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MidWestOne Financial (MOFG)

Participants
Charlie Funk CEO
Gary Sims Chief Credit Officer
Barry Ray CFO
Jim Cantrell Treasurer and CIO
Len Devaisher President
Brendan Nosal Piper Sandler
Jeff Rulis D.A. Davidson
Terry McEvoy Stephens
Damon DelMonte KBW
Ross Haberman RLH
Brian Martin Janney Montgomery
Call transcript
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Operator

Good day, and welcome to the MidWestOne Financial Group, Inc.

Third Quarter 2021 Earnings Call. [Operator Instructions] The presentation contains forward-looking statements relating to the financial condition results of operations and business of MidWestOne Financial Group, Inc.

Forward-looking statements generally include words such as believes, expects, anticipates and other similar expressions. Actual results could differ materially from those indicated among the important factors that could cause actual results to differ materially, or interest rates, changes in the mix of the company’s business, competitive pressures, generic -- excuse me, general economic conditions and the risk factors detailed in the company’s periodic reports and registration statements filed with the Securities and Exchange Commission. Inc. Group, Financial MidWestOne to events or date or presentation. obligation statements of these to reflect circumstances publicly no update revise forward-looking this undertakes after the please being And event recorded. this note, is over like turn now would I the conference to to Mr. Funk. Charlie Please go sir. ahead,

Charlie Funk

Chief in morning Gary the Thank as Officer; good Officer; In call Credit all you, this the you for Sims, you room to afternoon, and be, morning. Officer; or thank Treasurer our and Iowa may Len joining Ray, very have Chief Chuck, President. Cantrell, of our Jim much, our and City, good we case Investment us Chief Barry the Devaisher, on Financial our

of overview we an announced Just yesterday. quarter acquisition and then the that the

ex quarter. a X% PPP more than in bit of that think I we’re growth very little linked summary, pleased loan we had

a continue negative good see about that of that happy growth, deposits. on growth I’m impact has interest the impact XX% and Clearly, to We core but on was net positive deposit income. a to report deposit margin,

Asset we positive will and well. as give I think quality going forward a outlook you improve, continues to

think and I did my And excellent have expense noninterest a company in and distorted It cover run comments. have also that onetime our prospective. few expenses we the was release. both earnings management, rate, we on wealth in in our I’ll an legacy story that covered

a team we a management our and yesterday solid that join what announced well-conceived opted is announced believe and also Eastern wealth company. Iowa to We also from has acquisition

that’s loans to of the to tick bit usage. credit during we were about the below terms we the in ex very increase despite that to be that I headwinds we over XX%. go up That with to of what LOC did faced usage quarter, PPP. be Line consider low if quarter, would XX% that, So at continues normal XX% able a pleased but

start as of in to and going past the continues we to that with will enjoy activity, to have continues be cylinders Denver, pipeline lending markets very we of terms all producing which in a seem terms In on hit forward. good

We hire think Twin Cities are to X market. the in starting and And in able commercial Twin pipeline see very the with the we’ve that months, footprint. good bankers next been X Cities very I a to growth pleased will over you good to from the develop

And And do our slightly remainder seen in of in the Naples Florida, have industrial as right terms and also well loan estate real really But I from say commercial or I the sold hard been have been as Twin said have our will good sold. outlook bring. perspective hires -- We either and as see to Southwest terms the what to We market. coming in that are the banking commercial Fort about down good company pretty loan think feel, payoffs quarter, it’s some as that the businesses, X- the the in to properties payoffs activity. flat businesses to -- commercial our our the of activity the said, Iowa see be Cities. Myers tends rest fourth earlier, from of fourth good We of sale growth. very X-month City all is now of hires we I in quarter

some to PPP into forgiven go year-end. percentage the to probably fourth loans be out quarter. stragglers In we of be as the we first But sheet quarter. we There expect expect will of bank off of terms our be balance PPP, and the the that a by of most essentially, would high in

