MidWestOne(MOFG)2025-01-23 21:21Net Income and Profitability - Net income for Q4 2024 was $16.3 million, with a return on average assets of 1.03% and a net interest margin (tax equivalent) of 3.43%[6] - Net income for Q4 2024 was $16.330 million, compared to a loss of $95.707 million in Q3 2024 and a 498.2% increase from $2.730 million in Q4 2023[39] - Return on average assets for Q4 2024 improved to 1.03%, compared to -5.78% in Q3 2024 and 0.17% in Q4 2023[39] - Return on average tangible equity was 14.80% for Q4 2024, a significant improvement from (82.78)% in Q3 2024 and 3.57% in Q4 2023[55] - Adjusted earnings per common share were $0.77 in Q4 2024, up from $0.58 in Q3 2024 and $0.46 in Q4 2023[64] Net Interest Income and Margin - Net interest income for Q4 2024 increased by $11.4 million from Q3 2024, reaching $48.9 million[9] - Core net interest margin expanded by 85 bps to 3.26% in Q4 2024[6] - Net interest income for Q4 2024 increased to $48.938 million, up 30.4% from $37.521 million in Q3 2024 and 50.3% from $32.559 million in Q4 2023[39] - Net interest margin (tax equivalent) increased to 3.43% in Q4 2024, up from 2.51% in Q3 2024 and 2.22% in Q4 2023[58] - Core net interest margin improved to 3.26% in Q4 2024, compared to 2.41% in Q3 2024 and 2.17% in Q4 2023[58] - Net interest income (tax equivalent) grew to $50.1 million in Q4 2024, up from $38.8 million in Q3 2024 and $33.8 million in Q4 2023[58] - Net interest income for the three months ended December 31, 2024, was $50.091 million, with a net interest margin of 3.43%[40] - Net interest income for the year ended December 31, 2024, was $157,537 thousand, compared to $144,172 thousand in 2023[38] - Net interest income for the year ended December 31, 2024, was $162.693 million, with a net interest margin of 2.66%[46] Deposits and Loans - Noninterest bearing deposits increased by 3.7% and core deposits increased by 2.3% in Q4 2024[6] - Loans held for investment increased by $188.7 million (4.6%) to $4.32 billion in December 2024 compared to December 2023, driven by the DNVB acquisition and organic loan growth[21] - Total deposits increased by $109.3 million (2.0%) to $5.48 billion in December 2024 from September 2024, with core deposits increasing by $111.5 million[23] - Loans held for investment, net of unearned income, increased from $4,126,947 thousand in December 2023 to $4,315,627 thousand in December 2024[37] - Total deposits increased from $5,395,673 thousand in December 2023 to $5,477,982 thousand in December 2024[37] - Loans held for investment remained stable at $4.316 billion as of December 31, 2024, compared to $4.329 billion in September 2024 and $4.127 billion in December 2023[39] - Total deposits increased to $5.478 billion as of December 31, 2024, from $5.369 billion in September 2024 and $5.396 billion in December 2023[39] - Total deposits for the year ended December 31, 2024, were $5.466 billion, with a cost of funds at 2.31%[46] - Loans, including fees, generated $63.443 million in interest income with an average yield of 5.86% for the three months ended December 31, 2024[40] - Loans, including fees, for the year ended December 31, 2024, generated $248.409 million in interest income with an average yield of 5.73%[46] - Average loans increased to $4.31 billion in Q4 2024, compared to $4.08 billion in Q4 2023[60] Credit Quality and Loan Performance - Classified loan ratio improved by 54 bps to 2.57% in Q4 2024, with a net charge-off ratio of 0.06%[6] - Nonperforming loans ratio remained stable at 0.51% as of December 31, 2024, compared to the linked quarter, while the classified loans ratio improved by 54 bps to 2.57%[28] - Special mention loan balances decreased by $28.8 million, or 16%, from September 30, 2024, to December 31, 2024[28] - Allowance for credit losses increased to $55.2 million as of December 31, 2024, with an allowance ratio of 1.28%, up from $54.0 million and 1.25% as of September 30, 2024[29] - Credit loss expense related to loans was $1.891 million for Q4 2024, compared to $1.835 million in Q3 2024 and $1.968 million in Q4 2023[28] - Nonperforming loans ratio decreased to 0.51% as of December 31, 2024, from 0.64% in December 2023[39] - Net charge-off ratio for Q4 2024 was 0.06%, down from 0.16% in Q3 2024 and 0.20% in Q4 2023[39] Capital and Equity - Common equity tier 1 (CET1) ratio improved by 82 bps to 10.73% in Q4 2024[6] - Total shareholders' equity decreased by $2.5 million from September 30, 2024, to December 31, 2024, primarily due to an increase in accumulated other comprehensive loss, partially offset by an increase in retained earnings[25] - Total shareholders' equity increased by $35.3 million from December 31, 2023, to December 31, 2024, driven