MidWestOne Financial Group Inc (NASDAQ:MOFG) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 12:00 pm ET


MidWestOne Financial Group Inc (NASDAQ:MOFG) Q2 2020 Earnings Conference Call - Final Transcript


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Good day and welcome to the MidWestOne Financial Group's Second Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Charlie Funk, CEO. Please go ahead.

Charles N. Funk

Thank you very much, Sean, and good day to everyone and thank you so much for joining us on the MidWestOne second quarter earnings call. We're calling from Iowa City as we always do today. And in the room with me is Barry Ray, our Chief Financial Officer; Gary Sims, our Chief Credit Officer; Jim Cantrell, our Treasurer and Chief Investment Officer. And we also welcome Len Devaisher, our new President and Chief Operating Officer, to the call today as well.

I'll begin by reading the forward-looking statements and just remind you that this release and this call will contain certain forward-looking statements within the meaning of such terms in the Private Securities Litigation Reform Act of 1995. 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.

Forward-looking statements are generally identifiable by the use of words such as believe, expect, anticipate, should, could, would, plans, goals, intend, project, estimate, forecast, may or -- and may or similar expressions. Additionally, we undertake no obligation to update any statement in light of new information or future events except as required under federal securities law.

And with that, I would like to offer a few opening comments and just say we think this was a good quarter, the second quarter, for our Company. We recognize there's much uncertainty in the world today and we expect this to continue for the foreseeable future. We're planning for that in all that we do. So we take this quarter-to-quarter and again, I thought that there were many positives in the second quarter. I will offer some general comments and then turn it over to Barry Ray and Gary Sims for further comments.

Thanks to PPP and other programs, our assets rose to more than $5.2 billion during the quarter. As we indicated in the earnings release, we did $345 million roughly in PPP loans. We also recognize that there's significant earnings volatility in our industry and there's less focus than usual on earnings metrics. But with that said, we're very pleased to report a 13.5% return on tangible equity for the quarter and efficiency ratio, as we calculate it, under 55%.

Clearly, our margin, as most margins did, suffered from a mix change as loans paid off, plus we did have excess liquidity created from all of the government programs. For -- just for your information, we do calculate that the all-in yield on the PPP loans was 1.70% [Phonetic] in this quarter. We are -- as with many, we expect that forgiveness will occur in the fourth quarter of this year. And we think the fourth quarter will shape up to be a pretty good