$XXX,XXX. the that. note in revenue of from expect in we the but and was mortgage down of very expect to adjustment wealth do by quarters, that management. fourth quarter present servicing solid, at a from prior continues Top Mortgage a we they to my in the boom there’s income. noninterest We still traditional we to quarter, line rights Turning negative had prior would interest continue It Great -- good but And fourth a story, adjustment in quarter. are positive before where to the measure go time, opinion, if still hold rates some time grow. standards.

that’s investment record Our and in row an a to the records services for them. year unit, I each brokerage is this have all-time seems quarter our year, area, all-time will which continues LPL they set and it believe third

continued of see revenue much we top line that organic haven’t the and perhaps trust Our seen also department past. has in growth as to growth also some

better Cities year department. professionals work trust And over in XXXX. hired a recall wealth they them, expectation things in us will to ago, to X almost from even by management, are now, we hampered according and first produced for year in have nonsolicitation somewhat being our Twin things You help they in good expect agreements. despite the really the Those and we

Cedar the years to next And we market. is this private of Iowa a our Rapids X their we market. and to report this about been XX team X months. better X revenue think happy professionals management of I’m from and trust experience. who wealth not trust private to we of excited and second combined could wealth even the of day will banker, talking X acquisition good, returns XXXX in MidWestOne for them from beyond. of catalyst this it last and growth the be a be working at the as be will about part today, the over wealth a began And team have acquisition are of Rapids, These Bank, most and During City for quarter, in in see we employment very in XXX Cedar operating professionals X XX very, upside more X The early talent. to good banker talent professionals bank on coming significant X professionals, were have

income on the of pleasantly us to good. just revenue noninterest upside. components other would continues have that I surprise And card been The say

and calculate the that to interest core the and income. us, be core The margin quarter. revenues includes for margin net at to interest continues PPP that the note net that, would We in. the come problematic X.XX% for X% Turning

treasury continue for We of at We markets points echo idea couple this said little would balance competition. probably the of one in continues less And Fed. X-year but we to the that brutal we priced yield loans the and get invest rate solid in cash As that, saw fixed shorter us. expanded than an call at And credit very, as to the at you very that narrower higher a last area return brutal, the X.X% quarterly give would of expense a good loan basis margin. really that loan, referred the on rise the I to in and help excess update curve XX-year lot to of XXX into sheet of just the XX-year bit XX-year I quarter. call over cash a instruments, that’s interest think of certainly our yet X- fixed. time, before, on us weeks, flow mean liquidity, on last to but does the -- that cash net held our income, the we I beat we’ve give a which quarterly at pricing competition believe the

noninterest would themes. highlight Turning expense. I to X

second and America write-offs the We in have expect very, recurring we onetime about going the during a litigation the because most competitive that be And to some also that looking very new today, We theme building expenses. quarter. our it’s continue that into would probably be we building we on around salaries would themes. pressure had did see of hire first forward, businesses whenever note do factor settlements those $XXX,XXX to $XXX,XXX benefits be forward had and We people our be but don’t The vacancy of expect during company. bit write-downs higher quarter. to just as little we would

company, us some I the ahead. So in would officer could level able forward continue of one the the we Maybe in little salary people of I compared help at going that company will our have to in up past. the element what hiring expect XXXX, that call at be is very, to years positive attract to we very been we’ve good our increases success think, a really to And bit

a story hiring. So people to I at we tell have think MidWestOne, in we’re the good and reflected that’s

year. that be the would office, A and that the of theme that employees before company. we element closure that -- positive jobs with our announced office of did office end third just closed close all did in the of closing we that to be The is offered were note we one the expect

and we’ve X our and would We that offices X continue office. evaluate closed production offices loan since to XXXX, note

something a that recovery and focus So would asset to forward. analyze quality. to be ongoing will that in an net positive the for Very to us that story highlight continues continue we had quarter. tell we I for going

If at points special nonperforming in NPAs commend you and basis quarter we XX quarters down And our they ahead. assets, I X basis on points year-over-year. the were down continued they’re assets would the expect quarter-to-quarter, progress look notably, and unit. our

