1st Source Corporation Reports Record Second Quarter Results, Increased Cash Dividend Declared

July 25, 2024 4:00 PM EDT | Source: 1st Source Corporation

QUARTERLY HIGHLIGHTS

  • Net income was $36.79 million for the quarter, up $4.36 million or 13.44% from the second quarter of 2023. Diluted net income per common share was $1.49, up $0.19 or 14.62% from the prior year's second quarter of $1.30.

  • Cash dividend increase of two cents per share to $0.36 per common share for the quarter was approved, up 12.50% from the cash dividend declared a year ago.

  •  Average loans and leases grew $102.14 million in the second quarter, up 1.57% (6.28% annualized growth) from the previous quarter and $465.05 million, up 7.57% from the second quarter of 2023.

  • Average deposits grew $172.57 million in the second quarter, up 2.46% from the previous quarter and $244.60 million, up 3.52% from the second quarter of 2023.

  • Tax-equivalent net interest income was $74.19 million, up $2.13 million or 2.96% from the first quarter of 2024 and up $5.50 million, or 8.00% from the second quarter a year ago. Tax-equivalent net interest margin was 3.59%, up five basis points from the previous quarter and up 11 basis points from the second quarter a year ago.

  • Net recoveries of $1.99 million or 0.12% of average loans and leases occurred during the quarter compared to net charge-offs of $6.12 million or 0.38% of average loans and leases during the previous quarter.

South Bend, Indiana--(Newsfile Corp. - July 25, 2024) - 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $36.79 million for the second quarter of 2024, up $7.34 million or 24.91% from the previous quarter and up 13.44% from the $32.44 million reported in the second quarter a year ago. Year-to-date 2024 net income was $66.25 million compared to $63.56 million during the first six months of 2023. Diluted net income per common share for the second quarter of 2024 was $1.49, up $0.30 or 25.21% from the previous quarter and up 14.62%, versus $1.30 in the second quarter of 2023. Diluted net income per common share for the first half of 2024 was $2.68 compared to $2.55 a year earlier.

At its July 2024 meeting, the Board of Directors approved an increase in the cash dividend of two cents per share, raising the approved dividend for the quarter to $0.36 per common share, up 12.50% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on August 5, 2024, and will be paid on August 15, 2024.

Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, "We are very pleased to have achieved record quarterly earnings during the second quarter. Average loans and leases grew $102.14 million, up 1.57%, and average deposits increased $172.53 million, or 2.46% compared to the previous quarter. Disciplined loan and lease pricing led to an improvement in our net interest margin of five basis points from the prior quarter. This marks the third consecutive quarter of margin expansion despite persistent deposit rate competition. We were also helped by net recoveries of $1.99 million during the quarter. Nonperforming assets to loans and leases at June 30, 2024, was 0.31%, down from 0.34% at March 31, 2024, and the allowance for loan and lease losses as a percentage of total loans and leases remained strong and unchanged from the previous quarter at 2.26%. Additionally, our liquidity and capital positions remained strong.

"During the quarter, we were excited to learn that 1st Source was named by Forbes' as one of America's Best Banks! We ranked #14 on the list and the only bank in Indiana to be in the top 15. This award is a proof point that we are holding true to our long-standing commitment of helping our clients achieve security, build wealth, and realize their dreams by building a fortress-like balance sheet and quality, sustainable earnings to help us better serve them!

"The proof points continued to roll in this quarter as we also were named to the Forbes' Best in State Banks and Best Employers for New Grads lists. Finally, US News & World Report recently announced that 1st Source Bank was named a "Best Company to Work For" in the Midwest. It is an honor to receive this blend of awards because it emphasizes our stability as a bank not only financially, but also culturally.

"We strive to provide our colleagues with an engaging work environment that upholds our core values of integrity, teamwork, and superior quality paired with outstanding client service and community leadership. In keeping with our commitment to our community, we have remodeled both our Dunlap and our Bristol Street Banking Centers to feature our side-by-side banking model. This experience invites clients behind the teller line, allowing for clients and bankers to have a more transparent and inclusive relationship," Mr. Murphy concluded.

SECOND QUARTER 2024 FINANCIAL RESULTS

Loans

Second quarter average loans and leases increased $102.14 million to $6.61 billion, up 1.57% from the previous quarter and increased $465.05 million, up 7.57% from the second quarter a year ago. Year-to-date average loans and leases increased $466.17 million to $6.56 billion, up 7.66% from the first six months of 2023. Growth during the quarter occurred primarily within the Construction Equipment, Renewable Energy and Auto and Light Truck portfolios.

