Good morning, and thank you for attending today's MidWestOne Financial Group second quarter 2022 earnings call. My name is Jason, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star followed by one on your telephone keypad. This presentation contains forward-looking statements relative to the financial condition, results and operations and business of MidWestOne Financial Group. 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 are interest rates, changes in the mix of the company's business, competitive pressure, general economic conditions, and risk factors detailed in the company's periodic reports and registration statements filed with the Securities and Exchange Commission. MidWestOne Financial Group undertakes no obligation to publicly revise or update these forward-looking statements to reflect current events or circumstances after the date of the presentation. I would now like to pass the conference over to our host, Charlie Funk, CEO. Please go ahead. Thank you, Jason, and good morning or good afternoon to all of you, and thank you for joining us on the call. On the call this morning in Iowa City, we have Len Devaisher, our President, Gary Sims, our Chief Credit Officer, Barry Ray, our Chief Financial Officer, and Jim Cantrell, our Treasurer and Chief Investment Officer. I'll begin with a few preliminary remarks and just say that I think we have many good things to discuss with you today, as well as a few hurdles that we have to clear going forward. Overall, we thought it was a very good quarter for MOFG, and obviously, we had a lot of moving parts due to the Iowa First acquisition. We do think our core income is higher than what was reported in our earnings release. We had an excellent quarter of loan production. We saw good growth in the Twin Cities, in Denver and in Dubuque, Iowa, and the linked- quarter annualized rate of growth was roughly 10.5%. We also have a decent pipeline in the third quarter. As always, we can't predict payoffs, but we should have good production going forward, and if July is any indication, we did have a good July with in terms of loans closed. Along with the loan growth, we also saw a significant improvement in asset quality. Non-performing assets came in at 0.76% of total loans. Even with the addition of the Iowa First non-performing assets, we nevertheless still saw a decline in NPAs. To give you some perspective, a year ago, we were at 121 basis points of NPAs divided by total loans. Today, again, we stand at 0.76%. Outstanding progress. Net charge-offs of 3 basis points, and we still note that our allowance for credit losses, we believe, is a relatively strong 1.45% of total loans. As far as the credit outlook, as far as we can see, it's good. We clearly hear all of the talk of a recession. We're wary of that, but nevertheless, our overall portfolio is performing well, and we feel somewhat confident as we go forward. In terms of deposits, I think a pretty good performance on deposits. In the legacy bank, we were essentially flat in total deposits, down just $4 million for the quarter. We were able to hold our pricing for the most part. We do think that's about to change, due to the rapid increases that the Fed has undertaken, and we're seeing more customers demand higher rates on deposit. We acknowledge that. We do believe we will be able to successfully defend our strong deposit base. We also note that Iowa, the two Iowa First banks that we acquired, bring very good and very low-cost deposits to us, and we are appreciative of that. In terms of the net interest margin increase of 8 basis points, we have roughly 25% of our loans being variable rate, and we define variable rate as one year and less, although the bulk of loans reprice in 90 days or less. We need to manage the margin as closely as we can going forward, and we do note that, for the most part, loan pricing has gotten better during the quarter. Although it is still very competitive, it is nevertheless better than it was 90 days ago. In terms of non-interest income, it's no surprise that mortgage production has been down, but we did get the nice benefit from the Mortgage Servicing Rights increase of $2.4 million of income. In terms of wealth management, we saw clearly the market declines had an effect on our assets under management. The one thing I would note in terms of wealth management is you will recall last November, we brought over a wealth management team in Eastern Iowa, generally located in the Cedar Rapids area. They are continuing to be subject to non-solicitation agreements, but those agreements will be up later this year. When those agreements expire, we just expect to see meaningful increases in our assets under management, which I would think would show up in the first quarter of 2023. I do have two observations on non-interest expense. It is certainly a competitive market for employees. We've talked about this before, it's not unique to MidWestOne, and this is ongoing, and will continue to be ongoing, we predict. We did have outsized legal expenses in the first half of 2022. We will not see this continue into quarter three. We believe that is behind us. In terms of capital management, I think we were opportunistic. We bought more or less 65,000 shares of our own stock at a price of just under $30 per share, $29.67 to be exact. We think that's good value. We've currently paused that program, but we do expect to re-enter the market if we see good opportunity going forward. Tangible Common Equity was affected not only