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FINANCIAL UPDATE We are having a great year!


ROGER MEALY, Executive Vice President/Chief Financial Officer, Midwest Independent Bancshares, Inc.


rmealy@mibanc.com


Through the third quarter of 2017 net earnings of Midwest Independent Bank (MIB) total $2,054,000, delivering an ROA of 0.92 percent. Excluding a couple of one-time events during the first quarter which were accretive to earnings, ROA would have been 0.82 percent—still a nice improvement over our 2016 ROA of 0.75 percent. The adjusted earnings also represents a dollar profit improvement of 22 percent versus prior year-to-date. As a benchmark, the Bankers’ Bank target ROA is about 0.75 percent. MIB’s assets totaled $295 million at the


end of September, an increase of $7 million from the beginning of the year, primarily driven by an increase in our loan portfolio of $13 million. Loan portfolio balances continued to


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buck our historical trends during the year as we did not have the level of paydowns/ payoffs that we normally experience in the early part of the year. We ended this quarter with more than $136 million in gross loans. Our investment portfolio continued to


slowly decrease due to calls and maturities, and as our liquidity tightened over the summer months so we didn’t necessarily replace those calls/maturities. The portfolio ended the quarter at $54 million—a decrease of $5 million from the beginning of the year. We continue to work diligently in conjunction with First Bankers’ Banc Securities to keep our investment portfolio conservative and sound. MIB operates at a much higher level


than our asset size would suggest. At the end of the quarter, we had $4.9 billion in assets under management—consistently hovering around the $5 billion mark. This amount not only includes the book assets, but loans sold downstream to respondent banks, Fed Funds Pool, EBA Pool, and Safekeeping assets.


Our total deposit levels remained


relatively strong through the first quarter of the year as our respondent banks’ liquidity levels held fairly steady. Since then liquidity has tightened and our deposit levels have shrunk but we have maintained total deposits in the $210–$230 million range, back more in line with our year-end 2016 balance of $237 million. We continue to hold noninterest


expenses in check. MIB consistently has one of the lowest efficiency ratios among our bankers’ bank peer group, and we delivered an efficiency ratio of 66.4 percent for the second quarter, which was the lowest among our Bankers’ Bank peer group, and nearly 20 percentage points below the peer average. The second quarter is the most recent comparative data available at this time. MIB continues to be well capitalized


with a Common Equity Tier 1 Capital Ratio (CET1) of 21.1 percent, a Tier 1 Leverage Ratio of 13.5 percent, and Total Capital Ratio of 22.4 percent. Continual improvements are being made in credit quality which has had a favorable impact on our credit-related ratios. The Classified Assets to Capital ratio was at 3.7 percent at the end of September and the Texas Ratio ended the quarter at 2.7 percent. Both of these ratios show a continued improvement throughout the year. We look forward to finishing 2017


on a high note, and we are now starting to budget for 2018 and look forward to continued growth with solid performance. Whether it’s our great staff at MIB,


First Bankers’ Banc Securities, Inc., MIB Banc Services, LLC, or Midwest Independent Bancshares, Inc., we are all here to help our customers succeed and look forward to the opportunity to assist you.


4


MIDWEST INDEPENDENT BANK MIBANC.com


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