QUARTERLY HIGHLIGHTS

  • Net income was $34.94 million for the quarter, up $2.00 million or 6.07% from the third quarter of 2023. Diluted net income per common share was $1.41, up $0.09 or 6.82% from the prior year’s third quarter of $1.32.

  • Cash dividend of $0.36 cents per common share for the quarter was approved, up 12.50% from the cash dividend declared a year ago.
  • Tax-equivalent net interest income was $75.63 million, up $1.44 million or 1.94% from the second quarter of 2024 and up $6.22 million, or 8.97% from the third quarter a year ago. Tax-equivalent net interest margin was 3.64%, up five basis points from the previous quarter and up 18 basis points from the third quarter a year ago.
  • Net charge-offs of $0.85 million or 0.05% of average loans and leases occurred during the quarter compared to net recoveries of $1.99 million or 0.12% of average loans and leases during the previous quarter.

South Bend, Indiana–(Newsfile Corp. – October 24, 2024) – 1st Source Corporation (NASDAQ:SRCE), parent company of 1st Source Bank, today reported quarterly net income of $34.94 million for the third quarter of 2024, compared to $36.79 million the previous quarter and up 6.07% from the $32.94 million reported in the third quarter a year ago. Year-to-date 2024 net income was $101.19 million, up 4.86% compared to $96.50 million during the first nine months of 2023. Diluted net income per common share for the third quarter of 2024 was $1.41, down 5.37% compared to $1.49 in the previous quarter and up 6.82%, versus $1.32 in the third quarter of 2023. Diluted net income per common share for the first nine months of 2024 was $4.09, up 5.68% compared to $3.87 a year earlier.

At its October 2024 meeting, the Board of Directors approved a cash dividend of $0.36 cents per common share, up 12.50% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on November 5, 2024, and will be paid on November 15, 2024.

Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, “We are pleased with our increase in revenue and net interest margin expansion compared to the previous quarter. Disciplined loan and lease pricing lead to a five basis point improvement from the prior quarter. This marks the fourth consecutive quarter of margin expansion despite persistent deposit rate competition as the Federal Reserve raised rates or held them steady over that period. They have recently begun to lower rates.

“While still very good, credit was challenged in the quarter with elevated net charge-offs, the majority of which were from one business account. Nonperforming assets to loans and leases at September 30, 2024, was 0.47%, up from 0.31% at June 30, 2024, and the allowance for loan and lease losses as a percentage of total loans and leases remained strong at 2.30% up from 2.26% the previous quarter.

“We were very pleased to learn during the third quarter that 1st Source Bank won several accolades. We made Forbes‘ America’s Best-in-State Employers list, which was created by surveying more than 160,000 employees working for companies that had at least 500 employees in the United States. Also, 1st Source Bank’s Specialty Finance Group was included in Monitor‘s Best Companies in Equipment Finance in the Leadership category. Great leadership was defined for this award to include attributes such as accessibility, transparency, communication, and collaboration – an apt description of our Bank leadership team.

“Another welcome honor was when two of our board members along with myself, were named to the Indiana 250 list by IBJ Media. Isaac Torres and Tracy Graham were both included in the list which identifies the state’s most influential community and business leaders. We are thrilled to have both Isaac and Tracy’s experience and leadership on our Board of Directors. Finally, we once again made the Piper Sandler Sm-All Stars list in the Class of 2024. This list identifies the top performing small-cap banks and thrifts in the U.S. These honors speak directly to our values and mission in the ways that we deliver both for our clients and colleagues – helping them achieve security, build wealth, and realize their dreams.” Mr. Murphy concluded.

THIRD QUARTER 2024 FINANCIAL RESULTS

Loans

Third quarter average loans and leases were $6.61 billion, which was flat compared to the previous quarter, and increased $359.79 million, up 5.76% from the third quarter a year ago. Year-to-date average loans and leases increased $430.26 million to $6.57 billion, up 7.01% from the first nine months of 2023.