by the AOCI adjustment, but also by the acquisition, which I will remind you was an all-cash acquisition of Iowa First. Our regulatory capital continues to be more than adequate in our view. Just a few words about the Iowa First acquisition. Finally, we were able to close that. It took almost seven months to gain approval. As we said in the first- quarter call, there were no specific questions that were being asked of us. It just took a long time for the approval process to work. We integrated the smaller of the two banks, First National Bank in Fairfield, last weekend. By all accounts, this integration went extremely smoothly. Hardly any issues to report. We are on target to meet or exceed cost savings estimated on the transaction. We do think that our earnings accretion will be better than anticipated and previously reported in 2022, but especially in 2023. With that, I would like to turn the mic, so to speak, over to our Chief Financial Officer, Barry Ray. Thank you, Charlie. I'll start with the balance sheet. Total assets increased $482 million from the linked quarter, which reflected the $515 million of assets acquired in the Iowa First or IOFB acquisition we completed on June 9, 2022. With Iowa First, we acquired approximately $282 million in loans held for investment, $119 million in debt securities, and assumed $464 million of deposits. The accretable purchase discount on IOFB acquired loans was approximately $11 million, as provisionally measured during the second quarter of 2022. We expect to recognize the purchase discount through interest income on an accelerated basis over the next four to five years. Adjusted core loans, which exclude both SBA, PPP, and Iowa First acquired loans, increased $82.3 million or 10.5% annualized from the linked quarter. Excluding the $464 million of deposits assumed from Iowa First, deposit balances, as Charlie indicated earlier, were basically flat from the linked quarter. The allowance for credit losses increased $6.2 million due to the $3.4 million allowance for purchased credit- deteriorated loans established in the Iowa First acquisition, as well as the $3.1 million of credit loss expense or CECL double count related to loans acquired in the Iowa First acquisition. Non-performing assets were $27.6 million at June 30 or 0.43% of total assets, and were down 35% from the prior year period. Finishing the balance sheet, total shareholders' equity was down $38.6 million from year-end 2021 due to $56.4 million after-tax change in valuation adjustment on available- for- sale debt securities, $9.7 million in cash returned to shareholders in the form of quarterly dividends and share repurchases, partially offset by net income of $26.5 million. On the income statement, net interest income of $39.7 million was up $2.4 million or 6.4%. The reported net interest margin of 2.87% in the second quarter of 2022 was up 8 basis points from the linked quarter. Reported loan yields were up 4 basis points. If you exclude PPP and purchase discount accretion, the weighted- average loan yield in the second quarter was 3.95%, which was up 15 basis points from the linked quarter. Interest-bearing deposit costs were up only 2 basis points, which reflected our efforts to proactively manage our core deposit franchise. Non-interest income was $12.3 million for the second quarter of 2022, which was up from the linked quarter, primarily due to the $1.4 million provisionally measured bargain purchase gain from the Iowa First transaction. Non-interest expenses were $32.1 million, up from $31.6 million the linked quarter. We expect the first quarter of 2023 to be the next clean quarter for expenses following the core system conversions of the former First National Bank of Muscatine, which is scheduled for the third quarter of this year. Income tax expense was negatively impacted by $835,000 charge in connection with the remeasurement of our deferred tax asset stemming from an Iowa Bank Franchise Tax rate change. Briefly, that tax law change reduces the bank franchise tax rate from 5% to 3.5% over the next five years. Assuming no further franchise tax rate changes, we expect to recoup this one-time charge via reduced Iowa state tax expense over the next three years. With that, I'll turn it over to our president, Len Devaisher. Thanks, Barry. I just wanna provide some color commentary on what we've seen from the revenue drivers piece of the business. One of the things that you all have heard us talk a lot about is our focus on improving the earning asset mix of our balance sheet. Obviously we're pleased with the loan growth that we're seeing, and my comments about loan growth would be exclusive of the acquired loans with Iowa First. Our loan growth in the second quarter was across every segment, consumer, mortgage, and commercial. I think the commercial growth is especially notable in light of the decline in non-pass credits. You can see in our release about the decline in non-performing assets. Overall, if you look at the decline in non-pass credits, we see core commercial, again, excluding PPP and Iowa First, core commercial growing $54 million in the quarter, and that's net of a $33 million decline in non-pass credits. In quarter two, we're particularly encouraged as we see total loan production up over 26% over the first quarter of the year. We see good momentum in terms of the asset -side revenue growth. On the deposit side of the balance sheet, and thinking about the strength of our deposit franchise, we were pleased with our deposit levels quarter-over-quarter. The key drivers we talk and look at consistently would be three. Number one, net new deposit accounts. Number two, number of households. And number three, services per household. Again, in all three of those categories, across both consumer and commercial client base, we see improvement. We continue to see growth in net new deposit accounts, net households, and services per household in quarter-over-quarter. We're proud of the team's effort, and it's really an example of the entire franchise, contributing to those positive numbers. With that, we're pleased to entertain questions. