MidWestOne Financial Group's Q4 2024: Discrepancies in Loan Growth, Margin Expansion, and Capital Strategy

Profitability and Earnings Improvement:
- MidWestOne Financial Group reported net income of $16.3 million or $0.78 per diluted common share for Q4 2024, with a return on average assets of 1.03%.
- This improvement was primarily due to a 92 basis-point increase in net interest margin, driven by a bond portfolio repositioning and paydown of higher cost borrowings.

Deposit Growth and Mix:
- Total depositions increased by 2% compared to the linked quarter, with non-interest bearing deposits growing by 4%.
- The improvement in deposit mix was attributed to a shift away from public funds, which were down 14% for the year, and a focus on strengthening commercial and consumer deposit segments.

Loan Performance and Challenges:
- Loan balances were flat for the quarter due to elevated payoffs, although pass-rated loan balances grew at a 4% linked quarter annualized rate.
- The flat performance was largely due to classified assets decreasing substantially, but elevated payoffs and challenges in commercial real estate projects affected growth.

Strategic Initiatives and Fee Income:
- The SBA team generated more than $1.6 million of SBA gain on sale revenue in 2024, with $630,000 occurring in the fourth quarter.
- The wealth management business also showed strong growth, with an 11% increase over the linked quarter, contributing to fee income momentum.

Capital and Growth Strategy:
- MidWestOne Financial Group is approaching a 10.73% CET1 ratio, supporting its balance sheet growth and cash dividend to shareholders.
- The company is focused on executing on organic growth initiatives, potentially expanding through strategic M&A, and maintaining a strong capital position.