Deposits

Average deposits of $7.18 billion, increased $172.57 million, or 2.46% from the previous quarter, and grew $244.60 million or 3.52% compared to the quarter ended June 30, 2023. Average deposits for the first six months of 2024 were $7.10 billion, an increase of $193.15 million, up 2.80% from the same period a year ago. Average deposit balance growth from the previous quarter was primarily due to expected seasonal public fund deposit inflows. Average deposit balance growth from the second quarter of 2023 was primarily in savings, time, and brokered deposits.

End of period deposits were $7.20 billion at June 30, 2024, compared to $7.06 billion at March 31, 2024. Balances were higher mainly due to increased public fund deposits and time deposits, offset by decreased noninterest bearing deposits and brokered deposits. Rate competition for deposits persisted during the quarter from various areas including traditional bank and credit union competitors, money market funds, bond markets, and other non-bank alternatives.

Net Interest Income and Net Interest Margin

Second quarter 2024 tax-equivalent net interest income increased $2.13 million to $74.19 million, up 2.96% from the previous quarter and increased $5.50 million, up 8.00% from the second quarter a year ago. For the first six months of 2024, tax equivalent net interest income increased $7.77 million to $146.26 million, up 5.61% from the first half of 2023.

Second quarter 2024 net interest margin was 3.59%, an increase of five basis points from the 3.54% in the previous quarter and an increase of 12 basis points from the same period in 2023. On a fully tax-equivalent basis, second quarter 2024 net interest margin was 3.59%, up by five basis points compared to the 3.54% in the previous quarter, and an increase of 11 basis points from the same period in 2023. The five basis point increase from the prior quarter was primarily due to higher rates on loan and lease balances and less reliance on higher costing short-term borrowings.

Net interest margin for the first six months of 2024 was 3.56%, an increase of three basis points compared to the first six months of 2023. Net interest margin on a fully-tax equivalent basis for the first half of 2024 was 3.57%, an increase of three basis points compared to the first half of the prior year.

Noninterest Income

Second quarter 2024 noninterest income of $23.22 million increased $1.07 million, up 4.81% from the previous quarter, and was up modestly compared to the second quarter a year ago. For the first six months of 2024, noninterest income decreased slightly from the same period a year ago.

The increase in noninterest income compared to the previous quarter was mainly due to higher trust and wealth advisory income primarily from seasonal tax preparation fee income and improvements in overall investment market performance. Additionally, increased debit card income, and a rise in mortgage banking income from higher sales volumes were offset by lower equipment rental income due to a change in customer preferences and continued competitive pricing pressure for new business.

Noninterest Expense

Second quarter 2024 noninterest expense of $49.49 million was relatively flat compared to the prior quarter and increased slightly from the second quarter a year ago. For the first six months of 2024, noninterest expense was $99.08 million, up marginally from the same period a year ago.

The increase in noninterest expense compared to the second quarter and first six months of 2023 was the result of higher salaries and wages from normal merit increases, the impact of wage inflation and an increase in the number of employees filling prior open positions and a $1.08 million reversal of accrued legal fees during the first quarter of 2023. Additionally, increased data processing costs from technology projects, higher blanket bond insurance premium costs, as well as an increase in business development and marketing expenses, added to the increase. These increases were offset by reduced group insurance claims, lower leased equipment depreciation, a decrease in the loan loss provision for unfunded commitments and gains on the sale of leased equipment.

Credit

The allowance for loan and lease losses of $150.07 million as of June 30, 2024, was 2.26% of total loans and leases. This percentage compared to 2.26% at March 31, 2024, and 2.31% at June 30, 2023. Net recoveries of $1.99 million were recorded for the second quarter of 2024, compared with $6.12 million of net charge-offs in the prior quarter and net recoveries of $0.98 million in the same quarter a year ago. The majority of the second quarter's recoveries were related to activity in our Construction, Auto and Light Truck and Aircraft portfolios.

