1st Source (SRCE) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $37.52 million, up 27.4% year-over-year and 19.35% sequentially, with EPS of $1.52, up 27.73% from Q1 2024.

• Return on average common equity was 13.33% and return on average assets was 1.72%, both up from prior year.

• Board approved a $0.38 per share cash dividend, up 11.76% year-over-year.

• Recognized for strong performance and workplace culture with multiple awards.

• Total assets reached $8.96 billion, a 0.35% increase from December 31, 2024.

Financial highlights

• Net interest income rose 12.5% year-over-year to $81.09 million, with margin expanding to 3.90% from 3.54%.

• Total loans and leases grew to $6.86 billion, up 0.13% sequentially and 4.53% year-over-year.

• Total deposits increased 2.60% to $7.42 billion, with growth in time, savings, and interest-bearing demand balances.

• Noninterest income rose 4.3% year-over-year to $23.10 million, despite declines in mortgage banking and equipment rental.

• Noninterest expense increased 9.0% year-over-year to $53.08 million, mainly from higher salaries, occupancy, and data processing costs.

Outlook and guidance

• Management expects continued economic uncertainty, with downside risks from trade policy, inflation, and regulatory changes.

• Loan growth is anticipated to be modest, with a cautious credit outlook and focus on asset quality.

• Dividend policy remains unchanged; payout ratio for trailing four quarters was 24.96%.

• Liquidity remains strong, with $3.44 billion in net available liquidity, about 50% of total deposits net of brokered and listing services CDs.