We’re to doing conclusion. a credits really good of many job of these bringing troubled

hotel there is seems classified profile is And note slightly. not hotel would in that’s a to undergoing remodel, chain one the are now. we assets be to coverage point in and release Florida. the up with that due occupancy, that at in appropriate caught really that’s the problem that were for right risk our our very issues located I supply time. they but Our earnings And reserve in reported the And this

not to long-term this don’t during particular to really of be it is the it so but quarter. classified did we problem, We and full at think good, And to a hotel status able move expect the operate capacity. chain management we very

and So in results our months. as commend that’s short the year. will last over fine. think this be we agriculture, don’t XX year will also term And do Credit Officer, that just Ag, it really Gary our had XX term, results. a -- negative on very to we the next our I pain. XXXX. X short-term it Chief or bankers reflected asset enter be of Sims, staying see in for think Long We anything of think I I quality, on so improved reflected horizon months good a has top little and

That Tangible fine. capital. equity now suits just X.X%. to sits us at Turning right

that’s our quarter, especially our that roughly stock remains with outlook, our of fine improved quarter And we shares given last comfort the as long and tangible on announced and during just terms adding and think Regulatory we will build profile that equity equity bought to X% think risk note in, purchased our we capital acquisition XXX,XXX so continue preferred to capital X% shape. to day over the X.X% zone. current almost good in we is during fit value the levels. last credit I But we’re back was think I available in shares our deck. repurchased were of quarter. at do book that each XX.XX, each

when repurchase to continue we think will conditions that We warrant the that.

to Bank of a National just recap. in now small banks; operates Iowa. X Iowa X Muscatine, of Iowa, First the Iowa a Fairfield, First Turning larger First National the First short the is and recap Bank banks, acquisition, or which

And years. Iowa We market. Fairfield better over markets X Fairfield past -- us MidWestOne in at of are growth or the one has we X rural for market are been in the already the the

have that We completed, West Muscatine We if into acquisition banks footprint. will good has cultural we Cities. in good a leading whatever will assumptions Jefferson we use would were in the Iowa. Clearly, already not as we in are evaluated south Liberty, thought also had did conservative way And fit, where and office what folds diligence. completed, was community Iowa, we make Iowa, selective see They’re of than in note When Muscatine fit. market particular And Southeast whenever we we Iowa, be see transaction. could did the miles just more Muscatine have the something which sure that Quad we’ve due of beneficial National for right is #X pay in the we share and to located. evaluated strategic and been the credit about that a This County, is County XX from acquisitions First MidWestOne deposit also at this be our to our thorough, I thorough we one and an a Fairfield long is transaction Muscatine. is in County, shareholders. modeled that we’ve existing

I and be very and were we to One any transaction about we Bank XXXX earnings of to last retain to this us did our that Muscatine XX-year that not National Wayne of think a also We’re look we a And currency Johanson, transaction. in our market pleased think First was give visibility as employee, XXXX. key this I much up thing gives president. to this able better

respected of the to is outside expect to in from merger us bank, He’s inside leader. be invaluable a we and and Going approval regulatory He’s through the that forward, leader integration. think a we And as will authorities. timely go Wayne both the seek we bank. Wayne’s do community assistance

everyone think good are in in summary, our wealth years we our Again, the is the second very coming, And had -- think our a in in the the I we presence remind have management And very a of promising to of an now outlook the bolsters just in presence unit and little company. Cedar We Twin both or in Rapids, markets. terms already that that fourth call quarter we I strong think, the Denver acquisition and bumpy for as which So management a the in is -- X would largest growing no X-month the in have state. Twin is company. we Cities but X- strong that Iowa payoffs in on city wealth pipeline wealth outlook probably Cities. loans and a ago, because

we improve which, acquisition continues appropriately, I argue which as the are And our has X better good a and think earnings during important past to little risk improved us of said, in bit gives quality significantly are leveraging manageable with that to shareholders. a Asset in I’ve outlook, visibility. would a -- XXXX, profile We think years. I company we again, during the folding our capital our is

we ready take think and So with questions you might we I will Q&A, Chuck, are for that, have. any

