MidWestOne Financial Group Inc (NASDAQ:MOFG) Q4 2019 Earnings Conference Call - Final Transcript

Jan 24, 2020 • 12:00 pm ET

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MidWestOne Financial Group Inc (NASDAQ:MOFG) Q4 2019 Earnings Conference Call - Final Transcript

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Executive
Charles N. Funk

not willing to meet the credit terms other institutions were offering. And then, and especially in the ag sector, we have been able to work some substandard and problem loans out of our bank and when those leave, our loan volumes go down. I would also mention of note that our Denver market had large unexpected pay downs on their lines of credit in the fourth quarter. It did not involve loss of customers, just in the normal flow of business, but these were unexpected and certainly hurt our loan volumes.

And I did talk this morning to one of our Regional Presidents in the Twin Cities who reported that from their perspective business has been slower in our [Technical Issue] in November-December, but reported that as the calendar changed into a new year that the outlook might be a little bit better. So, as we look at 2020, we have budgeted 5% loan growth. We have a decent pipeline, but I think we will see some other opportunities to evaluate deals during the first quarter and that would be especially true in our Denver market where we have a number of opportunities that we will be looking at over the next 30 days to 60 days. Better news on the balance sheet would be that this was a very good year for deposit growth, one of the best I think in the history of our company and the reason I say that is that in the legacy MidWestOne footprint, every region saw an increase in deposits during the year and I think what's especially gratifying and noteworthy is that the rural markets and we do serve a number of rural markets, but in our regions that comprise rural markets, they were some of the better deposit gatherers in 2019. That being said, the Twin Cities footprint had a good deposit year as did our two Florida offices as did Denver and I go back to the fact that we want to build our franchise on our core deposits and over the long term, we remain very confident in our ability to grow our loan book and I think we will continue to do that and see progress again in 2020.

One thing that I would note for the call, one of our strategic objectives for 2020 is we will be hiring more bankers in our Denver market. We think there remains a significant opportunity there and I would remind everyone listening that we have mostly commercial and industrial loans in that market, which we think gives us a good balance to the commercial real estate loans we have in the Twin Cities. We've already hired a couple of very, very good support people in Denver and I think during the first quarter, we will be able to add a couple of bankers and I think that will manifest itself with better loan volume in that market in 2020, '21 and '22.

Good year in my opinion for non-interest income.