Deposits

Third quarter average deposits were $7.13 billion, which was down $49.25 million, or 0.69%, from the previous quarter, and up $184.32 million or 2.65% compared to the quarter ended September 30, 2023. Average deposits for the first nine months of 2024 were $7.11 billion, an increase of $190.13 million, up 2.75% from the same period a year ago. Average deposit balances declined from the previous quarter primarily due to expected seasonal public fund outflows and lower brokered deposit balances. Average deposit balance growth from the third quarter of 2023 was primarily in savings, time, and brokered deposits.

Net Interest Income and Net Interest Margin

Third quarter 2024 tax-equivalent net interest income increased $1.44 million to $75.63 million, up 1.94% from the previous quarter and increased $6.22 million, up 8.97% from the third quarter a year ago. For the first nine months of 2024, tax equivalent net interest income increased $14.00 million to $221.89 million, up 6.73% from the first nine months of 2023.

Third quarter 2024 net interest margin was 3.63%, an increase of four basis points from the 3.59% in the previous quarter and an increase of 18 basis points from the same period in 2023. On a fully tax-equivalent basis, third quarter 2024 net interest margin was 3.64%, up five basis points compared to the 3.59% in the previous quarter, and an increase of 18 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 balances and less reliance on higher costing short-term borrowings.

Net interest margin for the first nine months of 2024 was 3.58%, an increase of eight basis points compared to the first nine months of 2023. Net interest margin on a fully-tax equivalent basis for the first nine months of 2024 was 3.59%, an increase of eight basis points compared to the first nine months of the prior year.

Noninterest Income

Third quarter 2024 noninterest income of $22.45 million was down $0.77 million, or 3.33% from the previous quarter, and decreased $2.01 million, down 8.21% compared to the third quarter a year ago. For the first nine months of 2024, noninterest income was $67.83 million, a decrease of $2.72 million, down 3.86% from the same period a year ago.

The decrease in noninterest income compared to the previous quarter was mainly due to lower trust and wealth advisory income from seasonal tax preparation fees during the second quarter, a decline in mortgage banking income from lower sales volumes, a decrease in partnership investment gains, lower interest rate swaps fees, and a reduction in equipment rental income as demand for leases declined. These decreases were offset by increased bank owned life insurance policy claims recognized.

The decrease in noninterest income compared to the third quarter and first nine months of 2023 was primarily due to fewer gains on the sale of renewable energy tax equity investments, reduced equipment rental income as demand for leases declined, lower contingent insurance commissions received, a decline in bank owned life insurance policy claims recognized, and less interest rate swap fees. These declines were offset by higher trust and wealth advisory income due to improvements in overall market performance and increased mortgage banking income from higher sales volumes and margins.

Noninterest Expense

Third quarter 2024 noninterest expense of $49.44 million was flat compared to the prior quarter and decreased $0.72 million or 1.44% from the third quarter a year ago. For the first nine months of 2024, noninterest expense was $148.52 million, down slightly from the same period a year ago.

Total noninterest income was flat compared to the previous quarter. Increases were the result of higher employee benefit costs from increased group insurance claims and higher incentive compensation. These increases were offset by a decrease in the provision for unfunded loan commitments due to higher loan fundings and higher gains on the sale of fixed assets.

The decrease in noninterest expense compared to the third quarter and first nine months of 2023, was the result of a decrease in the loan loss provision for unfunded commitments due to higher loan fundings, lower leased equipment depreciation, reduced group insurance claims, and higher gains on the sale of fixed assets. These decreases were offset by 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, increased data processing costs from technology projects, and an increase in professional fees as a result of a $1.08 million reversal of accrued legal fees during the first quarter of 2023.