Operator

come Nosal question And Instructions] Sandler. with Brendan [Operator first from Piper the will

Brendan Nosal

off start here. on on to just team Maybe M&A the

this was in of to the bit deal, transactions And deals one. after a those last larger smaller a sooner your a with do marks past, between good deals. I more think obviously, in approach bit to but time bit little a the

kind a markets? more add of was opportunistic curious smaller purposeful to playbook just strategic of is the that in this of So M&A those partner shift or an a if chance if the start just in

Charlie Funk

on First bit so us. and seemed to I latter, But front size. that XX was intended to one pass. And opportunity, but off think think my the us. I just that are timing we the evaluate remarks, avoid we with larger know them always fact ones -- we be out very our we and them the in to and last set say kind best to smaller I a that that opening of was we’ve to tended had that’s -- prior this that well. and of had had one this don’t And I -- willing I done we to be it to don’t would the And appropriate Iowa think it’s the acquisitions I know be in for relative think Brendan. the for appropriate transactions, what little I we’ve for discussions larger years, any but the done has came X been more

Brendan Nosal

That’s but credit a of All they’re mentioned does And resolve issues color. it in on Maybe helpful very overall, kind size your there. you color at just of to it’s a me. through I smaller thorough those a working folks know more process. guess few right. terms diligence I Maybe for First. little seem trying from a like and one that Iowa you deal bit asset very quality more

have efforts in to and deal walk cleanup folks think any you once just undertake closes. you us the what through portfolio that saw their So might you

Gary Sims

Gary here. Brendan,

what we recognize took proactive recognize couple, credit on we well, diligence. challenges as X, some due past they that the you in have had given clearly So a the to the approach side years, pretty X

we the and resolutions place they though actually definitive problems, issues signing -- and in before LOI we initial we acknowledge obviously acquired our their once of did the acknowledge seen -- a, on our we’ve, you to a is recognize Based LOI, due the the are. of the marks they due Our in list with to what through that that relationships work an of of initial banks, it, they’ve between engaged was Muscatine from review then got was we’ve and XX. the we those to Throughout more in due of down And before of one-on-one then diligence talking last mark LOI we on of And review one include that based that see portfolio; so would impress resolution -- in believe ultimate well I them signed which work, that a file credits say And LOI problem feel stop due obviously is we transaction. once credit. on ability and -- one the I’ll was each request things Fairfield have leadership we that in was and that. we the And what and down to nonaccrual comfortable on and credit. initial approach ability the diligence recognize diligence X resolutions diligence our based side. it, commercial agreement. in credit accordingly we what the that that then still did We’ve review, were for really identified towards us actually and that resolution. very b, them on took signed credits got both the -- credits credit of This watch put did in-depth ran the thorough review the the leadership the drove the on is process, couple even the the team the the development signed the And subject. a banks credits very had as a all from as while on thing the

all we but we’re we’ll good through, we there’s problems direction told, work going with So recognize to there. partner feel some about the them that

Operator

The next question with D.A. will come Jeff from Rulis Davidson.

Jeff Rulis

Charlie, the start sounds fairly the or the on there? outlook just convert. the regulator maybe this you’re miss quarter, of I of you with -- conversion timing but transaction. well, a by up I in when on to expectation positive It the like Did done date first timing following get to wanted just

Charlie Funk

always the the XXXX. closing quarter talking we end I to Well, But end to to we conservative X now, would around first It would think change. sometime or of the first February, quarter quarter, that, our the give right in close be the we’re of about be right approach But system. be It expect to that And used April. be for could the the but we of can say third convert how would on could now bank that the transaction. still might banks the each happen take.

