SOUTH BEND, Indiana - 1st Source Corporation (NASDAQ: SRCE), the parent company of 1st Source Bank, has reported a net income of $34.94 million for the third quarter of 2024, marking a 6.07% increase from the same quarter in the previous year. The diluted net income per common share also rose by 6.82% to $1.41, compared to $1.32 in the third quarter of 2023.
The Board of Directors approved a quarterly cash dividend of $0.36 cents per common share, which is a 12.50% increase from the previous year. This dividend is payable to shareholders of record on November 5, 2024, with a payment date of November 15, 2024.
Tax-equivalent net interest income for the third quarter reached $75.63 million, up 1.94% from the second quarter of 2024 and an 8.97% increase from the third quarter of 2023. The net interest margin was reported at 3.64%, a slight improvement from the previous quarter.
However, the company faced some credit challenges, with net charge-offs of $0.85 million or 0.05% of average loans and leases during the quarter, compared to net recoveries of $1.99 million in the previous quarter. The majority of these charge-offs were attributed to a single business account.
Christopher J. Murphy III, Chairman and Chief Executive Officer of 1st Source, expressed satisfaction with the company's revenue increase and net interest margin expansion. He also highlighted the accolades received by 1st Source Bank, including recognition on Forbes' America's Best-in-State Employers list and inclusion in Monitor's Best Companies in Equipment Finance in the Leadership category.
The average loans and leases for the quarter remained flat compared to the previous quarter but increased by 5.76% from the third quarter a year ago. Average deposits decreased slightly by 0.69% from the previous quarter but were up 2.65% compared to the same quarter in the previous year.
The company's capital position remained strong, with a common equity-to-assets ratio of 12.60% as of September 30, 2024. The tangible common equity-to-tangible assets ratio was 11.76%, and the Common Equity Tier 1 ratio stood at 14.18%.
This financial report is based on a press release statement from 1st Source Corporation.
In other recent news, 1st Source Corporation experienced significant growth in the second quarter of 2024. The company reported a 13.44% rise in net income from the same period last year, marking a 24.91% growth from the first quarter of 2024. Alongside this, average loans and leases, as well as deposits, saw substantial increases contributing to a year-over-year increase of 7.57% and 3.52%, respectively.
Piper Sandler, an investment firm, recently downgraded the 1st Source stock from Overweight to Neutral, despite increasing the price target to $67.50. This adjustment was due to the stock's valuation following a close at an all-time high. However, the firm maintains a positive outlook on 1st Source, citing its superior profitability and conservative credit profile.
Furthermore, 1st Source's net interest income reached $74.19 million, indicating an 8.00% increase compared to the same quarter of the previous year. The company's robust capital position, with a common equity-to-assets ratio of 11.75%, has been recognized by Forbes as one of America's Best Banks. These are among the recent developments for 1st Source Corporation.
InvestingPro Insights
1st Source Corporation's (NASDAQ: SRCE) recent financial performance aligns with several key metrics and insights from InvestingPro. The company's reported 6.07% increase in net income and 6.82% rise in diluted earnings per share reflect its continued profitability, which is supported by an InvestingPro Tip indicating that SRCE has been profitable over the last twelve months.
The 12.50% increase in quarterly cash dividend to $0.36 per share is particularly noteworthy. This aligns with two significant InvestingPro Tips: SRCE has raised its dividend for 31 consecutive years and has maintained dividend payments for 50 consecutive years. These facts underscore the company's commitment to shareholder returns and its financial stability. As of the latest data, SRCE offers a dividend yield of 2.41%, which may be attractive to income-focused investors.
From a valuation perspective, SRCE's P/E ratio stands at 11.52, which is relatively low compared to many in the financial sector. However, an InvestingPro Tip cautions that the company is trading at a high P/E ratio relative to near-term earnings growth, with a PEG ratio of 13.1 for the last twelve months as of Q2 2024. This suggests that investors should carefully consider the company's growth prospects in relation to its current valuation.
The company's revenue for the last twelve months as of Q2 2024 was $367.02 million, with a revenue growth of 2.45% over the same period. This modest growth is reflected in the quarterly performance reported in the article, where tax-equivalent net interest income increased by 8.97% year-over-year.
It's worth noting that SRCE has shown strong price performance, with a 39.55% total return over the past year. The stock is currently trading at 90.74% of its 52-week high, indicating investor confidence in the company's prospects.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and metrics beyond those mentioned here. In fact, there are 11 more InvestingPro Tips available for SRCE, providing a deeper understanding of the company's financial health and market position.
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