Credit

The allowance for loan and lease losses increased to $152.32 million as of September 30, 2024, or 2.30% of total loans and leases. This percentage compared to 2.26% at June 30, 2024, and 2.27% at September 30, 2023. Net charge-offs of $0.85 million were recorded for the third quarter of 2024, compared with net recoveries of $1.99 million in the prior quarter and net charge-offs of $0.33 million in the same quarter a year ago. The majority of the third quarter’s charge-offs related to one account in the commercial and agricultural portfolio.

The provision for credit losses was $3.11 million for the third quarter of 2024, an increase of $3.05 million from the previous quarter and an increase of $2.25 million compared with the same period in 2023. Net charge-offs and higher special attention outstandings compared to net recoveries in the previous quarter were the primary reasons for the increase in the provision for credit losses during the quarter, along with a change in quantitative assumptions during the quarter regarding the treatment of renewals for loans in special attention. The ratio of nonperforming assets to loans and leases was 0.47% as of September 30, 2024, compared to 0.31% on June 30, 2024, and 0.27% on September 30, 2023.

Capital

As of September 30, 2024, the common equity-to-assets ratio was 12.60%, compared to 11.75% at June 30, 2024, and 10.84% a year ago. The tangible common equity-to-tangible assets ratio was 11.76% at September 30, 2024, compared to 10.91% at June 30, 2024, and 9.96% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 14.18% at September 30, 2024, compared to 13.74% at June 30, 2024, and 13.31% 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 third 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 77 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
3rd QUARTER 2024 FINANCIAL HIGHLIGHTS
(Unaudited – Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2024 2024 2023 2024 2023
AVERAGE BALANCES          
Assets $ 8,719,824 $ 8,761,006 $ 8,417,391 $ 8,711,023 $ 8,368,054
Earning assets 8,273,301 8,303,518 7,963,537 8,253,068 7,917,763
Investments 1,539,219 1,554,362 1,645,906 1,567,123 1,703,626
Loans and leases 6,605,677 6,606,209 6,245,883 6,572,108 6,141,849
Deposits 7,134,426 7,183,678 6,950,105 7,109,827 6,919,695
Interest bearing liabilities 5,806,983 5,922,916 5,566,874 5,837,681 5,470,305
Common shareholders’ equity 1,079,543 1,027,138 940,544 1,037,809 919,182
Total equity 1,150,795 1,098,740 999,552 1,111,540 987,461
INCOME STATEMENT DATA          
Net interest income $ 75,486 $ 74,050 $ 69,236 $ 221,451 $ 207,317
Net interest income – FTE(1) 75,630 74,194 69,406 221,887 207,892
Provision for credit losses 3,108 56 859 9,759 3,955
Noninterest income 22,448 23,221 24,455 67,825 70,547
Noninterest expense 49,443 49,491 50,166 148,520 148,752
Net income 34,914 36,805 32,939 101,181 96,517
Net income available to common shareholders 34,937 36,793 32,939 101,185 96,498
PER SHARE DATA          
Basic net income per common share $ 1.41 $ 1.49 $ 1.32 $ 4.09 $ 3.87
Diluted net income per common share 1.41 1.49 1.32 4.09 3.87
Common cash dividends declared 0.36 0.34 0.32 1.04 0.96
Book value per common share(2) 45.05 42.58 37.83 45.05 37.83
Tangible book value per common share(1) 41.62 39.16 34.40 41.62 34.40
Market value – High 65.63 53.74 49.36 65.63 53.85
Market value – Low 51.80 47.30 40.96 47.30 38.77
Basic weighted average common shares outstanding 24,514,144 24,495,495 24,660,508 24,489,665 24,677,914
Diluted weighted average common shares outstanding 24,514,144 24,495,495 24,660,508 24,489,665 24,677,914
KEY RATIOS          
Return on average assets 1.59 % 1.69 % 1.55 % 1.55 % 1.54 %
Return on average common shareholders’ equity 12.87 14.41 13.89 13.02 14.04
Average common shareholders’ equity to average assets 12.38 11.72 11.17 11.91 10.98
End of period tangible common equity to tangible assets(1) 11.76 10.91 9.96 11.76 9.96
Risk-based capital – Common Equity Tier 1(3) 14.18 13.74 13.31 14.18 13.31
Risk-based capital – Tier 1(3) 15.84 15.38 14.86 15.84 14.86
Risk-based capital – Total(3) 17.10 16.64 16.12 17.10 16.12
Net interest margin 3.63 3.59 3.45 3.58 3.50
Net interest margin – FTE(1) 3.64 3.59 3.46 3.59 3.51
Efficiency ratio: expense to revenue 50.49 50.88 53.54 51.34 53.53
Efficiency ratio: expense to revenue – adjusted(1) 50.32 50.78 54.24 51.20 53.46
Net charge-offs (recoveries) to average loans and leases 0.05 (0.12) 0.02 0.10 (0.02)
Loan and lease loss allowance to loans and leases 2.30 2.26 2.27 2.30 2.27
Nonperforming assets to loans and leases 0.47 0.31 0.27 0.47 0.27
         