Jeff Rulis

Great. the got you’ve preferred on view you you And staying the comfortability on you side, then, X%, pending as X% and capital the here, TCE continue a touched buyback How do or area. the active? you pump the to Charlie, brakes on transaction

Charlie Funk

active might shares, during we these levels quarter. degree I the discontinue repurchasing will active. to shares be at continue don’t what But but we expect to we buying the to will think be what back our question be our

range. shares in in recognition that’s TCE range to quite moving not many X.X% the as X.XX% maybe of However, the

Jeff Rulis

me PPP, trends broad and on the as -- last ‘XX. that just core winds the with margin just level core down, includes one expectations mentioned Okay. as X.XX% PPP specific you margin, or into I for think either on And

Barry Ray

includes got all the Jeff, release we’ve PPP Barry, information start. earnings the Yes, in the information. that I’ll

down as core think, there. you have the of in down about and what on bit basis assets X. the true view up that accounting, We a and we it was said, we kind points prior was PPP a and a was points. is the Charlie earning the the I assets take X.XX% would all out at the Reflective earning that the purchase X fact of little landed quarter, we As cost if fund couple of of X.XX%, basis call from yield margin,

seeing we’re on reprice benefit the side what lower. liability So is the really continuing time to from deposits

to The margin liability helpful. what to because will side the with And could the so see, respect side go-forward benefit that’s attenuate. we on the the ultimately been obviously, on asset pressure be start

originating extent margin continue the on the side coupon. happens loans, asset the bit to we at I pressure is example, portfolio could downward little say. what below to There our say would on what be to continue asset pressure the side, would currently, that so and see So are and I a on for that we

Jeff Rulis

Okay. brutal the And I think loans. you on mentioned pricing

deploy overall, mix Reinvesting, of that if continues earning the bit. on some assets of a you more in So that like for I guess it interim? maybe it’s pressure net kind a on sounds a question then, cash. of But

Barry Ray

That’s how view I it, would yes.

Jim Cantrell

is I whole This have is a Jim. don’t -- this Jeff, lot add. to

I right is on think Barry it.

the If what’s the slight on And investment downward there’s loan yields, we there yield, basis in fund X yield. on assets. cost on going in you earning points the last -- movement loan look portfolio downward a the quarter, down of were is at movement slight on

And mind we that moving slow And the the move get is deposit closer CD the going basis runway there’s probably down to my just in So is to only have that a we terminal it’s points. on category really side XX of value low worry how as we that’s that, good. can decrease. that’s I rate book. that. are running But on out I of

to challenge So as mentioned, an have flat a we’ll probably Charlie the little income think quarter, a beyond possibly, itself, flat basis down up look of points little a production I a bit. to may think But side. we loan interest that, bit. a asset. be it at margin next on I I -- of net couple little may turn into the But And and up bit if income, in but

Operator

with McEvoy Terry Stephens. from come will question next The

Terry McEvoy

the and million items next about quarter. hiring a the remarks, If the about I’m How press back release Charlie’s Maybe new expenses. I the the the management third inflation, in we start help in few think wealth given team? topic. that with on Maybe $XX.X out the in on commentary us quarters question should prepared wage noted on of

Barry Ray

rate out alluded Terry, but I a run you that those release, earnings the can kind we think the utilize past, rate what talked fact to that we’ve highlighted larger. is increases, a items I’d But -- we be upward some on core that normal back expense get size of I I that. Charlie and think the backing be that could merit you you. those say bit I number those press a in items the the a increase that’s about for what -- the normal to out that merit the -- adjusting share bit. increases feel if that in you in that’s would run expect of release on good we to to with side those adding there compensation as what number could like highlighted do The pressure could

Terry McEvoy

I guess news, the I’ll surprised on when were and maybe just where quarter. I at then ratio, efficiency a could you the I cost And looked little believe that Understood. XX%, saves just third acquisition the there. just I outlook bit the third that Iowa was And XX% quarter? expenses were was XX% conservative being cost some come do savings? your about elevated you at the with up First. ask you in There that talk But

