1st Source (US:SRCE)2024-07-25 20:05Financial Performance - Net income available to common shareholders for the six months ended June 30, 2024, was $66.25 million, compared to $63.56 million for the same period in 2023[218]. - Diluted net income per common share increased to $2.68 for the six months ended June 30, 2024, compared to $2.55 for the same period in 2023[218]. - Taxable-equivalent net interest income for Q2 2024 was $74.19 million, an increase of 8.00% compared to Q2 2023[224]. - Taxable-equivalent net interest income for the six months ended June 30, 2024, was $146.26 million, an increase of 5.61% over the same period in 2023[238]. - Total noninterest income for the three months ended June 30, 2024, was $23.221 million, a 1.99% increase from $22.769 million in the same period of 2023[259]. Asset and Liability Management - Total assets increased to $8.88 billion, up $150.05 million or 1.72% from December 31, 2023[196]. - Total loans and leases rose to $6.65 billion, an increase of $134.49 million or 2.06% from December 31, 2023, driven by growth in renewable energy and commercial real estate portfolios[197]. - Total deposits reached $7.20 billion, an increase of $157.34 million or 2.24% from the end of 2023, primarily due to a rise in public fund and time deposits[199]. - Cash and cash equivalents totaled $269.24 million, an increase from $129.67 million at December 31, 2023, primarily due to increased core deposits[214]. - Total net available liquidity was $3.20 billion at June 30, 2024, accounting for approximately 49% of total deposits net of brokered and listing services certificates of deposit[213]. Equity and Shareholder Metrics - Total shareholders' equity was $1.04 billion, up $53.95 million or 5.45% from December 31, 2023, with a book value per common share of $42.58[204]. - The return on average common shareholders' equity was 13.10% for the six months ended June 30, 2024, compared to 14.11% in 2023[218]. - The accumulated other comprehensive loss component of shareholders' equity decreased to $105.57 million at June 30, 2024, from $106.32 million at December 31, 2023[204]. Interest Income and Expense - Average earning assets increased by $381.99 million, or 4.82%, over the same period in 2023[225]. - The yield on average earning assets rose by 78 basis points to 5.88% from 5.10% at June 30, 2023[225]. - Average interest-bearing deposits increased by $411.67 million, or 7.93%, primarily in savings, time, and brokered deposits[228]. - The effective rate paid on average interest-bearing deposits increased by 86 basis points to 3.09% from 2.23%[228]. - The total cost of average interest-bearing liabilities increased by 86 basis points to 3.20% from 2.34%[225]. Loan Performance and Credit Quality - Average loans and leases increased by $465.05 million, or 7.57%, primarily in commercial real estate, auto, and construction equipment portfolios[227]. - Nonperforming assets totaled $20.83 million at June 30, 2024, a decrease of 14.03% from $24.24 million reported at December 31, 2023[252]. - The provision for credit losses for the six months ended June 30, 2024, was $6.65 million compared to $3.10 million during the same period in 2023[245]. - The allowance for loan and lease losses as a percentage of loans and leases outstanding was 2.26% at June 30, 2024, compared to 2.31% one year ago[250]. - Net recoveries of $1.99 million or 0.12% of average loans and leases were recorded for Q2 2024, compared to net recoveries of $0.98 million or 0.06% for the same quarter a year ago[245]. Noninterest Income and Expenses - Trust and wealth advisory fees increased to $7.081 million for the three months ended June 30, 2024, up 9.49% from $6.467 million in the same period of 2023, driven by growth in assets under management which reached $5.83 billion[260]. - Mortgage banking income rose by 38.23% to $1.280 million for the three months ended June 30, 2024, compared to $926 thousand in the same period of 2023, due to higher production and margins[263]. - Total noninterest expense for the three months ended June 30, 2024, was $49.491 million, a slight increase of 0.66% from $49.165 million in the same period of 2023[270]. - Salaries and employee benefits increased by 3.55% to $29.238 million for the three months ended June 30, 2024, compared to $28.236 million in the same period of 2023, attributed to merit increases and a higher headcount[270]. - Net occupancy expense rose by 8.67% to $2.908 million for the three months ended June 30, 2024, compared to $2.676 million in the same period of 2023, primarily due to increased premises repairs and higher rent[271]. Other Financial Metrics - Average noninterest-bearing deposits declined by $215.50 million, or 11.88%, primarily due to greater utilization of excess funds by business customers[233]. - Average short-term borrowings increased by $23.15 million or 11.66% for Q2 2024 compared to Q2 2023[235]. - Interest paid on short-term borrowings increased by 64 basis points due to higher short-term borrowing rates[235]. - Other income increased by 17.74% to $4.227 million for the three months ended June 30, 2024, compared to $3.590 million in the same period of 2023, driven by higher customer interest rate swap fees and brokerage commissions[267]. - The total repossessions amounted to $352 thousand for the three months ended June 30, 2024, down from $705 thousand in the same period of 2023[256].