Why did FRME's Q4 earnings surprise analysts positively?

First Merchants Corporation (FRME) reported total revenue of $177.11 million and net income of $64.35 million for the fourth quarter of 2024, respectively. The company's revenue exceeded analysts' expectations, leading to a positive revenue surprise of $9.35 million. This positive surprise can be attributed to several key factors: |code|Ticker|Name|Date|Revenue Surprise|Total Revenue|market_code| |---|---|---|---|---|---|---| |FRME|FRME.O|First Merchants|2024 Q1|-9000000|1.53701E8|185| |FRME|FRME.O|First Merchants|2024 Q2|-650000|1.59905E8|185| |FRME|FRME.O|First Merchants|2024 Q3|-1.036E7|1.55976E8|185| |FRME|FRME.O|First Merchants|2024 Q4|9350000|1.77112E8|185| |code|Ticker|Name|Date|Net Income|market_code| |---|---|---|---|---|---| |FRME|FRME.O|First Merchants|2024 Q1|4.7941E7|185| |FRME|FRME.O|First Merchants|2024 Q2|3.9925E7|185| |FRME|FRME.O|First Merchants|2024 Q3|4.9187E7|185| |FRME|FRME.O|First Merchants|2024 Q4|6.4349E7|185| 1. **Strong Loan Yields**: First Merchants has reported strong loan yields, which have contributed to its robust financial performance. This indicates effective pricing power in their loan portfolio, which has likely boosted income despite competitive pressures and asset-sensitive operations. 2. **Proactive Cost Management**: The bank has been proactive in managing its deposit costs, which could mean effective cost control measures have been implemented to mitigate the impact of higher funding costs. This focus on cost management might have enhanced profitability and contributed to the positive earnings surprise. In summary, First Merchants' Q4 earnings exceeded expectations due to strong loan yields and proactive cost management, leading to a positive revenue surprise and robust financial performance.