1st Source (SRCE) Q2 2024 earnings summary

Executive summary

• Net income available to common shareholders was $36.79 million for Q2 2024, up 13.44% year-over-year and 24.91% sequentially; first half net income was $66.25 million.

• Diluted EPS was $1.49 for Q2, up 14.62% year-over-year and 25.21% sequentially; first half EPS was $2.68.

• Total assets reached $8.88 billion at June 30, 2024, up 1.72% from year-end, driven by loan and lease growth and higher interest-bearing deposits.

• Board approved a 12.5% increase in quarterly cash dividend to $0.36 per share.

• Recognized by Forbes and US News & World Report for banking excellence and workplace quality.

Financial highlights

• Net interest income for Q2 2024 was $74.05 million, up 8% year-over-year; net interest margin (FTE) rose to 3.59%.

• Noninterest income for Q2 was $23.22 million, up modestly year-over-year, with growth in trust, wealth advisory, and mortgage banking.

• Noninterest expense for Q2 was $49.49 million, up slightly year-over-year and flat sequentially.

• Net recoveries of $1.99 million in Q2, reversing net charge-offs of $6.12 million in Q1 2024.

• Provision for credit losses was $0.06 million for Q2 and $6.65 million for the first half.

Outlook and guidance

• Management remains cautious due to fragile domestic growth, elevated inflation, high rates, and geopolitical uncertainty.

• Forecast assumes tepid economic growth with inflation moving toward the Fed's 2% target, potentially impacting loan and lease portfolios.

• Focus on disciplined loan and deposit pricing, with strong liquidity and capital positions.