The provision for credit losses was $0.06 million for the second quarter of 2024, a decrease of $6.54 million from the previous quarter and an increase of $0.01 million compared with the same period in 2023. Net recoveries recorded during the quarter, compared to net charge-offs in the previous quarter, were the primary reason for the decrease in the provision for credit losses. The provision for credit losses during the quarter was driven by modest loan growth, an increase in specific impairments, and overall higher special attention outstandings, offset by a decrease in aircraft portfolio loan balances which carry a higher allowance due to historical risk volatility. The ratio of nonperforming assets to loans and leases was 0.31% as of June 30, 2024, compared to 0.34% on March 31, 2024, and 0.33% on June 30, 2023.

Capital

As of June 30, 2024, the common equity-to-assets ratio was 11.75%, compared to 11.65% at March 31, 2024, and 10.95% a year ago. The tangible common equity-to-tangible assets ratio was 10.91% at June 30, 2024, compared to 10.79% at March 31, 2024, and 10.05% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines was 13.74% at June 30, 2024 compared to 13.48% at March 31, 2024 and 13.59% a year ago. 

Capital accretion over the last twelve months has been driven primarily by growth in retained earnings and a reduction in unrealized losses in our short-duration investment securities available-for-sale portfolio.

No shares were repurchased for treasury during the second quarter of 2024.

ABOUT 1ST SOURCE CORPORATION

1st Source common stock is traded on the NASDAQ Global Select Market under "SRCE" and appears in the National Market System tables in many daily newspapers under the code name "1st Src." Since 1863, 1st Source has been committed to the success of its clients, individuals, businesses and the communities it serves. For more information, visit www.1stsource.com.

1st Source serves the northern half of Indiana and southwest Michigan and is the largest locally controlled financial institution headquartered in the area. While delivering a comprehensive range of consumer and commercial banking services through its community bank offices, 1st Source has distinguished itself with highly personalized services. 1st Source Bank also competes for business nationally by offering specialized financing services for new and used private and cargo aircraft, automobiles for leasing and rental agencies, medium and heavy-duty trucks, and construction equipment. The Corporation includes 78 banking centers, 18 1st Source Bank Specialty Finance Group locations nationwide, nine Wealth Advisory Services locations, 10 1st Source Insurance offices, and three loan production offices.

FORWARD-LOOKING STATEMENTS

Except for historical information contained herein, the matters discussed in this document express "forward-looking statements." Generally, the words "believe," "contemplate," "seek," "plan," "possible," "assume," "hope," "expect," "intend," "targeted," "continue," "remain," "estimate," "anticipate," "project," "will," "should," "indicate," "would," "may" and similar expressions indicate forward-looking statements. Those statements, including statements, projections, estimates or assumptions concerning future events or performance, and other statements that are other than statements of historical fact, are subject to material risks and uncertainties. 1st Source cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made.

1st Source may make other written or oral forward-looking statements from time to time. Readers are advised that various important factors could cause 1st Source's actual results or circumstances for future periods to differ materially from those anticipated or projected in such forward-looking statements. Such factors, among others, include changes in laws, regulations or accounting principles generally accepted in the United States; 1st Source's competitive position within its markets served; increasing consolidation within the banking industry; unforeseen changes in interest rates; unforeseen downturns in the local, regional or national economies or in the industries in which 1st Source has credit concentrations; and other risks discussed in 1st Source's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, which filings are available from the SEC. 1st Source undertakes no obligation to publicly update or revise any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

The accounting and reporting policies of 1st Source conform to generally accepted accounting principles ("GAAP") in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures are used by management to evaluate and measure the Company's performance. Although these non-GAAP financial measures are frequently used by investors to evaluate a financial institution, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. These include taxable-equivalent net interest income (including its individual components), net interest margin (including its individual components), the efficiency ratio, tangible common equity-to-tangible assets ratio and tangible book value per common share. Management believes that these measures provide users of the Company's financial information a more meaningful view of the performance of the interest-earning assets and interest-bearing liabilities and of the Company's operating efficiency. Other financial holding companies may define or calculate these measures differently.

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent ("FTE") basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a FTE basis is also used in the calculation of the Company's efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses and lease depreciation), measures how much it costs to produce one dollar of revenue. Securities gains or losses and lease depreciation are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity-to-tangible assets ratio and tangible book value per common share as useful measurements of the Company's equity.

See the table marked "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of certain non-GAAP financial measures used by the Company with their most closely related GAAP measures.