September 30, June 30, March 31, December 31, September 30,
2024 2024 2024 2023 2023
END OF PERIOD BALANCES          
Assets $ 8,763,946 $ 8,878,003 $ 8,667,837 $ 8,727,958 $ 8,525,058
Loans and leases 6,616,100 6,652,999 6,562,772 6,518,505 6,353,648
Deposits 7,125,944 7,195,924 7,055,311 7,038,581 6,967,492
Allowance for loan and lease losses 152,324 150,067 148,024 147,552 144,074
Goodwill and intangible assets 83,902 83,907 83,912 83,916 83,921
Common shareholders’ equity 1,104,253 1,043,515 1,009,886 989,568 924,250
Total equity 1,175,205 1,114,855 1,081,549 1,068,263 982,997
ASSET QUALITY          
Loans and leases past due 90 days or more $ 100 $ 185 $ 26 $ 149 $ 154
Nonaccrual loans and leases 30,678 20,297 22,097 23,381 16,617
Other real estate — — — — 117
Repossessions 109 352 308 705 233
Total nonperforming assets $ 30,887 $ 20,834 $ 22,431 $ 24,235 $ 17,121

 

(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)        
  September 30, June 30, December 31, September 30,
  2024 2024 2023 2023
ASSETS        
Cash and due from banks $ 99,900 $ 89,592 $ 77,474 $ 75,729
Federal funds sold and interest bearing deposits with other banks 69,461 179,651 52,194 35,406
Investment securities available-for-sale, at fair value 1,563,461 1,523,548 1,622,600 1,605,242
Other investments 23,855 24,585 25,075 25,075
Mortgages held for sale 3,690 2,763 1,442 3,118
Loans and leases, net of unearned discount:        
Commercial and agricultural 723,176 721,235 766,223 763,051
Renewable energy 479,947 459,441 399,708 364,949
Auto and light truck 949,473 1,009,967 966,912 901,484
Medium and heavy duty truck 299,208 315,157 311,947 323,202
Aircraft 1,065,801 1,058,591 1,078,172 1,079,581
Construction equipment 1,141,367 1,132,556 1,084,752 1,062,097
Commercial real estate 1,156,823 1,164,598 1,129,861 1,088,199
Residential real estate and home equity 664,581 654,357 637,973 627,515
Consumer 135,724 137,097 142,957 143,570
Total loans and leases 6,616,100 6,652,999 6,518,505 6,353,648
Allowance for loan and lease losses (152,324) (150,067) (147,552) (144,074)
Net loans and leases 6,463,776 6,502,932 6,370,953 6,209,574
Equipment owned under operating leases, net 13,011 13,886 20,366 24,096
Premises and equipment, net 48,185 48,201 46,159 43,951
Goodwill and intangible assets 83,902 83,907 83,916 83,921
Accrued income and other assets 394,705 405,938 427,779 418,946
Total assets $ 8,763,946 $ 8,875,003 $ 8,727,958 $ 8,525,058
LIABILITIES        
Deposits:        
Noninterest-bearing demand $ 1,635,981 $ 1,578,762 $ 1,655,728 $ 1,680,725
Interest-bearing deposits:        
Interest-bearing demand 2,404,805 2,543,724 2,430,833 2,416,864
Savings 1,242,551 1,255,154 1,213,334 1,180,837
Time 1,842,607 1,818,284 1,738,686 1,689,066
Total interest-bearing deposits 5,489,963 5,617,162 5,382,853 5,286,767
Total deposits 7,125,944 7,195,924 7,038,581 6,967,492
Short-term borrowings:        
Federal funds purchased and securities sold under agreements to repurchase 63,553 70,767 55,809 48,335
Other short-term borrowings 102,124 217,450 256,550 223,757
Total short-term borrowings 165,677 288,217 312,359 272,092
Long-term debt and mandatorily redeemable securities 39,220 39,136 47,911 46,533
Subordinated notes 58,764 58,764 58,764 58,764
Accrued expenses and other liabilities 199,136 181,107 202,080 197,180
Total liabilities 7,588,741 7,763,148 7,659,695 7,542,061
SHAREHOLDERS’ EQUITY        
Preferred stock; no par value
 Authorized 10,000,000 shares; none issued or outstanding     —       —      —      — 
Common stock; no par value
Authorized 40,000,000 shares; issued 28,205,674 shares at September 30, 2024,
June 30, 2024, December 31, 2023, and September 30, 2023, respectively		     436,538       436,538     436,538     436,538
Retained earnings 868,075 841,790 789,842 769,603
Cost of common stock in treasury (3,691,291, 3,698,651, 3,771,070, and 3,776,591
shares at September 30, 2024, June 30, 2024, December 31, 2023,
and September 30, 2023, respectively)		     (129,134)       (129,248)     (130,489)     (130,579)
Accumulated other comprehensive loss (71,226) (105,565) (106,323) (151,312)
Total shareholders’ equity 1,104,253 1,043,515 989,568 924,250
Noncontrolling interests 70,952 71,340 78,695 58,747
Total equity 1,175,205 1,114,855 1,068,263 982,997
Total liabilities and equity $ 8,763,946 $ 8,878,003 $ 8,727,958 $ 8,525,058

 