Barry Ray

of costs, cost legal believe of and personnel-based up to in be the data come then than and acquisition, number anticipate processing, with you with rest would with professional, a it Yes, a of very cetera. to going from XX% we where down achievable of respect we respect goes is half savings kind that. is et the that to there typical things that certainly, More

the very believe disclose so XX% And is story achievable. the is we we that

Terry McEvoy

to then or like banks a up. present those if expand the deal actions that do outstanding deal lastly, owned looks seller guess, -- the the pulled risk I anything closes? have could, of when between I both Maybe now by some OCC it just I closing And and the

Charlie Funk

delays We do have in done on diligence we and expect our that, not approval.

Operator

The come will with next KBW. from Damon DelMonte question

Damon DelMonte

My growth outlook. first question loan regarding the

be message So here to expecting is just probably the fourth quarter, slightly the elevated to payoffs? the Charlie, balances flat that down given loan in you’re

Charlie Funk

to Yes. but we give payoffs because we also see I some do that didn’t have on know how decent guidance a pipeline, coming.

and that. X flat to the of plus is middle right minus lack of guidance maybe for in X better So a

Damon DelMonte

it. Got

Okay. Do you X you last X couple months. mid-single-digit optimistic seen seemed to And the you growth that quarters? looking get we’ve out then back to think rate of that

Charlie Funk

Yes.

that the early like the are think lot a be I but as enough the I hire track growth bankers but like good think we’d -- Twin can’t has to returns in years. in still what looking a we’ve going XXXX to depends whole for the our and in from And course, underperformed the market, couple last more, hired a the of see company loan are to see economy, on Cities I that X% really to of bankers from X% which with emphasize we’d proven good company. to records, and couple we’re again, anywhere

Damon DelMonte

Got it.

team you a that of book any there hired, of regards they wealth management that? do associated noncompete Okay. to with business much roughly have? how And then are the with And

Charlie Funk

What was Damon? the part question, last of your

Damon DelMonte

Is any there associated noncompete with of book business? that

Charlie Funk

their agreements, -- that Yes. business. the made book had going than of wealth even the very, other an our I Iowa word to in interesting I I’d announcement, very it’s out their X think, for they -- good to year. a the that said, the honor X XX the over to Eastern was in response say months, company institution, nice Clearly, they is needle the will the of for particular at of to is amount Cedar nonsolicitation And book market. business be up you the think agreements. the I as before an But pointing hesitate X Rapids tenure and And have next long they had they this again, next of give nonsolicitation management. in

Damon DelMonte

it. Got

sizable gain pretty a at the there’s Okay. Barry gain, bit? back a going kind purchase and of accretion bargain And expected explain lastly, Could deal, then to $X.X million. it’s little looking XXXX, just of that the BPO just a in

Barry Ray

Barry, Damon. value. this is book Yes, Yes, paying low we’re

gain the understanding So typically what’s I’m driving of related referenced answer Damon? press the that’s XX%. Does in release. that the it gain what’s correct, record correctly. accretion portion in than from closer or the And goodwill. period, future -- to driving rather XX.X% That’s goes your is the you’re we that a question to that’s the accretion your And you that why would down question, XX%

Damon DelMonte

that just I but clarify wanted no, it clearly, it exactly. didn’t to Yes, clearly. you does, probably ask point. I it explained

So we’re all set.

Operator

next Haberman question RLH. come from will Ross with The

Ross Haberman

your just -- many On you room much X That’s rates first I guys close to had out? where there further the much deposit banks, is bottom to quarter like forward the or next are or over is very X question. lower going my questions.

Jim Cantrell

Ross, this is Jim. I would answer that.

terms nonmaturing largely, our I reached checking in of accounts market and like marketplace. accounts, in accounts the money value -- of terminal accounts, types even savings think we’ve of we’ve bottom kind

priced is bit competitors The low we’ve where those of movement downward of seen CD rates. in at book little are are rates. with area We where even business only pretty a the

But CDs a maturing an here. that’s that rolling comes We’re little a end than probably they’re where to off. to reprice game bit continuing lower

book book yield that think basis XX the serves, As CD below I memory is points.