# # #

Category: Earnings

(charts attached)

1st SOURCE CORPORATION                
2nd QUARTER 2024 FINANCIAL HIGHLIGHTS                
(Unaudited - Dollars in thousands, except per share data)                
 Three Months Ended   Six Months Ended
 June 30,    March 31,    June 30,   June 30,    June 30,
 2024    2024    2023   2024    2023
AVERAGE BALANCES                  
Assets$ 8,761,006 $   8,652,144  $   8,362,308  $  8,706,575  $   8,342,977
Earning assets 8,303,518     8,182,165      7,921,528    8,242,841     7,893,218
Investments 1,554,362     1,608,094      1,697,699    1,581,228     1,732,964
Loans and leases 6,606,209     6,504,069      6,141,157    6,555,139     6,088,970
Deposits 7,183,678     7,011,105      6,939,082    7,097,391     6,904,237
Interest bearing liabilities 5,922,916     5,783,480      5,496,112    5,853,199     5,421,221
Common shareholders' equity 1,027,138     1,006,286      926,157    1,016,712     908,325
Total equity 1,098,740     1,084,654      985,406    1,091,697     967,742
INCOME STATEMENT DATA                  
Net interest income$74,050  $   71,915   $  68,516  $  145,965  $  138,081
Net interest income - FTE(1) 74,194     72,063      68,695    146,257     138,486
Provision for credit losses 56     6,595      47    6,651     3,096
Noninterest income 23,221     22,156      22,769    45,377     46,092
Noninterest expense 49,491     49,586      49,165    99,077     98,586
Net income 36,805     29,462      32,447    66,267     63,578
Net income available to common shareholders 36,793     29,455      32,435    66,248     63,559
PER SHARE DATA                  
Basic net income per common share $ 1.49  $   1.19   $  1.30  $   2.68    2.55
Diluted net income per common share 1.49     1.19      1.30    2.68     2.55
Common cash dividends declared 0.34     0.34      0.32    0.68     0.64
Book value per common share(2) 42.58     41.26      37.31    42.58     37.31
Tangible book value per common share(1) 39.16     37.83      33.92    39.16     33.92
Market value - High 53.74     55.25      47.94    55.25     53.85
Market value - Low 47.30     48.32      38.77    47.30     38.77
Basic weighted average common shares outstanding 24,495,495     24,459,088      24,686,435    24,477,292     24,686,760
Diluted weighted average common shares outstanding 24,495,495     24,459,088      24,686,435    24,477,292     24,686,760
KEY RATIOS                  
Return on average assets 1.69 %     1.37 %     1.56 %   1.53 %     1.54 %
Return on average common shareholders' equity 14.41     11.77      14.05    13.10     14.11
Average common shareholders' equity to average assets 11.72     11.63      11.08    11.68     10.89
End of period tangible common equity to tangible assets(1) 10.91     10.79      10.05    10.91     10.05
Risk-based capital - Common Equity Tier 1(3) 13.74     13.48      13.59    13.74     13.59
Risk-based capital - Tier 1(3) 15.38     15.15      15.20    15.38     15.20
Risk-based capital - Total(3) 16.64     16.41      16.46    16.64     16.46
Net interest margin 3.59     3.54      3.47    3.56     3.53
Net interest margin - FTE(1) 3.59     3.54      3.48    3.57     3.54
Efficiency ratio: expense to revenue 50.88     52.71      53.86    51.78     53.53
Efficiency ratio: expense to revenue - adjusted(1) 50.78     52.56      53.23    51.65     53.07
Net (recoveries) charge-offs to average loans and leases (0.12)     0.38      (0.06)    0.13     (0.04)
Loan and lease loss allowance to loans and leases 2.26     2.26      2.31    2.26     2.31
Nonperforming assets to loans and leases 0.31     0.34      0.33    0.31     0.33
                  
 June 30,    March 31,    December 31,   September 30,    June 30,
 2024    2024    2023   2023    2023
END OF PERIOD BALANCES                  
Assets $ 8,878,003  $  8,667,837     8,727,958  $   8,525,058  $  8,414,818
Loans and leases 6,652,999     6,562,772      6,518,505    6,353,648     6,215,343
Deposits 7,195,924     7,055,311      7,038,581    6,967,492     6,976,518
Allowance for loan and lease losses 150,067     148,024      147,552    144,074     143,542
Goodwill and intangible assets 83,907     83,912      83,916    83,921     83,897
Common shareholders' equity 1,043,515     1,009,886      989,568    924,250     921,020
Total equity 1,114,855     1,081,549      1,068,263    982,997     980,087
ASSET QUALITY                  
Loans and leases past due 90 days or more $ 185  $  26   $  149  $  154  $   56
Nonaccrual loans and leases 20,297     22,097      23,381    16,617     20,481
Other real estate 
           117     193
Repossessions 352     308      705    233     47
Total nonperforming assets $20,834  $  22,431   $  24,235  $  17,121  $  20,777