1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited – Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
2024 2024 2023 2024 2023
Interest income:    
Loans and leases $ 115,200 $ 113,101 $ 100,206 $ 337,503 $ 280,195
Investment securities, taxable 6,120 5,900 5,918 18,099 18,512
Investment securities, tax-exempt 251 254 319 765 1,131
Other 1,659 1,914 883 4,500 2,498
Total interest income 123,230 121,169 107,326 360,867 302,336
Interest expense:          
Deposits 43,782 43,095 34,405 126,621 84,538
Short-term borrowings 1,509 2,158 2,136 6,769 5,154
Subordinated notes 1,054 1,061 1,060 3,176 3,108
Long-term debt and mandatorily redeemable securities 1,399 805 489 2,850 2,219
Total interest expense 47,744 47,119 38,090 139,416 95,019
Net interest income 75,486 74,050 69,236 221,451 207,317
Provision for credit losses 3,108 56 859 9,759 3,955
Net interest income after provision for credit losses 72,378 73,994 68,377 211,692 203,362
Noninterest income:          
Trust and wealth advisory 6,524 7,081 5,648 19,892 17,794
Service charges on deposit accounts 3,279 3,203 3,297 9,552 9,418
Debit card 4,598 4,562 4,377 13,361 13,585
Mortgage banking 1,042 1,280 971 3,272 2,699
Insurance commissions 1,641 1,611 1,714 5,028 5,384
Equipment rental 1,141 1,257 2,101 4,069 6,930
Losses on investment securities available-for-sale — — — — (44)
Other 4,223 4,227 6,347 12,651 14,781
Total noninterest income 22,448 23,221 24,455 67,825 70,547
Noninterest expense:          
Salaries and employee benefits 31,274 29,238 28,866 90,084 85,699
Net occupancy 3,011 2,908 2,867 8,915 8,165
Furniture and equipment 1,496 1,265 1,217 3,910 3,938
Data processing 7,002 6,712 6,289 20,214 18,714
Depreciation – leased equipment 907 999 1,672 3,194 5,570
Professional fees 1,928 1,713 1,763 4,986 4,149
FDIC and other insurance 1,423 1,627 1,598 4,707 4,302
Business development and marketing 1,671 2,026 1,201 5,441 4,822
Other 731 3,003 4,693 7,069 13,393
Total noninterest expense 49,443 49,491 50,166 148,520 148,752
Income before income taxes 45,383 47,724 42,666 130,997 125,157
Income tax expense 10,469 10,919 9,727 29,816 28,640
Net income 34,914 36,805 32,939 101,181 96,517
Net loss (income) attributable to noncontrolling interests 23 (12) — 4 (19)
Net income available to common shareholders $ 34,937 $ 36,793 $ 32,939 $ 101,185 $ 96,498
Per common share:          
Basic net income per common share $ 1.41 $ 1.49 $ 1.32 $ 4.09 $ 3.87
Diluted net income per common share $ 1.41 $ 1.49 $ 1.32 $ 4.09 $ 3.87
Basic weighted average common shares outstanding 24,514,144 24,495,495 24,660,508 24,489,665 24,677,914
Diluted weighted average common shares outstanding 24,514,144 24,495,495 24,660,508 24,489,665 24,677,914

 

1st SOURCE CORPORATION              
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY      
INTEREST RATES AND INTEREST DIFFERENTIAL                
(Unaudited – Dollars in thousands)                        
  Three Months Ended
  September 30, 2024     June 30, 2024     September 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 $  1,510,162   $ 6,120 1.61 %   $   1,524,751 $ 5,900 1.56 % $   1,605,912   $ 5,918 1.46 %
Tax exempt(1)   29,057   316 4.33 %     29,611 319 4.33 %     39,994   397 3.94 %
Mortgages held for sale   3,758   63 6.67 %     4,179 65 6.26 %     3,169   54 6.76 %