XX to think we’re closer we see that. to get going I book, CD an to end As on the

some be out of just kind next then the And there. without in bottomed leave X. dramatic probably that’s or change. it quarter So I’ll we’d

Ross Haberman

negotiated? -- about deal one quick was One, Or type process? X questions announced. the was you just just auction and of it an it a And

Charlie Funk

negotiated. was It

Ross Haberman

asset quarter, an want in were of quality, to or or between you questions in the the do in and that say, that should the to quality bank. anything have first for like Okay. anything you terms And of worse close Do on asset out? terms you an lot it supposed got you adjustment, it drops, past risk an is there it for I now If say? you when in drop, have out like the might outs deal A you’re that? of of

Barry Ray

This is Barry.

tangible price book value value that target there -- reduction and to dollar-for-dollar tangible the certain We to value, is for value closing for for below also us. Those as do out loans, we also an the out that book amount extent some below there’s book the book tangible we target, a have related pass-rated have If have. deal. any minimum a decline in the a dropped in announced have are is a a of a as couple to examples minimum It’s well. then -- certain that outs that’s below of tangible we

Operator

Montgomery. The from Martin will with come Brian Janney next question

Brian Martin

just of earlier, -- baked couple reach how here and don’t or one margin upward. thinking the of that? think sure pressure. got We’ve Barry begin Just know just what’s of some of the takes back what’s for deposit maybe X and with on about I when of guess, Jim, guess you’re kind are the in could kind or an of inflect happening I’m And comments might of I But to I the when inflection it when whom, flows? trending sheet a your quarter kind deposit kind to thinking question I mean, margin then kind but kind the margin, puts do a drivers how I today? point balance of you not just guess, itself. you’re just either flows maybe of the on And maybe but or the

Jim Cantrell

And He pretty thoughts some have I’ll and start I and well. is Barry Jim. this may as this margin regularly. the discussed Brian,

if I to serves, probably consumer X% deposits. been, I memory on deposits, nonpublic if of for that the So is in look X%. we’re But funds. growth terms of public and fund commercial A about X%, growth, at in X.X% the think of big end has still talking about deposit deposit since year chunk

seen number. off So really We indication that’s in I lead you any pretty see -- we’re haven’t don’t believe a good drop a going to see would to that deposits.

mark the sit -- today, we we’re for at on sheet. here we total as here sit deposits So high-water balance

and the think in then quarter high is will we second as of in least it fourth the going quarter beyond for were net as at my part and interest to be that’s So quarter. that reason -- third maybe comment -- third be the I income

it securities, of out. have loans deterioration basis they and pretty mean positive we’ll they’re but net now, each the may almost space, and established, and other those pretty mean at the margin. of on margin, like like the where I stay major I in components interest And if yields and be trends canceling it’s amount, well a much it’s are would margin, were are I the some So look noise. flat to income. we balances see small or assets. point a The in I in think X for trends X based fluctuation

is to the be downtick change a enough any to might, And larger the to probably balance So from margin but we in see in we in going not we’ll change income quarter little -- the income sheet. volume. increased fourth have offset due

a larger forward, sheet see just as move balance I we slightly which balance, helpful. is larger So

Brian Martin

Okay. would think start pickup, of you be when little And guess guess, kind driver? when that’s I a potential? as far to maybe I the of, would guess, some -- you as I what see bit

Jim Cantrell

little impetus. slow an slowly positive. we Charlie and it tends in positive, X%, stays growth, curve loan steep be Well, be now, see to would see be could as buying you coming. see happens mix also favorably asset to we’ll that stop but if in That And the as net be change that and The rising can will a It it I think year-over-year, for said, rates. I would that think once start see we securities, is I -- time, then think us. but X% helpful, over we yield