 

(1) See "Reconciliation of Non-GAAP Financial Measures" for more information on this performance measure/ratio.
(2) Calculated as common shareholders' equity divided by common shares outstanding at the end of the period.
(3) Calculated under banking regulatory guidelines. 

1st SOURCE CORPORATION    
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION    
(Unaudited - Dollars in thousands)    
  June 30, March 31, December 31,June 30,
  2024 2024 20232023
ASSETS       
Cash and due from banks 89,592   $41,533 $77,474$86,742
Federal funds sold and interest bearing deposits with other banks   179,651  39,381 52,19425,933
Investment securities available-for-sale, at fair value   1,523,548  1,583,244 1,622,6001,661,405
Other investments   24,585  25,075 25,07525,320
Mortgages held for sale   2,763  2,881 1,4422,321
Loans and leases, net of unearned discount:       
Commercial and agricultural   721,235  731,527 766,223797,188
Renewable energy   459,441  413,662 399,708376,905
Auto and light truck   1,009,967  997,465 966,912901,054
Medium and heavy duty truck   315,157  303,799 311,947319,634
Aircraft   1,058,591  1,104,058 1,078,1721,060,340
Construction equipment   1,132,556  1,092,585 1,084,7521,012,969
Commercial real estate   1,164,598  1,135,595 1,129,861985,323
Residential real estate and home equity   654,357  643,856 637,973617,495
Consumer   137,097  140,225 142,957144,435
Total loans and leases   6,652,999  6,562,772 6,518,5056,215,343
Allowance for loan and lease losses   (150,067) (148,024) (147,552)
(143,542)
Net loans and leases   6,502,932  6,414,748 6,370,9536,071,801
Equipment owned under operating leases, net   13,886  16,691 20,36626,582
Premises and equipment, net   48,201  45,689 46,15944,089
Goodwill and intangible assets   83,907  83,912 83,91683,897
Accrued income and other assets   408,938  414,683 427,779386,728
Total assets $  8,878,003
$8,667,837 $8,727,958$8,414,818
LIABILITIES       
Deposits:       
Noninterest-bearing demand $ 1,578,762
 $1,618,498 $1,655,728$1,721,947
Interest-bearing deposits:       
Interest-bearing demand   2,543,724  2,364,751 2,430,8332,528,231
Savings   1,255,154  1,270,401 1,213,3341,163,166
Time   1,818,284  1,801,661 1,738,6861,563,174
Total interest-bearing deposits   5,617,162  5,436,813 5,382,8535,254,571
Total deposits   7,195,924  7,055,311 7,038,5816,976,518
Short-term borrowings:       
Federal funds purchased and securities sold under agreements to repurchase   70,767  82,591 55,80969,308
Other short-term borrowings   217,450  166,989 256,550118,377
Total short-term borrowings   288,217  249,580 312,359187,685
Long-term debt and mandatorily redeemable securities   39,136  39,406 47,91146,649
Subordinated notes   58,764  58,764 58,76458,764
Accrued expenses and other liabilities   181,107  183,227 202,080165,115
Total liabilities   7,763,148  7,586,288 7,659,6957,434,731
SHAREHOLDERS' EQUITY       
Preferred stock; no par value
  
  
Authorized 10,000,000 shares; none issued or outstanding  
Common stock; no par value
   436,538  436,538 436,538436,538
Authorized 40,000,000 shares; issued 28,205,674 shares at June 30, 2024, March
31, 2024, December 31, 2023, and June 30, 2023, respectively
  
Retained earnings   841,790  812,413 789,842744,442
Cost of common stock in treasury (3,698,651, 3,728,016, 3,771,070, and 3,523,113    (129,248) (129,790) (130,489)
(120,410)
shares at June 30, 2024, March 31, 2024, December 31, 2023, and
June 30, 2023, respectively)
  
