1st Source (US:SRCE)2025-10-23 20:09Financial Performance - Net income available to common shareholders for the nine months ended September 30, 2025, was $117.14 million, compared to $101.19 million for the same period in 2024, reflecting an increase in net interest income and noninterest income [186]. - Diluted net income per common share increased to $4.74 for the nine months ended September 30, 2025, compared to $4.09 for the same period in 2024 [186]. - Taxable-equivalent net interest income for Q3 2025 was $88.90 million, an increase of 17.55% compared to Q3 2024 [191]. - Taxable-equivalent net interest income for the nine months ended September 30, 2025, was $255.33 million, an increase of 15.07% compared to the same period in 2024 [198]. - The net interest margin on a fully taxable-equivalent basis improved to 4.00% for the nine months ended September 30, 2025, compared to 3.59% for the same period in 2024 [198]. Asset and Liability Management - Total assets increased to $9.06 billion, up $124.75 million or 1.40% from December 31, 2024 [166]. - Total loans and leases rose to $6.96 billion, an increase of $109.65 million or 1.60% from December 31, 2024, driven by growth in renewable energy and residential real estate portfolios [167]. - Total deposits reached $7.41 billion, an increase of $179.78 million or 2.49% from the end of 2024, primarily due to higher savings and time deposits [169]. - Cash and cash equivalents totaled $214.26 million, an increase from $124.83 million at December 31, 2024, primarily due to increased deposits [183]. - The loan to asset ratio was 76.90% at September 30, 2025, compared to 76.74% at December 31, 2024 [183]. Shareholder Equity - Total shareholders' equity was $1.24 billion, up $125.40 million or 11.29% from December 31, 2024, with a shareholders' equity-to-assets ratio of 13.65% [174]. - The accumulated other comprehensive loss component of shareholders' equity decreased to $45.86 million at September 30, 2025, from $87.23 million at December 31, 2024 [174]. - The dividend payout ratio for the trailing four quarters was 24.63%, with cash dividends per common share of $0.38 declared during the third quarter of 2025 [175]. Interest Income and Expenses - Average earning assets increased by $352.52 million, or 4.26%, over the same period in 2024 [192]. - The yield on average earning assets rose to 6.03%, up 10 basis points from 5.93% in Q3 2024 [192]. - Total cost of average interest-bearing liabilities decreased by 48 basis points to 2.79% from 3.27% [192]. - Net interest margin on a fully taxable-equivalent basis was 4.09% for Q3 2025, compared to 3.64% for Q3 2024 [191]. Noninterest Income and Expenses - Total noninterest income for the three months ended September 30, 2025, was $21.906 million, a decrease of 2.41% compared to $22.448 million in 2024 [223]. - Trust and wealth advisory fees increased by 4.61% to $6.825 million for the three months ended September 30, 2025, compared to $6.524 million in 2024 [223]. - Insurance commissions rose by 12.43% to $1.845 million for the three months ended September 30, 2025, compared to $1.641 million in 2024 [223]. - Total noninterest expense increased by 7.77% to $54.776 million for the three months ended September 30, 2025, compared to $50.828 million in 2024 [234]. - Salaries and employee benefits rose by 3.02% to $32.217 million for the three months ended September 30, 2025, compared to $31.274 million in 2024 [234]. - Business development and marketing expenses surged by 70.32% to $2.846 million for the three months ended September 30, 2025, compared to $1.671 million in 2024 [234]. Credit Quality - The provision for credit losses for the nine months ended September 30, 2025, was $11.85 million, compared to $8.89 million for the same period in 2024 [207]. - Nonperforming assets totaled $63.19 million at September 30, 2025, an increase of 101.67% from $31.33 million reported at December 31, 2024 [215]. - The allowance for loan and lease losses as a percentage of loans and leases outstanding was 2.32% at September 30, 2025, compared to 2.30% one year ago [211]. - Net charge-offs for the first nine months of 2025 were $3.93 million or 0.08% of average loans and leases, compared to $4.99 million or 0.10% for the same period in 2024 [207]. Market and Taxation - The market value of trust assets under management increased to $6.07 billion as of September 30, 2025, from $6.03 billion a year ago [224]. - The provision for income taxes for the three months ended September 30, 2025, was $12.71 million, compared to $10.47 million for the same period in 2024 [242]. - The effective tax rate for the quarter ended September 30, 2025, was 23.11%, compared to 23.07% for the same quarter in 2024 [242].