First Merchants (FRME) Q4 2024 earnings summary

Executive summary

• Reported Q4 2024 net income of $64 million ($1.10 per share, $1.00 adjusted), with full-year net income of $200 million and EPS of $3.41; momentum continues into 2025 with a focus on core markets in Indiana, Ohio, and Michigan.

• Achieved strong loan growth of $185.6 million (5.9% annualized) in Q4, with commercial and consumer segments both contributing.

• Completed major technology upgrades and exited the Chicago market by selling five Illinois branches, using proceeds to offset bond portfolio restructuring losses.

• Repurchased 1.65 million shares (~$56.2 million) and redeemed $65 million of subordinated debt in 2024.

Financial highlights

• Q4 earnings per share were $1.10, or $1.00 adjusted for a $20M branch sale gain and $11.6M bond loss; net income for 2024 was $200M, with EPS of $3.41.

• Tangible book value per share rose to $26.78, up $1.72 year-over-year and 25% over two years.

• Q4 net interest income rose $3.3 million sequentially to $134.4 million, with net interest margin improving by 5 bps to 3.28%.

• Noninterest income surged to $42.7 million in Q4, driven by a $20 million gain on the Illinois branch sale, offset by $11.6 million in securities losses.

• Efficiency ratio improved to 48.48% in Q4; adjusted efficiency ratio was 53.60% for the year.

Outlook and guidance

• Expecting mid-single-digit loan growth in 2025, with 6% as a target; commercial and consumer loan pipelines remain strong.

• Expense growth projected at 1–3% for 2025, maintaining a sub-55% efficiency ratio.

• Margin growth anticipated despite two planned Fed rate cuts; proactive deposit cost management to continue.

• Non-interest income expected to grow mid- to high-single digits, led by wealth management and mortgage.

• Tax rate for 2025 expected at 13–14%.