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered. Our first question is from Brendan Nosal with Piper Sandler. Your line is now open. Hey, good morning, guys. How are you? Morning, Brendan. Good. Good. Maybe just to start off on expenses, certainly came in lower than I was thinking, just given that you had a partial quarter's impact of Iowa First. Maybe just update us on the expected timing of cost savings from the deal, and thoughts on the total cost run rate for the rest of the year, once Iowa First is fully in the numbers. Yeah, this is Barry Ray, Brendan Nosal, I'll take that. You know, I think that, with respect to the cost savings from Iowa First, seems as if we're on track to probably recognize those, I would say, by the end of this year. With respect to the ongoing run rate of expenses for the latter half of the year, we're probably somewhere in the $33 million-$34 million range on a quarterly basis, and that reflects the addition of Iowa First. I'm also including in there the increase attributable to the CDI amortization from that acquisition, Brendan Nosal. Does that answer your question? Yes. That's very helpful. Thank you. Maybe one more from me. I was just wondering if you folks could give us an update on the state of the ag sector across your markets. Thanks. I'd say the state of the ag sector is pretty good. This is Charlie Funk. Prices have been good. While input costs, in other words, anything that has to do with petroleum, is gonna increase, a lot of our borrowers had locked those costs in earlier this year and haven't experienced the increase that the rest of us have. I think the outlook for this year is good. The crops look pretty good. We could use another rain, but at this point in time, I think it's gonna be certainly a good crop yield in Iowa in our footprint. In terms of next year, there's gonna be little more margin pressure for our ag growers, and because they're gonna have to deal with the increase in cost. Next year is probably an okay year. We expect prices to stay up because food demand is not going away and the food situation worldwide is, I think, tenuous. I think we all understand that. Next year could be a little tighter year, but notwithstanding some disaster that we see, we think this is a good year for ag, and I think our watch and substandard loans in the ag sector reflect that. Fantastic. Thank you for taking the questions. Yep. Thank you, Brendan. Our next question is from Terry McEvoy with Stephens. Hi. Good morning, everyone. Maybe ask a question on the margin. Terry, your line's open. Charlie, you mentioned. Yep. Can you hear me? Is that better? Terry, your line is open. Can hear you now. Okay. Sorry about that. New phone systems. If I could start with a question on the net interest margin. Charlie, you mentioned the likelihood of deposit rates moving higher given recent Fed actions, but then you also stressed that 25% of the loan portfolio is variable rate. When you think about the third and the fourth quarter, which one outweighs the other? I guess my direct question is, do you think the margin can expand at least in the third quarter? It seems we've lost connection with our speaker. One moment please, while we try to get him back on. Terry, this is Jim. I was, I think, in mid-answer maybe when we got disconnected. Can you hear us, Terry? You are back online. Okay. Very good. Go ahead. Where should I start? The beginning. The beginning. What I was talking a little bit about the core margin at the bank. I think that the reported margin expanded 8 basis points. If you look at the core margin, which factors out some PPP fees that we took in the first quarter that really didn't have in the second quarter, our core margin expanded 15 basis points, and I think that's probably a better reflection of the earnings power. On a go-forward basis, I think we can manage our deposit cost increases at a pace that would be below our asset yield increases. But that's something we'll watch very closely. I think one of the other things I would point out is that we've had tremendous deposit growth over the last two years, and we do value those deposits, and we're gonna price to retain, but we're gonna be pretty disciplined about that, and so we will use a combination of exception pricing and just outright changes to rate to maintain that deposit base. We do have some significant competition in the Eastern Iowa market in particular. As we move into the third and fourth quarter, I would anticipate we would continue to see a little bit of core margin expansion, as we're able to again lag the deposit side and see the benefit of some improved asset mix. I think we're growing loans now. The deposit growth has really stabilized and has been pretty flat for the last six months. I think we'll benefit on the asset mix side as those loans replace investments on a go-forward basis. We're probably 5 to 10 to 