Core Insights - First Merchants (FRME) reported quarterly earnings of $0.99 per share, exceeding the Zacks Consensus Estimate of $0.96 per share, and showing an increase from $0.95 per share a year ago, resulting in an earnings surprise of +3.13% [1] - The company posted revenues of $166.14 million for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.07%, but up from $155.98 million year-over-year [2] - First Merchants has surpassed consensus EPS estimates in all four of the last quarters, but has only topped revenue estimates once in the same period [2] Earnings Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.96 on revenues of $167.2 million, and for the current fiscal year, it is $3.84 on revenues of $658.1 million [7] Industry Context - The Zacks Industry Rank indicates that the Banks - Midwest sector is in the top 35% of over 250 Zacks industries, suggesting a favorable environment for stocks in this category [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Group 1: Smithfield Foods, Inc. - Smithfield Foods, Inc. is a pork producer and food-processing company with a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for its current year earnings has increased by 3% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 9.97, compared to the industry average of 10.80, and possesses a Value Score of A [1] Group 2: VEON - VEON is engaged in telecommunication and digital services and also carries a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its next year earnings has increased by 15.2% over the last 60 days [2] - The company has a price-to-earnings ratio (P/E) of 5.21, significantly lower than the industry average of 17.60, and possesses a Value Score of A [2] Group 3: 1st Source - 1st Source is a bank holding company offering a broad range of commercial banking, personal banking, and trust services, with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 4.2% over the last 60 days [3] - The company has a price-to-earnings ratio (P/E) of 10.07, compared to the industry average of 11, and possesses a Value Score of B [3]

Core Viewpoint - Enterprise Financial Services (EFSC) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on July 28, and if the key numbers exceed expectations, the stock may rise; conversely, a miss could lead to a decline [2]. - The consensus estimate for EFSC's quarterly earnings is $1.20 per share, reflecting a year-over-year decrease of 0.8%, while revenues are projected to be $163.2 million, an increase of 4.6% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial projections [4]. - For EFSC, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.56%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with a positive ESP being a strong predictor of an earnings beat [9][10]. - EFSC's current Zacks Rank is 4, which complicates the prediction of an earnings beat [12][13]. Historical Performance - In the last reported quarter, EFSC was expected to post earnings of $1.17 per share but actually delivered $1.31, resulting in a surprise of +11.97% [14]. - Over the past four quarters, EFSC has consistently beaten consensus EPS estimates [15]. Industry Comparison - Another player in the Midwest banking industry, 1st Source (SRCE), is expected to report earnings of $1.49 per share, unchanged from the previous year, with revenues projected at $106 million, up 9% [20]. - 1st Source has a higher Most Accurate Estimate leading to an Earnings ESP of +0.34% and a Zacks Rank of 2, indicating a strong likelihood of beating the consensus EPS estimate [20][21].

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].

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 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].

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]