Overview of Premier’s Financial Performance

Premier, a regional bank, reported net income of $71.4 million for 2024, down from $111.3 million in 2023 and $102.2 million in 2022. On a per share basis, Premier earned $1.98 in 2024, $3.11 in 2023, and $2.85 in 2022.

The decrease in net income in 2024 was primarily due to a $15.8 million decline in net interest income and a $3.2 million decrease in noninterest income, partially offset by a $4.2 million decrease in the provision for credit losses. The 2023 results included a $36.3 million gain on the sale of Premier’s insurance subsidiary, First Insurance, which boosted noninterest income that year.

Revenue and Profit Trends

Net interest income, Premier’s main source of revenue, was $201.3 million in 2024, down from $217.1 million in 2023 and $242.9 million in 2022. The net interest margin, which measures the difference between interest earned on loans/investments and interest paid on deposits/borrowings, decreased from 2.75% in 2023 to 2.52% in 2024. This was due to higher funding costs outpacing the increase in yields on interest-earning assets.

Noninterest income decreased from $90.8 million in 2023 to $50.2 million in 2024, primarily due to the absence of the $36.3 million gain on the sale of First Insurance in 2023. Service fees, mortgage banking income, and wealth management fees all increased in 2024 compared to 2023.

Noninterest expenses decreased from $163.2 million in 2023 to $159.3 million in 2024, mainly due to lower compensation and benefits costs, partially offset by $5.0 million in merger-related expenses in 2024.

Strengths and Weaknesses

Premier’s key strengths include its strong market position in commercial and commercial real estate lending, diversified revenue streams, and well-capitalized balance sheet. The bank has established itself as a leader in its Midwest markets by hiring experienced lenders and providing high-quality customer service.

However, Premier faces some challenges, including a decline in net interest margin due to rising funding costs, an increase in non-performing assets, and the potential disruption from the pending merger with Wesbanco. The bank’s loan portfolio also has some concentrations in commercial real estate and multifamily lending that could expose it to risks if those sectors experience stress.

Outlook and Future Prospects

The pending merger with Wesbanco, expected to close in early 2025, will be a key focus for Premier going forward. The combined company will have approximately $30 billion in assets and a stronger presence across the Midwest. While the merger may create some near-term disruption, it should provide Premier with greater scale and diversification over the long term.

Looking ahead, Premier will need to navigate the rising interest rate environment and manage its credit risk carefully. Maintaining strong asset quality and controlling expenses will be critical to sustaining profitability. The bank’s investments in technology and digital capabilities should also help it better serve customers and compete in its markets.

Overall, Premier appears to be a well-run regional bank with solid fundamentals. However, the challenges of the current economic environment and the pending merger will test the bank’s resilience in the coming years.