Accumulated other comprehensive loss    (105,565) (109,275) (106,323)
(139,550)
Total shareholders' equity   1,043,515  1,009,886 989,568921,020
Noncontrolling interests   71,340  71,663 78,69559,067
Total equity   1,114,855  1,081,549 1,068,263980,087
Total liabilities and equity $ 8,878,003
$8,667,837 $8,727,958$8,414,818

 

1st SOURCE CORPORATION  
CONSOLIDATED STATEMENTS OF INCOME  
(Unaudited - Dollars in thousands, except per share amounts) 
 Three Months EndedSix Months Ended
 June 30, March 31,June 30,June 30,June 30,
 2024 2024202320242023
Interest income:      
Loans and leases113,101  $109,202$93,300$222,303$179,989
Investment securities, taxable  5,900  6,0795,94611,97912,594
Investment securities, tax-exempt  254  260330514812
Other  1,914  9279782,8411,615
Total interest income  121,169  116,468100,554237,637195,010
Interest expense:      
Deposits  43,095  39,74428,87082,83950,133
Short-term borrowings  2,158  3,1021,6255,2603,018
Subordinated notes  1,061  1,0611,0282,1222,048
Long-term debt and mandatorily redeemable securities  805  6465151,4511,730
Total interest expense  47,119  44,55332,03891,67256,929
Net interest income  74,050  71,91568,516145,965138,081
Provision for credit losses  56  6,595476,6513,096
Net interest income after provision for credit losses  73,994  65,32068,469139,314134,985
Noninterest income:      
Trust and wealth advisory  7,081  6,2876,46713,36812,146
Service charges on deposit accounts  3,203  3,0703,1186,2736,121
Debit card  4,562  4,2014,7018,7639,208
Mortgage banking  1,280  9509262,2301,728
Insurance commissions  1,611  1,7761,6413,3873,670
Equipment rental  1,257  1,6712,3262,9284,829
Losses on investment securities available-for-sale  (44)
Other  4,227  4,2013,5908,4288,434
Total noninterest income  23,221  22,15622,76945,37746,092
Noninterest expense:      
Salaries and employee benefits  29,238  29,57228,23658,81056,833
Net occupancy  2,908  2,9962,6765,9045,298
Furniture and equipment  1,265  1,1491,4142,4142,721
Data processing  6,712  6,5006,26813,21212,425
Depreciation - leased equipment  999  1,2881,8762,2873,898
Professional fees  1,713  1,3451,7043,0582,386
FDIC and other insurance  1,627  1,6571,3443,2842,704
Business development and marketing  2,026  1,7441,6493,7703,621
Other  3,003  3,3353,9986,3388,700
Total noninterest expense  49,491  49,58649,16599,07798,586
Income before income taxes  47,724  37,89042,07385,61482,491
Income tax expense  10,919  8,4289,62619,34718,913
Net income  36,805  29,46232,44766,26763,578
Net (income) loss attributable to noncontrolling interests  (12) (7)
(12)
(19)
(19)
Net income available to common shareholders$36,793  $29,455$32,435$66,248$63,559
Per common share:      
Basic net income per common share $1.49  $1.19$1.30$2.68$2.55
Diluted net income per common share $$ 1.49  $1.19$1.30$2.68$2.55
Basic weighted average common shares outstanding  24,495,495  24,459,08824,686,43524,477,29224,686,760
Diluted weighted average common shares outstanding  24,495,495  24,459,08824,686,43524,477,29224,686,760

 