by increases in common stock and additional paid-in-capital from a common equity capital raise in Q3 2024[25] - Tier 1 leverage to average assets ratio increased to 9.15% as of December 31, 2024, compared to 8.78% as of September 30, 2024[25] - Common equity tier 1 capital to risk-weighted assets ratio rose to 10.73% as of December 31, 2024, from 9.91% as of September 30, 2024[25] - CET1 ratio improved to 10.73% as of December 31, 2024, from 9.91% in September 2024 and 9.59% in December 2023[39] - Tangible common equity ratio decreased to 7.57% as of December 31, 2024, compared to 7.22% in September 2024 and 6.90% in December 2023[53] - Total shareholders' equity increased to $559.7 million as of December 31, 2024, compared to $524.4 million in December 2023[53] Noninterest Income and Expense - Investment services and trust activities revenue increased by 15.9% to $14.2 million in 2024[6] - Noninterest income for Q4 2024 increased by $141.2 million from Q3 2024, primarily due to a securities impairment of $140.4 million recognized in Q3 2024[12] - Noninterest expense increased by $1.6 million in 4Q24 compared to 3Q24, driven by a $0.7 million increase in compensation and employee benefits and a $0.3 million increase in occupancy expense[15] - Noninterest expense increased by $5.2 million in 4Q24 compared to 4Q23, with compensation and employee benefits, other expense, and occupancy expense contributing $2.8 million, $1.0 million, and $0.5 million respectively[16] - Total noninterest income (loss) for the year ended December 31, 2024, was $(88,247) thousand, compared to $18,423 thousand in 2023[38] - Total noninterest expense for the year ended December 31, 2024, was $144,496 thousand, compared to $131,913 thousand in 2023[38] Asset and Liability Management - Total earning assets yield increased by 60 bps in Q4 2024 compared to Q3 2024, primarily due to a 171 bps increase in total investment securities yields[10] - Total assets decreased to $6.24 billion in December 2024 from $6.55 billion in September 2024, primarily due to lower securities balances from balance sheet repositioning[18] - Investment securities decreased by $294.7 million to $1.33 billion in December 2024 from September 2024, and by $541.9 million from December 2023, due to the sale of debt securities[22] - Borrowed funds decreased by $409.1 million to $116.6 million in December 2024 from September 2024, primarily due to the payoff of BTFP borrowings[24] - Total assets decreased from $6,748,015 thousand in March 2024 to $6,236,329 thousand in December 2024[37] - Total assets as of December 31, 2024, decreased to $6.236 billion from $6.552 billion in September 2024 and $6.428 billion in December 2023[39] - Total interest-earning assets amounted to $5.807 billion, yielding $79.420 million in interest income at an average yield of 5.44% for the three months ended December 31, 2024[40] - Total interest-earning assets for the year ended December 31, 2024, were $6.117 billion, yielding $299.430 million in interest income at an average yield of 4.89%[46] Tax and Dividend - The effective tax rate for 4Q24 was 22.7%, down from 26.5% in 3Q24, with the full-year 2025 expected tax rate projected to be 22-24%[17] - The company declared a cash dividend of $0.2425 per common share, payable on March 17, 2025, to shareholders of record as of March 3, 2025[26] Share Repurchase - No common shares were repurchased during the period from September 30, 2024, through January 23, 2025, with $15.0 million remaining available under the share repurchase program[27] Efficiency and Yield Metrics - Efficiency ratio improved to 59.06% in Q4 2024, down from 70.32% in Q3 2024 and 70.16% in Q4 2023[62] - Yield on loans (tax equivalent) remained stable at 5.86% in Q4 2024, consistent with Q3 2024 but higher than 5.34% in Q4 2023[60] - Taxable investment securities yielded $38.787 million in interest income with an average yield of 2.75% for the year ended December 31, 2024[46] - Total interest-bearing deposits for the year ended December 31, 2024, were $4.529 billion, with an interest expense of $113.109 million and an average cost of 2.50%[46] - Long-term debt for the year ended December 31, 2024, had an interest expense of $8.086 million with an average cost of 6.80%[46] Revenue and Interest Income - Total revenue for Q4 2024 increased by $152.6 million from Q3 2024, driven by higher net interest income and noninterest income[8] - Total revenue for Q4 2024 was $59.775 million, a significant recovery from a loss of $92.867 million in Q3 2024 and a 64.1% increase from $36.421 million in Q4 2023[39] - Total interest income for the year ended December 31, 2024, was $294,274 thousand, compared to $249,613 thousand in 2023[38]