Brian Martin

just And just on whomever. helpful. That’s one reserve Perfect. side, or maybe Okay. the Charlie, just

we just the at we quality, kind do positive the signaling now where kind better. here of good getting here? you’re of of and How least kind move about story as levels think reserve forward Just what credit it’s as given

Gary Sims

pandemic. then answer and reserves -- reflection school. appropriate. of start pandemic we’ve what beginning our Gary, dealt as talking from But to seen the is a of, the recognized in of the we the is economic the We’ve out at I’ll I really you’ve the that we those reserve managed start that and take if large took a This reserves we’ve we question. through as conditions step have accounting deemed released Barry, as improved,

have course, guides it the model, we that and utilize, that direction a a Of CECL model we we go.

-- on And model the momentum do in to economic in continued we’re today, terms a we in the by go-forward quality, of as driven forecasting will turns what Charlie basis. out of be expect itself. to seeing asset it so a based improvement continue be what But on was the that continue portfolio saying, the lot in trend to

Brian Martin

just -- the kind back -- you guess to or the are And that where that targeting recover? I X back today, CECL Yes. economy continues you things if you of kind it day was? are is trend -- how is to go of of would view Okay. kind where that given towards assuming is

Gary Sims

it mean that Yes. where the I our is really pre-pandemic. it economy of kind now is right not perspective on was

I so to going we us of have see pre-pandemic. think more reserve And bias carrying towards really kind bit that a you’re than had a

Charlie Funk

an terms Brian, coverage. perform those circumstances when levels. to been reserve And are now. those XX of in that, place absent X a right where is drop below probably given X XX XX the as XX range acquisition, we good X But we’ve any such traditionally, in think Yes. I to you X sometimes

Gary Sims

Yes.

Barry Ray

Yes.

Brian Martin

that new And the -- up guess, Charlie And Understood. kind maybe just but in, we how Perfect. months? should just how over I income just for that how progressing how maybe the then fee maybe we then wealth fee contribution baseline X maybe about the of the team, on side? just outlook we or frame XX for the think -- just think the should Barry, from think about Okay. X, next or weighs last the maybe on if

Barry Ray

I’ll Brian. start,

potentially a that would we’re we’re be us so to mortgage over to, alluded near what for as from with headwind card respect levels I income above banking, But bit think with as and management term. the wealth a performance respect to fee I could as we’ve historical also, good income, little call Charlie still revenue. fee for really, well I that anticipate getting

are there takes that by we’re at probably was good some servicing, quarter right. to But And and mortgage the And little compared going mortgage bit levels. is so income revenue that historical there. the impacted levels puts elevated I still to obviously, the levels fee acknowledging in mortgage are forward, anyway, pretty a contemplate probably the this think servicing

Brian Martin

it sounds but... on, early Okay. it back as is comes team some as ramp-up board, things of this I you -- like the starting potentially more far wealth you’re year? just half to And guess as on good the I mean, see started

Charlie Funk

we November I’d free see the are you’ll the a the won’t you I be here XXXX. that where Yes. bit in say, see because whoever because the will probably to much fourth wish. they gone There’s Twin call the Brian, of on quarter in probably in think X. on sit folks And there. Cities boost little nonsolicitation quarter And agreements bigger those are first

sloping a it in terms line So in I top would of trend foresee -- XXXX. think revenue hold and it’s gradual being we upward

Brian Martin

Got you.

Barry. else expect item? accretion, lower. Okay. just -- I then was nothing to was creep just last to Is should to continue that on on me just that Perfect. And just continue line for one guess going that’s

Barry Ray

story real Yes. that, new Brian. No on

Operator

session. closing the back any question-and-answer I ahead. turn over Charlie remarks. to Funk Mr. would Please our conference go concludes for This to like

Charlie Funk

-- about great what’s received season. for the this excited you month, MidWestOne, thank we to all wish Chuck. we’re send we it everyone and the Well, rest of We happening call and a good questions morning. a this thank all question I’ll of in back you, joining Thanksgiving the

Operator

The attending conference concluded. now Thank presentation. has today’s you for

You may now disconnect.