1st SOURCE CORPORATION         
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY     
INTEREST RATES AND INTEREST DIFFERENTIAL     
(Unaudited - Dollars in thousands)         
  Three Months Ended 
 June 30, 2024 March 31, 2024 June 30, 2023
 Average
Balance
 Interest Income/
Expense
 Yield/
Rate
 Average
Balance
 Interest Income/
Expense
 Yield/
Rate
 Average
Balance
 Interest Income/
Expense
 Yield/
Rate
ASSETS         
Investment securities available-for-sale:         
Taxable $1,524,751  $5,900   1.56 % $1,576,579  6,079   1.55 %1,655,790  $5,946   1.44 %
Tax exempt(1)  29,611   319   4.33 %  31,515   327   4.17 %  41,909   411   3.93 %
Mortgages held for sale  4,179   65   6.26 %  1,830   34   7.47 %  1,879   28   5.98 %
Loans and leases, net of unearned discount(1)  6,606,209  113,115 6.89 % 6,504,069 109,249 6.76 % 6,141,157 93,370 6.10 %
Other investments  138,768  1,914 5.55 % 68,172 927 5.47 % 80,793 978 4.86 %
Total earning assets(1)  8,303,518  121,313 5.88 % 8,182,165 116,616 5.73 % 7,921,528 100,733 5.10 %
Cash and due from banks  60,908      61,889     72,880    
Allowance for loan and lease losses  (149,688)     (148,982)     (144,337)    
Other assets  546,268      557,072     512,237    
Total assets8,761,006     8,652,144    8,362,308    
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Interest-bearing deposits5,603,880 43,095 3.09 %5,394,85439,744 2.96 % $5,192,206 $28,870 2.23 %
Short-term borrowings:                 
Securities sold under agreements to repurchase  61,729  146 0.95 % 47,973 47 0.39 % 69,301 32 0.19 %
Other short-term borrowings  159,953  2,012 5.06 % 234,672 3,055 5.24 % 129,230 1,593 4.94 %
Subordinated notes  58,764  1,061 7.26 % 58,764 1,061 7.26 % 58,764 1,028 7.02 %
Long-term debt and mandatorily redeemable
securities
  38,590  805 8.39 % 47,217 646 5.50 % 46,611 515 4.43 %
Total interest-bearing liabilities  5,922,916  47,119 3.20 % 5,783,480 44,553 3.10 % 5,496,112 32,038 2.34 %
Noninterest-bearing deposits  1,579,798      1,616,251     1,746,876    
Other liabilities  159,552      167,759     133,914    
Shareholders' equity  1,027,138      1,006,286     926,157    
Noncontrolling interests  71,602      78,368     59,249    
Total liabilities and equity 8,761,006     8,652,144    8,362,308    
Less: Fully tax-equivalent adjustments  (144)     (148)     (179)  
Net interest income/margin (GAAP-derived)(1) 74,050 3.59 %   $71,915 3.54 %  68,516 3.47 %
Fully tax-equivalent adjustments  144     148     179  
Net interest income/margin - FTE(1) 74,194 3.59 %  72,063 3.54 %  68,695 3.48 %
(1) See "Reconciliation of Non-GAAP Financial Measures" for more information on this performance measure/ratio.

 

      
1st SOURCE CORPORATION      
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY   
INTEREST RATES AND INTEREST DIFFERENTIAL   
(Unaudited - Dollars in thousands)      
 Six Months Ended
 June 30, 2024 June 30, 2023
 Average
Balance
 Interest Income/
Expense
 Yield/
Rate
 Average
Balance
 Interest Income/
Expense
 Yield/
Rate
ASSETS        
Investment securities available-for-sale:        
Taxable1,550,66511,979   1.55 %1,683,330$ 12,594 1.51 %
Tax exempt(1) 30,563  646   4.25 % 49,634  1,016   4.13 %
Mortgages held for sale 3,004  99   6.63 % 2,143  60   5.65 %
Loans and leases, net of unearned discount(1) 6,555,139  222,364   6.82 % 6,088,970  180,130   5.97 %
Other investments 103,470  2,841   5.52 % 69,141  1,615   4.71 %
Total earning assets(1) 8,242,841  237,929   5.80 % 7,893,218  195,415   4.99 %
Cash and due from banks 61,399   72,403  
Allowance for loan and lease losses (149,335)   (142,705)  
Other assets 551,670   520,061  
Total assets8,706,575  8,342,977  
        
LIABILITIES AND SHAREHOLDERS' EQUITY      
Interest-bearing deposits 5,499,367  82,839   3.03 % 5,090,713  50,133   1.99 %
Short-term borrowings:        
Securities sold under agreements to repurchase 54,851  193   0.71 % 101,721  72   0.14 %
Other short-term borrowings 197,313  5,067   5.16 % 124,024  2,946   4.79 %
Subordinated notes 58,764  2,122   7.26 % 58,764  2,048   7.03 %
Long-term debt and mandatorily redeemable securities 42,904  1,451   6.80 % 45,999  1,730   7.58 %
Total interest-bearing liabilities 5,853,199  91,672   3.15 % 5,421,221  56,929   2.12 %
Noninterest-bearing deposits 1,598,024   1,813,524  
Other liabilities 163,655   140,490  
Shareholders' equity 1,016,712   908,325  
Noncontrolling interests 74,985   59,417  
Total liabilities and equity8,706,575  8,342,977  
Less: Fully tax-equivalent adjustments    (292)     (405) 
Net interest income/margin (GAAP-derived)(1)   $145,965   3.56 %   $138,081   3.53 %
Fully tax-equivalent adjustments    292      405  
Net interest income/margin - FTE(1)   $146,257   3.57 %   $138,486   3.54 %
(1) See "Reconciliation of Non-GAAP Financial Measures" for more information on this performance measure/ratio.