15 basis points wider in the first quarter as compared to second quarter. Our next question is from Andrew Liesch with D.A. Davidson. Hey, good morning. This is Andrew on for Jeff Rulis today. Just a question on the deposit side. Was just wondering if you can speak to the deposit pricing competition in your footprint and the expectations on deposit pricing going forward. Yeah. Andrew, this is Jim again. I will say we have a kind of a bifurcated market when it comes to deposit pricing. The franchise is located in Eastern Iowa City and towns in Eastern Iowa really see a lot of price competition on the deposit side coming from credit unions. So it wouldn't be unusual for credit unions to be offering the CD rates well above 2% in the current market, whereas many of the bank competitors that we see are nowhere close to that level. As we move, say, into the Twin Cities market, in some of our and in Florida and in Denver, we don't find as much price competition. That's one of the things we'll also do is pay attention to where we can differentiate ourselves regionally and price according to local market competition. That's helpful. Thank you. Another question, more on the loan side. Solid quarter loan growth-wise. Just wondering how much of that might be attributable to pull forward demand as borrowers anticipate higher rates. Have you seen any of that? Andrew, this is Len. I would say I do not see acceleration of projects in that way. That we ended the quarter with a strong pipeline, and we saw that pipeline convert as we expected. Got it. Thank you. That's very helpful. That's it from me. I'll step away. Our next question comes from Damon DelMonte with KBW. Your line is now open. Hey, good afternoon, guys. Hope everybody's doing well today. Hi, Damon. Hi, Damon. First question, just wanted to talk a little bit about the credit front. Obviously, you know, good trends this quarter, and you guys seem to feel pretty good about the direction of you know legacy credit trends. As we think about you know loan growth occurring in the back half of the year and then potentially some softening in the broader macro picture, how do we think about provision level over the next couple quarters? Hey, Damon, this is Gary Sims. I'll start that conversation for you. I mean, what we see for the rest of the year relative to provision and our reserve levels, we're kind of going into this cycle that we are looking at pretty well reserved. We feel like our go- forward provisions should be moderated relative to loan growth. They primarily will be associated with loan growth. You know, the caveat that I'll put there is, unless we see change. Right. Okay, great. And then with respect to the loan growth, how, you know, based on the pipeline outlook, and Charlie, I think you said July was off to a good start. I mean, you guys feel confident that you could do kind of mid to upper single digits, or do you feel it's kind of like more that, you know, 3%-5% kind of level? Damon DelMonte, this is Len Devaisher. I would stick more to the latter guidance as I look forward, just given, you know, the pipeline, it's interesting, remains pretty solid, and I feel good about the pipeline. What I would say is the what I might call the pre-pipeline, just the kinds of conversations and activity levels that we are hearing in the marketplace. We do see signs of caution, you know, not panic, just caution. So as a result of that, I still feel that that low to mid single digit numbers is the right one as we look forward. Okay, great. That's helpful. Just one quick question on the margin for Barry or Jim, either one. The core margin this quarter, you had about a 4 basis point impact from the accretable yield. Is that correct? Accretable. Well, let's see. Like $528,000, I think. The number I have, this is Barry, Damon, and I'm looking at it without the PPP or the accretable. Oh, I'm sorry. You're the new purchase discount or are you talking about just purchase discount overall, Damon? Well, I'm just trying to get to a core margin ex PPP, ex accretable yield for this quarter, so I can kind of think about that going forward. Oh, got you. As I- Oh, sorry. Thank you. For my model. We were up 8 basis points on a reported basis. I would say without PPP and purchase accounting, it was 14 basis points. Okay. All right. That's helpful. As far as, like, scheduled, you know, accrual yield in the coming quarters, do you have a ballpark we could use for that? I don't have a number per se, Damon. You know, kind of like, our experience would indicate and when we model these things for acquisition, we use an accelerated amortization method. Like, the number that we recorded was $11 million for the Iowa First acquisition. Usually we look at that over the expected life of the loan portfolio, four to five years. Okay. All right. That works. Great. That's all that I had. Thanks a lot. Thank you, Damon. Thanks, Damon. Once again, if you would like to ask a question, it is star one on your telephone keypad. Our next question comes from Brian Martin with Janney Montgomery. Hey, good afternoon, guys. Hello, Brian. Brian. Say, just maybe one follow-up on Damon's question. Yeah, I guess I was just trying to understand the same thing, if you guys know it. I guess I was thinking that the core margin, you know, ex those two items you called out, either Barry or Jim, was kind of in that 2.80%, low 2.80s% range. Does that seem like that's the right wheelhouse of where we start, you know, based on kind of what you guys calculate? That's