MidWest One maintains an average rating among stock offerings by Investing.com
On Friday, MidWest One Financial (NASDAQ:MOFG) maintained its Neutral rating and $30.00 target price, as Piper Sandler acknowledged the bank's recent announcement of a significant common stock offering and possible balance sheet restructuring.
The financial institution has revealed plans for a general public offering of $94 million, which could rise to $108 million if an additional 15% option is exercised. The offering is expected to be priced at $25.00 per share, a 10% discount to Thursday's closing price of $27.82.
MidWest One also disclosed that it is considering a balance sheet restructuring that will involve selling approximately $1.05 billion in securities, comprising approximately 58% of its total securities, at a yield of approximately 1.73%.
The sale will result in a pre-tax loss of approximately $160 million, equivalent to a 13.5% loss. Additionally, the bank plans to reduce its borrowings by $418 million and reinvest approximately $616 million in securities with a yield of approximately 4.54%.
The expected restructuring actions are expected to reduce the tangible book value (TBV) by 27%-30%, bringing it down to approximately $20-$21. However, these changes are expected to increase annualized interest income (NII) by $25.6 million, or 18% of the previous twelve months' NII.
The bank also expects that earnings per share (EPS) for 2025 will likely exceed 25%, and the excess cash may be reinvested to support MidWest One's strong growth prospects.
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