Executive Summary

Q3 2025 delivered solid core performance: Adjusted EPS rose to $0.87, net income to $17.0M, NIM held at 3.57%, and ROAA improved to 1.09% as C&I-led loan growth and deposit inflows continued .
Against Street expectations, adjusted EPS beat by $0.05 vs S&P Global normalized EPS consensus ($0.87 vs $0.82*), while revenue (company “total revenue, net of interest expense”) modestly missed ($61.3M vs $62.9M*), with a negative MSR mark and softer SBA gains partially offset by stronger wealth fees .
Credit remained the swing factor: NCOs spiked to $15.3M (1.38% ratio) on a single previously reserved CRE office loan charge-off, while NPL and criticized ratios improved sequentially; ACL fell to 1.17% as the specific reserve was released upon charge-off .
Capital and TBV strengthened (CET1 11.10%, TCE ratio 8.36%, TBVPS $24.96); deposits grew 1.7% q/q, and the share repurchase program had $9.4M remaining as of 9/30/25 .
Strategic catalyst: MidWestOne agreed to be acquired by Nicolet Bankshares in an all‑stock deal valuing MOFG at ~$41.37/share as of 10/22/25 (0.3175 NIC shares per MOFG), creating a $15.3B-asset Upper Midwest franchise, a key driver for stock narrative near term .

What Went Well and What Went Wrong

What Went Well
- Core earnings strength: Adjusted EPS $0.87; efficiency ratio 58.21% despite higher expenses; NIM steady at 3.57% as core NIM edged to 3.50% .
- Fee momentum where targeted: Wealth/investment services & trust up 10% q/q and 19% y/y on higher AUA; service charges up 11% q/q .
- Management execution and strategic positioning: “Return on average assets reached 1.09%, driven by solid loan and deposit growth, expanded noninterest income and disciplined expense management,” noted CEO Chip Reeves; C&I loans grew 10.9% y/y with rising treasury management revenues .
What Went Wrong
- Credit cost volatility: Net charge-offs surged to $15.3M (1.38%) due to a single CRE office credit (previously reserved in Q2), tempering otherwise improved NPL and criticized ratios .
- Modest revenue miss vs consensus: Company “total revenue, net of interest expense” grew 2% q/q but trailed S&P Global revenue consensus, impacted by a $0.6M negative MSR revaluation and a $0.3M decline in SBA gain on sale .
- Expense uptick: Noninterest expense increased 5% q/q, driven by compensation/benefits normalization post Q2 ERC credit and a $0.655M loss on debt extinguishment tied to subordinated note redemption .

Financial Results

Overall P&L trends (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenue, net of interest expense ($M)	57.575	60.231	61.261
Net Interest Income ($M)	47.439	49.982	51.008
Noninterest Income ($M)	10.136	10.249	10.253
Credit Loss Expense ($M)	1.687	11.889	2.132
Noninterest Expense ($M)	36.293	35.767	37.637
Net Income ($M)	15.138	9.980	17.015
Diluted EPS ($)	0.73	0.48	0.82
Adjusted EPS ($)	0.73	0.49	0.87
NIM, tax-equivalent (%)	3.44	3.57	3.57
Efficiency Ratio (%)	59.38	56.20	58.21
ROAA (%)	1.00	0.65	1.09

Actual vs S&P Global consensus (Q3 2025)

Metric	Actual	SPGI Consensus	Surprise
Diluted EPS (GAAP) ($)	0.82	0.82*	0.00*
Adjusted/Normalized EPS ($)	0.87	0.82*	+0.05 (+6.1%)*
Total Revenue, net of interest expense ($M)	61.261	62.933*	-1.672 (-2.7%)*
EPS # of est. / Revenue # of est.	—	5 / 3*	—

Noninterest income breakdown

Category ($M)	Q3 2025	Q2 2025	Q3 2024
Investment services & trust	4.059	3.705	3.410
Service charges & fees	2.423	2.190	2.170
Card revenue	1.752	1.934	1.935
Loan revenue (incl. MSR)	0.924	1.417	0.760
BOLI	0.703	0.677	0.879
Investment securities gains (losses), net	—	—	(140.182)
Other	0.392	0.326	0.640
MSR valuation adjustment (in Loan revenue)	(0.611)	(0.264)	(1.026)

Balance sheet and capital

Metric	Q2 2025	Q3 2025
Total Assets ($M)	6,160.773	6,249.752
Loans HFI, net ($M)	4,381.188	4,419.628
Total Deposits ($M)	5,388.098	5,478.996
CET1 Ratio (%)	11.02	11.10
TCE Ratio (%)	8.19	8.36
TBVPS ($)	23.92	24.96
Cost of Total Deposits (%)	1.91	1.91

Credit KPIs

Metric	Q1 2025	Q2 2025	Q3 2025
Net Charge-offs ($M)	3.087	0.189	15.332
Net Charge-off Ratio (%)	0.29	0.02	1.38
NPL Ratio (%)	0.41	0.85	0.68
NPA Ratio (%)	0.33	0.66	0.54
ACL Ratio (%)	1.25	1.50	1.17

