Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to the author's position and affiliations [1][2]. Group 1 - No stock, option, or similar derivative positions are held by the author in any mentioned companies, nor are there plans to initiate such positions in the near future [1]. - The article expresses the author's personal opinions and is not influenced by compensation from any company [1]. - The views presented may not reflect those of Seeking Alpha as a whole, indicating a potential variance in perspectives among different analysts [2].

1st Source Announces Promotion of Brian Duba to General Counsel and SecretaryMay 20, 2025 10:49 AM EDT | Source: 1st Source CorporationSouth Bend, Indiana--(Newsfile Corp. - May 20, 2025) - 1st Source Corporation, (NASDAQ: SRCE) along with Chairman and CEO Christopher J. Murphy III are pleased to announce the Board of Directors' promotion of Brian Duba to General Counsel and Secretary of 1st Source Corporation and 1st Source Bank. Mr. Duba will retain his officer status of Senior Vice Presiden ...

Core Insights - 1st Source Corporation has been recognized in the KBW Bank Honor Roll for the seventh consecutive year, highlighting its strong and consistent earnings growth among U.S. banks [1][2] - The company ranks in the top 5% of eligible banks in the United States, based on long-term performance and earnings growth metrics [1] Company Overview - 1st Source Corporation, the parent company of 1st Source Bank, has total assets of $9.0 billion, making it the largest locally controlled financial institution in the northern Indiana-southwestern Michigan area [3] - The corporation operates 78 banking centers, 18 specialty finance group locations, nine trust and wealth advisory services locations, 10 insurance offices, and three loan production offices [3] - With over 160 years of history, the company is dedicated to helping clients achieve security, build wealth, and realize their dreams [3]

Core Viewpoint - 1st Source (SRCE) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Recent Performance and Projections - For the fiscal year ending December 2025, 1st Source is projected to earn $5.93 per share, reflecting an 8% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for 1st Source has risen by 1.9%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The upgrade of 1st Source to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Performance - Net income available to common shareholders for Q1 2025 was $37.52 million, compared to $29.46 million for Q1 2024, with diluted net income per share increasing to $1.52 from $1.19 [178]. - Return on average common shareholders' equity improved to 13.33% for Q1 2025, up from 11.77% in Q1 2024 [178]. - Total noninterest income for Q1 2025 was $23.10 million, a 4.27% increase from $22.16 million in Q1 2024 [207]. - Trust and wealth advisory fees increased by 6.03% to $6.67 million in Q1 2025, driven by the number and size of client relationships [208]. - The provision for income taxes for Q1 2025 was $10.18 million, with an effective tax rate of 21.34%, down from 22.24% in Q1 2024 [222]. Asset and Liability Management - Total assets increased to $8.96 billion, up $31.18 million or 0.35% from December 31, 2024 [157]. - Total loans and leases rose to $6.86 billion, an increase of $8.59 million or 0.13% from December 31, 2024, driven by growth in renewable energy and real estate portfolios [158]. - Total deposits reached $7.42 billion, an increase of $187.73 million or 2.60% from the end of 2024, primarily due to higher savings and time deposits [160]. - Total shareholders' equity increased to $1.16 billion, up $50.39 million or 4.54% from December 31, 2024 [165]. - Cash and cash equivalents totaled $222.82 million, an increase from $124.83 million at December 31, 2024, primarily due to increased deposits [175]. - Total liquidity was $3.44 billion at March 31, 2025, accounting for approximately 50.41% of total deposits net of brokered and listing services certificates of deposit [174]. - The loan to asset ratio was 76.57% at March 31, 2025, compared to 76.74% at December 31, 2024 [175]. Interest Income and Margin - Taxable-equivalent net interest income for Q1 2025 was $81.09 million, a 12.52% increase from Q1 2024 [183]. - The net interest margin on a fully taxable-equivalent basis was 3.90% for Q1 2025, up from 3.54% in Q1 2024 [183]. - The yield on average earning assets increased by 21 basis points to 5.94% from 5.73% in Q1 2024 [184]. - Total interest-bearing liabilities decreased by 20 basis points to 2.90% from 3.10% due to lower rates on interest-bearing deposits [184]. Credit Quality - The provision for credit losses for Q1 2025 was $3.27 million, down from $7.48 million in Q1 2024 [193]. - Net charge-offs for Q1 2025 were $0.18 million, or 0.01% of average loans and leases, significantly lower than $6.12 million, or 0.38%, in Q1 2024 [193]. - Nonperforming assets increased to $43.07 million as of March 31, 2025, a 37.46% rise from $31.33 million at December 31, 2024, and a 92.02% increase from $22.43 million at March 31, 2024 [200]. - The allowance for loan and lease losses as a percentage of outstanding loans and leases was 2.29% at the end of Q1 2025, compared to 2.26% a year earlier [197]. - Nonaccrual loans and leases rose significantly, particularly in the auto and light truck portfolio, contributing to the overall increase in nonperforming assets [201]. - The provision for credit losses for Q1 2025 was influenced by a weakened economic outlook, with impairment reserves totaling $0.64 million for aircraft, construction equipment, and auto/light truck portfolios [194]. Operating Expenses - Salaries and employee benefits rose by 8.60% to $32.12 million in Q1 2025, attributed to merit increases and higher group insurance costs [215]. - Total noninterest expense increased by 8.98% to $53.08 million in Q1 2025, reflecting higher costs across various categories [215]. - Average interest-bearing deposits increased by $350.28 million, or 6.49%, primarily in time, savings, and interest-bearing demand deposits [186]. - Average short-term borrowings decreased by $205.96 million, or 72.87%, compared to Q1 2024 [187]. - Average earning assets increased by $252.63 million, or 3.09%, compared to the same period in 2024 [184].

