible assets, net  | **(93662)** | (95499) | (82990) | **(88917)** | (84927) |
| &nbsp;&nbsp;&nbsp;Average tangible equity | $**385165** | $403764 | $446346 | $**411554** | $442109 |
| Return on average equity | **13.26%** | 14.56% | 10.68% | **12.16%** | 13.18% |
| Return on average tangible equity<sup>(2)</sup> | **17.85%** | 19.32% | 13.50% | **15.89%** | 16.63% |

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(1) The combined income tax rate utilized was 25%.

(2) Annualized tangible net income divided by average tangible equity.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Interest Margin, Tax Equivalent/<br>Core Net Interest Margin** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **Net Interest Margin, Tax Equivalent/<br>Core Net Interest Margin** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(Dollars in thousands)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Net interest income | $**43564** | $45733 | $38819 | $**166358** | $156281 |
| Tax equivalent adjustments: |  |  |  |  |  |
| Loans<sup>(1)</sup> | **725** | 673 | 548 | **2507** | 2105 |
| Securities<sup>(1)</sup> | **590** | 596 | 611 | **2409** | 2521 |
| &nbsp;&nbsp;&nbsp;Net interest income, tax equivalent | $**44879** | $47002 | $39978 | $**171274** | $160907 |
| Loan purchase discount accretion | **(1286)** | (2015) | (599) | **(4561)** | (3344) |
| &nbsp;&nbsp;&nbsp;Core net interest income | $**43593** | $44987 | $39379 | $**166713** | $157563 |
| Net interest margin | **2.84%** | 3.00% | 2.75% | **2.84%** | 2.86% |
| Net interest margin, tax equivalent<sup>(2)</sup> | **2.93%** | 3.08% | 2.83% | **2.92%** | 2.95% |
| Core net interest margin<sup>(3)</sup> | **2.84%** | 2.95% | 2.79% | **2.85%** | 2.89% |
| Average interest earning assets | $**6085092** | $6050864 | $5607117 | $**5859160** | $5455777 |

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(1) The federal statutory tax rate utilized was 21%.

(2) Annualized tax equivalent net interest income divided by average interest earning assets.

(3) Annualized core net interest income divided by average interest earning assets.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **Loan Yield, Tax Equivalent / Core Yield on Loans** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(Dollars in thousands)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Loan interest income, including fees | $**43769** | $40451 | $33643 | $**148284** | $141036 |
| Tax equivalent adjustment<sup>(1)</sup> | **725** | 673 | 548 | **2507** | 2105 |
| &nbsp;&nbsp;&nbsp;Tax equivalent loan interest income | $**44494** | $41124 | $34191 | $**150791** | $143141 |
| Loan purchase discount accretion | **(1286)** | (2015) | (599) | **(4561)** | (3344) |
| &nbsp;&nbsp;&nbsp;Core loan interest income | $**43208** | $39109 | $33592 | $**146230** | $139797 |
| Yield on loans | **4.58%** | 4.37% | 4.08% | **4.22%** | 4.19% |
| Yield on loans, tax equivalent<sup>(2)</sup> | **4.66%** | 4.44% | 4.15% | **4.29%** | 4.26% |
| Core yield on loans<sup>(3)</sup> | **4.52%** | 4.22% | 4.08% | **4.16%** | 4.16% |
| Average loans | $**3791880** | $3673379 | $3268783 | $**3511192** | $3362488 |

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(1) The federal statutory tax rate utilized was 21%.

(2) Annualized tax equivalent loan interest income divided by average loans.

(3) Annualized core loan interest income divided by average loans.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
| **Efficiency Ratio** | **December 31,** | September 30, | December 31, | **December 31,** | December 31, |
| **(Dollars in thousands)** | **2022** | 2022 | 2021 | **2022** | 2021 |
| Total noninterest expense | $**34440** | $34623 | $30444 | $**132788** | $116592 |
| Amortization of intangibles | **(1770)** | (1789) | (1245) | **(6069)** | (5357) |
| Merger-related expenses | **(409)** | (763) | (224) | **(2201)** | (224) |
| &nbsp;&nbsp;&nbsp;Noninterest expense used for efficiency ratio | $**32261** | $32071 | $28975 | $**124518** | $111011 |
| Net interest income, tax equivalent<sup>(1)</sup> | $**44879** | $47002 | $39978 | $**171274** | $160907 |
| Plus: Noninterest income | **10940** | 12588 | 11229 | **47519** | 42453 |
| Less: Investment securities (losses) gains, net | **(1)** | (163) | 137 | **271** | 242 |
| &nbsp;&nbsp;&nbsp;Net revenues used for efficiency ratio | $**55820** | $59753 | $51070 | $**218522** | $203118 |
| Efficiency ratio <sup>(2)</sup> | **57.79%** | 53.67% | 56.74% | **56.98%** | 54.65% |

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(1) The federal statutory tax rate utilized was 21%.

(2) Noninterest expense adjusted for amortization of intangibles and merger-related expenses divided by the sum of tax equivalent net interest income, noninterest income and net investment securities gains.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Core Loans/Core Commercial Loans** | **December 31,** | September 30, | June 30, | March 31, | December 31, |
| **(Dollars in thousands)** | **2022** | 2022 | 2022 | 2022 | 2021 |
| **<u>Commercial loans:</u>** |  |  |  |  |  |
| Commercial and industrial | $**1055162** | $1041662 | $986137 | $898942 | $902314 |
| Agricultural | **115320** | 116229 | 110263 | 94649 | 103417 |
| Commercial real estate | **1980018** | 1910097 | 1859940 | 1723891 | 1704541 |
| &nbsp;&nbsp;&nbsp;Total commercial loans | $**3150500** | $3067988 | $2956340 | $2717482 | $2710272 |
| **<u>Consumer loans:</u>** |  |  |  |  |  |
| Residential real estate | $**614428** | $603649 | $578804 | $463676 | $466322 |
| Other consumer | **75596** | 74652 | 76008 | 68877 | 68418 |
| &nbsp;&nbsp;&nbsp;Total consumer loans | $**690024** | $678301 | $654812 | $532553 | $534740 |
| Loans held for investment, net of unearned income | $**3840524** | $3746289 | $3611152 | $3250035 | $3245012 |
| PPP loans | $**83** | $195 | $402 | $3037 | $30841 |
| Acquired IOFB loan portfolio | $**281326** | $281326 | $281470 | $— | $— |
| Core loans<sup>(1)</sup> | $**3840441** | $3746094 | $3610750 | $3246998 | $3214171 |
| Adjusted core loans<sup>(2)</sup> | $**3559115** | $3464768 | $3329280 | $3246998 | $3214171 |
| Core commercial loans<sup>(3)</sup> | $**3150417** | $3067793 | $2955938 | $2714445 | $2679431 |

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(1) Core loans are calculated as loans held for investment, net of unearned income less PPP loans.

(2) Adjusted core loans are calculated as loans held for investment, net of unearned income, less PPP loans and the acquired IOFB loan portfolio.

(3) Core commercial loans are calculated as total commercial loans less PPP loans.

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| | | |
|:---|:---|:---|
| **Contact:** | **Contact:** | |
| | Charles N. Reeves | Barry S. Ray |
| | Chief Executive Officer | Chief Financial Officer |
| | 319.356.5800 | 319.356.5800 |

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