the correct wheelhouse, Brian. Okay. All right. Low 2.80s% is a good number then. Can you just talk a little bit, Barry, or just maybe Jim, whoever, but just as you kind of factor in the what the forward curve is showing here, kind of where you think the margin may, you know, once you get a little bit more benefit here, does it begin to level out early next year? Is that how you guys are thinking about it? Just given kind of the pricing dynamics in your market, in what, you know, the deposit betas you guys are expecting, certainly get the benefit early on as it lags, but as it catches up, is that how we should think about it? I'm happy to take a stab. This is Jim, Brian, and I'll hand it over to Barry. That is how I do think about it. I think over the next couple of quarters, we've had, what, 225 basis points of increase so far. I think the forward curve is projecting another 75 at the next meeting or 50-75, probably another 100 in total. During that period, while rates are rising, I do think there's opportunity for us to see margin expansion during that period. The forward curve says that the Fed funds are going to peak in January or February in the low 3s. Once that happens, depending on the shape of the yield curve, and deposit mix and all those other variables, I think we probably see a slowdown in margin expansion and a holding, and we'll just have to see what happens then. It'll be a function of what the shape of the yield curve looks like and our deposit and our loan or our asset mix at that point. I do think during this period, this next six months, we probably have an opportunity to see a little bit of widening. Gotcha. Okay. Yeah, I guess just on the wealth side. Charlie, you talked about or maybe Len, whoever, just on the pickup you expect from the folks you've got that you've brought aboard, can you put any kind of context around how we should think about, you know, how much of a lift we should see from that down the road as they bring on their books of business and kind of work through those non-competes? Well, yeah, that's a great question. I'm not sure I can give you a definitive answer. But I'll take a stab at it. There are a couple variables that we have. Number one, you can get a customer's consent to move assets, and depending on where the assets are moving from, it can take two or three months to move. That enters into it. But I would think by a year from now that it could easily be, and this is a wide range, but at least $100 million and could be as much as $200 million. We would also include the Twin Cities wealth team in that because we expect them to continue to gather momentum. That's a wide range, Brian, but that's what we would hope to do at a minimum. Gotcha. Okay. That's helpful. Just to have some context on how to think about it is good. Maybe just the last one or two for me, just the mortgage business obviously you talked about, Charlie, but just as far as kind of putting in a floor about, you know, what we should expect there, is this quarter a pretty good level as far as how to think about, you know, the go-forward look at mortgage? Yeah. I mean, things have slowed down quite a bit for mortgage. You know, you probably noticed we're doing more in-house loans now, and most of those would be five one and seven one ARMs. Might be a few ten ones, but most of them are five ones and seven ones. You know, we still have a pretty robust pipeline of pre-approved loans, but you know, where people haven't bought the house yet. Now, some of those, they probably will wind up not buying because of interest rates, but if we're not at a floor, I would think we're close to a floor. Gotcha. Okay. That's helpful. With that, maybe for Barry, I don't know, the tax rate change, what the go- forward tax rate we should think about, does it change, Barry, or is this kind of a good level? What's a good level to think about on that tax rate? Yeah. We're thinking for the tax rate for the year, 20%-22%, Brian, is what we're thinking. Okay. Just to be clear, Barry, your comment about the accretion on the transaction with Iowa First, the way we should think about is if that $11 million mark, the way you're thinking about the world today is it's just a straight line, and you did that, you said over three years or so. Is that kind of the best way to model it? When we see early signs with the deal closing now, I guess, but just as we think about next quarter, just take that and you know, look at it from a straight line basis or what's your suggestion? Maybe it sounds like you were a little bit quicker accelerated than that. Yeah. What my comments were accelerated in around four to five years. You know, it's difficult to say how it's actually going to flow through the earnings, given what we're seeing in the environment right now. It could be straight line might be a better approximation. My comments really centered around how we modeled it, which was accelerated. Okay. That's all I had, guys. Thanks for taking the questions. Thank you, Brian. There are no further questions waiting at this time, so I'll pass the call back over to the management team for closing remarks. Thank you to everyone who joined the call. We apologize for the blip in the middle of the call. Our phones went dead in Iowa City, but you know, fortunately, we were able to get back on the line. Thanks again. Have a great weekend, and I'll send it back to you, Jason. That concludes the conference call. Thank you for your participation. You may now disconnect your lines.