 

1st SOURCE CORPORATION    
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES   
(Unaudited - Dollars in thousands, except per share data)   
    
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2024 2024 2023 2024 2023
Calculation of Net Interest Margin         
(A)Interest income (GAAP)$121,169116,468100,554237,637195,010
Fully tax-equivalent adjustments:         
(B) - Loans and leases79 81 98 160 201
(C) - Tax exempt investment securities65 67 81 132 204
(D)Interest income - FTE (A+B+C)121,313 116,616 100,733 237,929 195,415
(E)Interest expense (GAAP)47,119 44,553 32,038 91,672 56,929
(F)Net interest income (GAAP) (A-E)74,050 71,915 68,516 145,965 138,081
(G)Net interest income - FTE (D-E)74,194 72,063 68,695 146,257 138,486
(H)Annualization factor4.022 4.022 4.011 2.011 2.017
(I)Total earning assets$8,303,5188,182,1657,921,5288,242,8417,893,218
Net interest margin (GAAP-derived) (F*H)/I3.59 % 3.54 % 3.47 % 3.56 % 3.53 %
Net interest margin - FTE (G*H)/I3.59 % 3.54 % 3.48 % 3.57 % 3.54 %
         
Calculation of Efficiency Ratio         
(F)Net interest income (GAAP)$74,05071,91568,516145,965138,081
(G)Net interest income - FTE74,194 72,063 68,695 146,257 138,486
(J)Plus: noninterest income (GAAP)23,221 22,156 22,769 45,377 46,092
(K)Less: gains/losses on investment securities and partnership
investments
(929) (1,037) (748) (1,966) (2,270)
(L)Less: depreciation - leased equipment(999) (1,288) (1,876) (2,287) (3,898)
(M)Total net revenue (GAAP) (F+J)97,271 94,071 91,285 191,342 184,173
(N)Total net revenue - adjusted (G+J-K-L)95,487 91,894 88,840 187,381 178,410
(O)Noninterest expense (GAAP)49,491 49,586 49,165 99,077 98,586
(L)Less:depreciation - leased equipment(999) (1,288) (1,876) (2,287) (3,898)
(P)Noninterest expense - adjusted (O-L)48,492 48,298 47,289 96,790 94,688
Efficiency ratio (GAAP-derived) (O/M)50.88 % 52.71 % 53.86 % 51.78 % 53.53 %
Efficiency ratio - adjusted (P/N)50.78 % 52.56 % 53.23 % 51.65 % 53.07 %
         
End of Period    
June 30, March 31, June 30,    
2024 2024 2023    
Calculation of Tangible Common Equity-to-Tangible Assets Ratio        
(Q)Total common shareholders' equity (GAAP)$1,043,5151,009,886921,020    
(R)Less: goodwill and intangible assets(83,907) (83,912) (83,897)    
(S)Total tangible common shareholders' equity (Q-R)$959,608925,974837,123    
(T)Total assets (GAAP)8,878,003 8,667,837 8,414,818    
(R)Less: goodwill and intangible assets(83,907) (83,912) (83,897)    
(U)Total tangible assets (T-R)$8,794,096 $8,583,9258,330,921    
Common equity-to-assets ratio (GAAP-derived) (Q/T)11.75 % 11.65 % 10.95 %    
Tangible common equity-to-tangible assets ratio (S/U)10.91 % 10.79 % 10.05 %    
         
         
Calculation of Tangible Book Value per Common Share         
(Q)Total common shareholders' equity (GAAP)$$1,043,5151,009,886921,020    
(V)Actual common shares outstanding24,507,023 24,477,658 24,682,561    
Book value per common share (GAAP-derived) (Q/V)*1000$$42.58 $41.26 $37.31    
Tangible common book value per share (S/V)*1000$$39.16 $37.83 $33.92    

 

The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP #336901 10 3)
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Contact:
Brett Bauer
574-235-2000

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