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Effective tax rate	FY 2025	22–23% (Q2 PR)	21.5–22.5% (Q3 PR)	Lowered
Noninterest expense	FY 2025	$146–$148M (Q2 call)	No update in Q3 (prior guide remains)	Maintained
Dividend	Quarterly	$0.2425 per share (Q2)	$0.2425 per share (Q3)	Maintained
Share repurchase	Program size	$15.0M auth.; $13.2M remaining at 6/30	$9.4M remaining at 9/30	Utilized further

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not available in the document set; themes below leverage Q1/Q2 disclosures and Q3 CEO commentary.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Net interest margin trajectory	“Grind higher” expectation; +13 bps in Q2; drivers: higher loan coupons, repricing, some deposit cost relief	NIM held 3.57%; core NIM +1 bp to 3.50%	Stable-to-slightly improving core
C&I growth focus	Strong pipelines, talent lift-outs in Twin Cities & Denver; mid‑single‑digit 2H growth expected	C&I balances +10.9% y/y; overall loans +0.9% q/q	Positive
Wealth/fees	Wealth rev. up q/q and y/y; SBA fee doubling y/y YTD	Investment services & trust +10% q/q, +19% y/y	Positive
Credit/CRE office	Q2: single large Twin Cities NOO office loan to nonaccrual; reserve built	Q3: $14.6M charge-off on that single credit; NPL/NPA improved; ACL down post CO	Cleanup progressing
Technology/ops efficiency	ServiceNow/OneConnect, commercial digital banking rollout planned	Continued “disciplined expense management,” efficiency 58.21%	Ongoing execution
Strategic M&A	“Better before bigger”; M&A conversations contemplated as metrics improve	Definitive merger with Nicolet; all-stock, pro forma $15.3B assets	Transformational

Management Commentary

CEO Chip Reeves: “Return on average assets reached 1.09%, driven by solid loan and deposit growth, expanded noninterest income and disciplined expense management... our complementary wealth management business... increased noninterest income 19.0% from the prior year” .
On the Nicolet transaction: “We are absolutely thrilled with the announcement of our partnership with Nicolet Bankshares, Inc. that will create the pre-eminent Midsize bank in the Upper Midwest” .
Credit cleanup context (from supplement): “The increase in net charge-offs during 3Q25 is primarily due to the $14.6 million charge-off on a single CRE office credit that was reserved for in the second quarter of 2025” .

Q&A Highlights

The Q3 2025 earnings call transcript was not available in the document catalog (the company noted a transcript would be posted within three business days) . For context, Q2 Q&A focused on: (a) isolated nature and expected resolution of the large NOO office exposure , (b) NIM “grind higher” trajectory with 4–5 bps per quarter expected into 2H (subject to Fed path) , (c) SBA gain-on-sale quarterly cadence (~$0.5M/quarter) , and (d) capital deployment priorities including opportunistic buybacks and disciplined M&A .

Estimates Context

Q3 Adjusted/Normalized EPS beat S&P Global consensus by $0.05 ($0.87 vs $0.82*), while GAAP diluted EPS was in line with Primary EPS consensus ($0.82 vs $0.82*). Total revenue, net of interest expense was modestly below consensus ($61.3M vs $62.9M*) with 5 EPS and 3 revenue estimates informing the consensus .
Street models may lift FY25/26 core NIM assumptions modestly given stable 3.57% NIM and rising core NIM, but may temper noninterest income (MSR/SBA variability) and maintain a conservative credit cost stance post the single-loan charge-off .

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

Core profitability trend intact: NIM stable, core NIM edging higher, ROAA >1% and adjusted EPS growth demonstrate durable earnings momentum as balance sheet remixing and pricing discipline continue .
The one-off office credit moved through P&L: a large charge-off was absorbed and key asset quality ratios improved q/q; watch classified trends but near-term loss recognition appears largely addressed .
Fee diversification is working: wealth revenues are compounding with market/talent tailwinds, helping offset episodic MSR volatility and SBA lumpiness .
Capital build plus deposit growth provide flexibility: CET1 11.10%, TBVPS up 4% q/q; deposit growth (incl. +$47M NIB) and lower borrowings de-risk funding .
Merger with Nicolet reframes the stock: deal terms (0.3175 NIC per MOFG) and pro forma scale/efficiencies are likely the dominant valuation driver near term; focus shifts to timeline, integration, and synergy realization .
Model updates: consider slightly higher core NIM run-rate, modestly lower noninterest income from MSR headwinds, normalized credit costs post Q3 charge-off, and lower full‑year tax rate (21.5–22.5%) .
Trading setup: near-term performance likely tracks deal spread and banking sector sentiment; fundamental upside longer term tied to fee momentum, C&I growth, and integration execution .

Sources: Company 8-K press release and financial supplement (10/23/25), earnings slides (10/24/25), Q2 2025 press release and call transcript (7/24–7/25/25), Q1 2025 press release (4/24/25), and Nicolet/MidWestOne merger announcement (10/23/25).

MidWestOne Financial Group, Inc. (MOFG)·Q3 2025 Earnings Summary