Loans and leases, net of unearned discount(1)   6,605,677   115,216 6.94 %     6,606,209 113,115 6.89 %     6,245,883   100,244 6.37 %
Other investments   124,647   1,659 5.29 %     138,768 1,914 5.55 %     68,579   883 5.11 %
Total earning assets(1)   8,273,301   123,374 5.93 %     8,303,518 121,313 5.88 %     7,963,537   107,496 5.36 %
Cash and due from banks   64,014       60,908         68,640      
Allowance for loan and lease losses   (151,693)       (149,688)         (145,197)      
Other assets   534,202       546,268         530,411      
Total assets  $  8,719,824     $   8,761,006       $   8,417,391      
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY                        
Interest-bearing deposits  $  5,534,358   $ 43,782 3.15 %   $   5,603,880 $ 43,095 3.09 %   $   5,247,332   $ 34,405 2.60 %
Short-term borrowings:                          
Securities sold under agreements to repurchase   64,032   173 1.07 %     61,729 146 0.95 %     60,736   35 0.23 %
Other short-term borrowings   110,710   1,336 4.80 %     159,953 2,012 5.06 %     153,523   2,101 5.43 %
Subordinated notes   58,764   1,054 7.14 %     58,764 1,061 7.26 %     58,764   1,060 7.16 %
Long-term debt and mandatorily redeemable
securities		   39,119   1,399 14.23 %     38,590 805 8.39 %     46,519   489 4.17 %
Total interest-bearing liabilities   5,806,983   47,744 3.27 %     5,922,916 47,119 3.20 %     5,566,874   38,090 2.71 %
Noninterest-bearing deposits   1,600,068       1,579,798         1,702,773      
Other liabilities   161,978       159,552         148,192      
Shareholders’ equity   1,079,543       1,027,138         940,544      
Noncontrolling interests   71,252       71,602         59,008      
Total liabilities and equity  $  8,719,824     $   8,761,006       $   8,417,391      
Less: Fully tax-equivalent adjustments     (144)       (144)           (170)  
Net interest income/margin (GAAP-derived)(1)     $ 75,486 3.63 %       $ 74,050 3.59 %         $ 69,236 3.45 %
Fully tax-equivalent adjustments     144       144           170  
Net interest income/margin – FTE(1)     $ 75,630 3.64 %       $ 74,194 3.59 %         $ 69,406 3.46 %
(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)                            
    Nine Months Ended
    September 30, 2024   September 30, 2023
    Average
Balance		     Interest
Income
/Expense		     Yield/
Rate		   Average
Balance		   Interest Income/
Expense		       Yield/
Rate
ASSETS                            
Investment securities available-for-sale:                            
Taxable  $   1,537,066   $   18,099     1.57 % $   1,657,241 $   18,512       1.49 %
Tax exempt(1)     30,057     962     4.28 %   46,385   1,413       4.07 %
Mortgages held for sale     3,257     162     6.64 %   2,489   114       6.12 %
Loans and leases, net of unearned discount(1)     6,572,108     337,580     6.86 %   6,141,849   280,374       6.10 %
Other investments     110,580     4,500     5.44 %   69,799   2,498       4.78 %
Total earning assets(1)     8,253,068     361,303     5.85 %   7,917,763   302,911       5.11 %
Cash and due from banks     62,277           70,288            
Allowance for loan and lease losses     (150,127)           (143,545)            
Other assets     545,805           523,548            
Total assets $    8,711,023         $   8,368,054            
                             
