Company Overview - 1st Source (SRCE) is expected to report flat earnings of $1.49 per share for the quarter ended June 2025, with revenues projected at $106 million, reflecting a 9% increase year-over-year [3]. Earnings Expectations - Wall Street anticipates that the stock may rise if the actual earnings exceed expectations in the upcoming report, scheduled for July 24 [2]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. Earnings Surprise Prediction - The Most Accurate Estimate for 1st Source is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.34%, suggesting a likelihood of beating the consensus EPS estimate [12]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 2 (Buy) [10]. Historical Performance - In the last reported quarter, 1st Source exceeded the expected earnings of $1.36 per share by delivering $1.52, resulting in a surprise of +11.76% [13]. - The company has successfully beaten consensus EPS estimates in each of the last four quarters [14]. Industry Comparison - First Busey (BUSE), another player in the Zacks Banks - Midwest industry, is expected to report earnings of $0.61 per share, marking a year-over-year increase of +22%, with revenues projected at $192.1 million, up 65.3% from the previous year [18]. - However, First Busey's consensus EPS estimate has been revised 2.1% lower over the last 30 days, resulting in a negative Earnings ESP of -4.49% and a Zacks Rank of 4 (Sell), making it difficult to predict an earnings beat [19].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: 1st Source (SRCE) - 1st Source currently holds a Momentum Style Score of B, indicating potential as a solid momentum pick [3][12] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4][12] Price Performance - Over the past week, SRCE shares increased by 3.93%, while the Zacks Banks - Midwest industry rose by 5.08% [6] - In a longer timeframe, SRCE shares have gained 22.35% over the past quarter and 24.06% over the last year, outperforming the S&P 500, which increased by 16.66% and 14.76% respectively [7] Trading Volume - SRCE's average 20-day trading volume is 124,741 shares, which serves as a baseline for price-to-volume analysis [8] Earnings Outlook - In the last two months, one earnings estimate for SRCE has increased, while none have decreased, raising the consensus estimate from $5.93 to $5.97 [10] - For the next fiscal year, one estimate has also moved upwards with no downward revisions [10]

Core Viewpoint - 1st Source Corporation (SRCE) has reached a significant support level, indicating a potential bullish breakout due to a "golden cross" formation in its moving averages [1] Technical Analysis - SRCE's 50-day simple moving average has recently crossed above its 200-day moving average, a pattern known as a "golden cross," which is typically seen as a bullish signal [1] - The golden cross pattern consists of three stages: a downtrend that bottoms out, a crossover of the shorter moving average over the longer one, and an upward price movement [2] Performance Metrics - Over the past four weeks, SRCE shares have increased by 9.6%, suggesting positive momentum [3] - The company currently holds a 2 (Buy) rating on the Zacks Rank, indicating strong potential for further gains [3] Earnings Expectations - Recent earnings expectations for SRCE show one upward revision with no downward changes in the last 60 days, contributing to a more bullish outlook [3] - The Zacks Consensus Estimate for SRCE has also increased, reinforcing the positive sentiment around the stock [3] Investment Consideration - Given the technical indicators and positive earnings revisions, SRCE may present a compelling opportunity for investors looking for potential gains in the near future [5]

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].

Core Viewpoint - 1st Source Corporation has promoted Brian Duba to General Counsel and Secretary, reflecting the company's commitment to strong legal leadership and governance [1][3]. Company Overview - 1st Source Corporation is the largest locally controlled financial institution in the northern Indiana-southwestern Michigan area, with total assets of $9.0 billion [7]. - 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 [7]. Leadership and Responsibilities - Brian Duba, previously Deputy General Counsel since September 2024, will now manage all legal affairs, maintain relationships with regulatory agencies, and provide legal guidance to senior management [1][2]. - His responsibilities will include legal support for various banking services, corporate governance, securities compliance, regulatory affairs, and litigation management [3][4]. - John Griffith, the former General Counsel, will continue as Executive Vice President and Chief Risk Officer, focusing on risk management and compliance functions [4].

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]

Market Overview - Major U.S. stock indices ended May 13 on a higher note due to easing trade tensions between the U.S. and China, along with softer-than-expected inflation data [1] - The two nations agreed to a 90-day tariff pause, which has contributed to increased investor optimism [1] Investment Strategy - Positive market sentiment may encourage investors to trade on Wall Street, but the sustainability of this rebound is uncertain due to the temporary nature of the tariff pause and changing global market dynamics [2] - To mitigate potential losses during market turmoil, it is advisable to select low-leverage stocks such as 1st Source (SRCE), Kingstone Companies (KINS), MasTec (MTZ), Dorman Products (DORM), and Sterling Infrastructure, Inc. (STRL) [2] Understanding Leverage - Leverage refers to the practice of borrowing capital for operations and expansion, typically through debt financing [4] - Excessive debt financing can lead to significant losses, making it crucial for investors to avoid companies with high debt levels [5] Debt-to-Equity Ratio - The debt-to-equity ratio is a key metric for assessing a company's financial risk, with a lower ratio indicating better solvency [7] - Companies with high debt-to-equity ratios may face challenges during economic downturns, despite strong earnings growth [8] Stock Selection Criteria - Stocks should have a debt-to-equity ratio lower than the industry median, a current price of at least $10, and an average 20-day trading volume of 50,000 or more [11] - Additional criteria include a percentage change in EPS greater than the industry median, a VGM Score of A or B, estimated one-year EPS growth greater than 5%, and a Zacks Rank of 1 or 2 [12] Company Highlights - **1st Source (SRCE)**: A bank holding company with a net income of $37.52 million for Q1 2025, up 27.38% year-over-year, and a return on average assets of 1.72% [14][15] - **Kingstone Companies (KINS)**: A property and casualty insurance holding company with a 51% year-over-year increase in net premium earned and a 125% surge in EPS for Q1 2025 [16][17] - **MasTec (MTZ)**: An infrastructure construction company with a 6% year-over-year revenue increase and a projected 54.9% improvement in earnings for 2025 [18] - **Dorman Products (DORM)**: A supplier of automotive replacement parts with an 8.3% increase in net sales and a 54% rise in adjusted EPS for Q1 2025 [19][20] - **Sterling Infrastructure (STRL)**: A company specializing in E-Infrastructure and building solutions, reporting a 7% revenue increase and a 29% surge in adjusted EPS for Q1 2025 [21]

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]