Group 1 - 1st Source reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.36 per share, and up from $1.19 per share a year ago, representing an earnings surprise of 11.76% [1] - The company posted revenues of $104.04 million for the quarter, surpassing the Zacks Consensus Estimate by 1.70%, and an increase from $94.07 million year-over-year [2] - 1st Source has consistently surpassed consensus EPS estimates over the last four quarters [2] Group 2 - The stock has lost approximately 2.5% since the beginning of the year, while the S&P 500 has declined by 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $1.50 on revenues of $105.5 million, and for the current fiscal year, it is $5.82 on revenues of $418.3 million [7] - The Zacks Industry Rank for Banks - Midwest is in the top 10% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] Group 3 - The estimate revisions trend for 1st Source is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions [5] - Another company in the same industry, Enterprise Financial Services, is expected to report quarterly earnings of $1.17 per share, reflecting a year-over-year change of +9.4% [9]

Financial Performance - Record quarterly net income of $37.52 million, up 19.35% from the previous quarter and up 27.38% year-over-year [2] - Diluted net income per common share was $1.52, reflecting a 19.69% increase from the previous quarter and a 27.73% increase from the same quarter last year [4] - Net income available to common shareholders for Q1 2025 was $37,520, a 27.4% increase from $29,455 in Q1 2024 [35] - Basic net income per common share increased to $1.52 in Q1 2025, up from $1.19 in Q1 2024, marking a growth of 27.8% [35] - Net income available to common shareholders reached $37,520 thousand for the first quarter of 2025, compared to $31,438 thousand in the previous quarter, representing a growth of 19.8% [38] Asset and Loan Growth - Average loans and leases grew by $122.53 million, or 1.84%, from the previous quarter, and increased by $294.88 million, or 4.53%, year-over-year [12] - Total loans and leases amounted to $6,863,393 thousand as of March 31, 2025, slightly up from $6,854,808 thousand at December 31, 2024, indicating a growth of 0.13% [37] - Total assets increased to $8,963,114 thousand as of March 31, 2025, compared to $8,931,938 thousand at December 31, 2024, reflecting a growth of 0.35% [37] - Total assets increased to $8,856,278 thousand as of March 31, 2025, compared to $8,824,464 thousand at December 31, 2024, reflecting a growth of 0.36% [39] Deposit Growth - Average deposits increased by $187.39 million, or 2.62%, from the previous quarter, and grew by $322.44 million, or 4.60%, compared to the same quarter last year [13] - Total deposits rose to $7,417,765 thousand as of March 31, 2025, compared to $7,230,035 thousand at December 31, 2024, reflecting an increase of 2.6% [37] Income and Revenue - Tax-equivalent net interest income was $81.09 million, up 1.97% from the previous quarter and up 12.52% year-over-year [14] - Net interest income for Q1 2025 was $80,938, up 12.5% from $71,915 in Q1 2024 [35] - Noninterest income for the first quarter was $23.10 million, up 25.00% from the previous quarter and up 4.27% year-over-year [16] - Noninterest income rose to $23,103 in Q1 2025, a 4.3% increase from $22,156 in Q1 2024 [35] - Noninterest income increased to $23,103 thousand for the first quarter of 2025, compared to $18,482 thousand in the previous quarter, a significant increase of 25.5% [38] Efficiency and Ratios - Common equity-to-assets ratio improved to 12.96%, compared to 12.44% at the end of the previous quarter and 11.65% a year ago [23] - The efficiency ratio improved to 51.01% in Q1 2025, down from 51.77% in Q1 2024, indicating better operational efficiency [35] - The efficiency ratio (GAAP-derived) improved to 51.01% for the first quarter of 2025, down from 55.40% in the previous quarter, indicating enhanced operational efficiency [41] Capital and Equity - Total equity at the end of Q1 2025 was $1,220,542, an increase from $1,081,549 in Q1 2024, reflecting a growth of 12.9% [35] - Total common shareholders' equity increased to $1,161,459 thousand as of March 31, 2025, compared to $1,111,068 thousand at December 31, 2024, reflecting a growth of 4.53% [41] - Book value per common share (GAAP-derived) rose to $47.29 as of March 31, 2025, up from $45.31 in the previous quarter, indicating an increase of 4.37% [41] Allowance and Asset Quality - The allowance for loan and lease losses increased to $157.47 million, or 2.29% of total loans and leases, reflecting increased economic uncertainty [21] - The allowance for loan and lease losses was $157,470 at the end of Q1 2025, compared to $148,024 in Q1 2024, indicating a proactive approach to asset quality [35] - Nonperforming assets increased to $43,072 in Q1 2025 from $22,431 in Q1 2024, highlighting potential challenges in asset quality [35] Operational Developments - The company opened a new banking center in Carmel, Indiana, expanding its market presence [10]