LIABILITIES AND SHAREHOLDERS’ EQUITY                        
Interest-bearing deposits     5,511,116     126,621     3.07 %   5,143,493   84,538       2.20 %
Short-term borrowings:                            
Securities sold under agreements to repurchase     57,934     366     0.84 %   87,909   107       0.16 %
Other short-term borrowings     168,234     6,403     5.08 %   133,965   5,047       5.04 %
Subordinated notes     58,764     3,176     7.22 %   58,764   3,108       7.07 %
Long-term debt and mandatorily redeemable securities     41,633     2,850     9.14 %   46,174   2,219       6.43 %
Total interest-bearing liabilities     5,837,681     139,416     3.19 %   5,470,305   95,019       2.32 %
Noninterest-bearing deposits     1,598,711           1,776,202            
Other liabilities     163,091           143,086            
Shareholders’ equity     1,037,809           919,182            
Noncontrolling interests     73,731           59,279            
Total liabilities and equity  $    8,711,023         $   8,368,054            
Less: Fully tax-equivalent adjustments         (436)           (575)        
Net interest income/margin (GAAP-derived)(1)       $    221,451     3.58 %     $   207,317       3.50 %
Fully tax-equivalent adjustments         436           575        
Net interest income/margin – FTE(1)       $    221,887     3.59 %     $   207,892       3.51 %
(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   Nine Months Ended
  September 30,     June 30,   September 30,   September 30,   September 30,
  2024     2024   2023   2024   2023
Calculation of Net Interest Margin            
(A) Interest income (GAAP)  $ 123,230   $   121,169   $ 107,326   $ 360,867   $ 302,336
Fully tax-equivalent adjustments:                    
(B) – Loans and leases   79     79   92   239   293
(C) – Tax exempt investment securities   65     65   78   197   282
(D) Interest income – FTE (A+B+C)   123,374     121,313   107,496   361,303   302,911
(E) Interest expense (GAAP)   47,744     47,119   38,090   139,416   95,019
(F) Net interest income (GAAP) (A-E)   75,486     74,050   69,236   221,451   207,317
(G) Net interest income – FTE (D-E)   75,630     74,194   69,406   221,887   207,892
(H) Annualization factor   3.978     4.022   3.967   1.336   1.337
(I) Total earning assets  $ 8,273,301   $   8,303,518   $ 7,963,537   $ 8,253,068   $ 7,917,763
Net interest margin (GAAP-derived) (F*H)/I   3.63 %     3.59 %   3.45 %   3.58 %   3.50 %
Net interest margin – FTE (G*H)/I   3.64 %     3.59 %   3.46 %   3.59 %   3.51 %
                   
Calculation of Efficiency Ratio                    
(F) Net interest income (GAAP)  $ 75,486   $   74,050   $ 69,236   $ 221,451   $ 207,317
(G) Net interest income – FTE   75,630     74,194   69,406   221,887   207,892
(J) Plus: noninterest income (GAAP)   22,448     23,221   24,455   67,825   70,547
(K) Less: gains/losses on investment securities and partnership
 investments		   (712)     (929)   (2,779)   (2,678)   (5,049)
(L) Less: depreciation – leased equipment   (907)     (999)   (1,672)   (3,194)   (5,570)
(M) Total net revenue (GAAP) (F+J)   97,934     97,271   93,691   289,276   277,864
(N) Total net revenue – adjusted (G+J-K-L)   96,459     95,487   89,410   283,840   267,820
(O) Noninterest expense (GAAP)   49,443     49,491   50,166   148,520   148,752
(L) Less: depreciation – leased equipment   (907)     (999)   (1,672)   (3,194)   (5,570)
(P) Noninterest expense – adjusted (O-L)   48,536     48,492   48,494   145,326   143,182
Efficiency ratio (GAAP-derived) (O/M)   50.49 %     50.88 %   53.54 %   51.34 %   53.53 %
Efficiency ratio – adjusted (P/N)   50.32 %     50.78 %   54.24 %   51.20 %   53.46 %
                   
  End of Period        
  September 30,     June 30,   September 30,        
  2024     2024   2023        
Calculation of Tangible Common Equity-to-Tangible Assets Ratio                  
(Q) Total common shareholders’ equity (GAAP) $ 1,104,253   $   1,043,515   $ 924,250        
(R) Less: goodwill and intangible assets   (83,902)     (83,907)   (83,921)        
(S) Total tangible common shareholders’ equity (Q-R)  $ 1,020,351   $   959,608   $ 840,329        
(T) Total assets (GAAP)   8,763,946     8,878,003   8,525,058        
(R) Less: goodwill and intangible assets   (83,902)     (83,907)   (83,921)        
(U) Total tangible assets (T-R)  $ 8,680,044   $   8,794,096   $ 8,441,137        
Common equity-to-assets ratio (GAAP-derived) (Q/T)   12.60 %     11.75 %   10.84 %        
Tangible common equity-to-tangible assets ratio (S/U)   11.76 %     10.91 %   9.96 %        
                   
                   
Calculation of Tangible Book Value per Common Share                    
(Q) Total common shareholders’ equity (GAAP)  $  1,104,253   $   1,043,515   $ 924,250        
(V) Actual common shares outstanding   24,514,383     24,507,023   24,429,083        
Book value per common share (GAAP-derived) (Q/V)*1000  $  45.05   $   42.58   $ 37.83        
Tangible common book value per share (S/V)*1000  $ 41.62   $   39.16   $ 34.40        

 

The NASDAQ Stock Market National Market Symbol: “SRCE” (CUSIP #336901 10 3)
Please contact us at shareholder@1stsource.com

Contact:
Brett Bauer
574-235-2000

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/227682

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