Core Viewpoint - 1st Source Corporation's loan growth and earnings are at risk due to the resumption of tariffs on automobiles, which could impact its Specialty Finance division significantly [1]. Group 1: Company Overview - 1st Source Corporation operates a Specialty Finance division that lends for the purchase and lease of trucks, aircraft, and construction equipment, which constitutes more than half of the company's total operations [1].

Company Overview - 1st Source (SRCE) is based in South Bend and operates in the Finance sector, with a year-to-date share price change of 11% [3] - The company currently pays a dividend of $0.36 per share, resulting in a dividend yield of 2.22%, which is lower than the Banks - Midwest industry's yield of 2.99% and the S&P 500's yield of 1.55% [3] Dividend Performance - The current annualized dividend of 1st Source is $1.44, reflecting a 2.9% increase from the previous year [4] - Over the last 5 years, 1st Source has increased its dividend 4 times year-over-year, achieving an average annual increase of 5.14% [4] - The company's payout ratio stands at 26%, indicating that it paid out 26% of its trailing 12-month EPS as dividends [4] Earnings Growth - 1st Source is expected to see earnings growth this fiscal year, with the Zacks Consensus Estimate for 2025 projected at $5.82 per share, representing a year-over-year growth rate of 6.01% [5] Investment Appeal - Dividends are favored by investors as they enhance stock investing profits, reduce overall portfolio risk, and offer tax advantages [6] - Established firms with secure profits are typically viewed as the best dividend options, while high-growth businesses and tech start-ups rarely offer dividends [7] - 1st Source is recognized as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]

Core Points - 1st Source Bank has been recognized as one of America's Best Banks, ranking 26th out of 100 in the latest Forbes list [1][2] - The evaluation was based on 10 financial metrics assessing growth, credit quality, and profitability for the 12 months ending September 30, 2024, along with stock performance for the 12 months ending January 10, 2025 [1][2] - 1st Source Bank is one of only three banks in Indiana to be included in this year's list [1] Company Overview - 1st Source Corporation, the parent company of 1st Source Bank, has total assets of $8.9 billion, making it the largest locally controlled financial institution in the northern Indiana-southwestern Michigan area [3] - The corporation operates 77 banking centers, 18 specialty finance group locations, nine trust and wealth advisory services locations, 10 insurance offices, and three loan production offices [3] - 1st Source has a history of over 160 years dedicated to helping clients achieve security, build wealth, and realize their dreams [3]