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Investor Relations · Jul 24th, 2025
QUARTERLY HIGHLIGHTS
- Net income was $37.32 million for the quarter, down slightly from the previous quarter and up $0.53 million or 1.43% from the second quarter of 2024. Diluted net income per common share was $1.51, down $0.01 or 0.66% from the previous quarter and up $0.02 or 1.34% from the prior year’s second quarter of $1.49. These results include $1.00 million in pre-tax losses from the sale of approximately $26 million available-for-sale securities executed in the second quarter.
- Return on average assets decreased to 1.67% from 1.72% in the previous quarter and 1.69% in the second quarter of 2024. Return on average common shareholders’ equity decreased to 12.61% from 13.33% in the previous quarter and 14.41% in the second quarter of 2024.
- Cash dividend of $0.38 per common share for the quarter was approved, up 5.56% from the cash dividend declared a year ago.
- Average loans and leases grew $169.51 million in the second quarter, up 2.49% from the previous quarter and increased $362.25 million, up 5.48% from the second quarter of 2024.
- Tax-equivalent net interest income was $85.35 million, up $4.26 million or 5.25% from the previous quarter and up $11.15 million, or 15.03% from the second quarter a year ago. Tax-equivalent net interest margin was 4.01%, up 11 basis points from the previous quarter and up 42 basis points from the second quarter a year ago.
- Provision for credit losses of $7.69 million was recorded during the quarter compared to $3.27 million in the previous quarter and a recovery of provision for credit losses of $0.31 million during the previous year’s second quarter. The allowance for loan and lease losses as a percentage of total loans and leases remained consistent with historical levels, rising to 2.30% at June 30, 2025, up from 2.29% at March 31, 2025, and 2.26% at June 30, 2024.
South Bend, IN – 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported quarterly net income of $37.32 million for the second quarter of 2025, down 0.54% compared to $37.52 million in the previous quarter and up 1.43% from the $36.79 million reported in the second quarter a year ago. Year-to-date 2025 net income was $74.84 million, up 12.97% compared to $66.25 million during the first six months of 2024. Diluted net income per common share for the second quarter of 2025 was $1.51, down 0.66% compared to $1.52 in the previous quarter and up 1.34% versus $1.49 in the second quarter of 2024. Diluted net income per common share for the first half of 2025 was $3.02 compared to $2.68 a year earlier. It was another good quarter with solid growth in net interest income offset by higher provision for credit losses and realized losses from strategic repositioning trades in the investment portfolio.
At its July 2025 meeting, the Board of Directors approved a cash dividend of $0.38 per common share, up 5.56% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on August 5, 2025, and will be paid on August 15, 2025.
Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, “We are pleased that the strong start in 2025 continued through the second quarter. In spite of the noise in the economy and the uncertainty in the market, we are proud to have achieved a sixth consecutive quarter of margin expansion resulting from higher rates on investment securities, increased average loan and lease balances, and lower deposit costs.
“While still very good, credit was challenged during the quarter with elevated net charge-offs, the majority of which were from one Auto and Light Truck account. Nonperforming assets to loans and leases at June 30, 2025 was 1.06% up from 0.63% at March 31, 2025 and the allowance for loans and lease losses as a percentage of total loans and leases remained strong at 2.30% up from 2.29% the previous quarter.
“Our balance sheet remained healthy during the quarter and is well positioned to handle the continued economic uncertainty, which is impacting our customers and their businesses. Our liquidity position is solid and our historically conservative capital position has been maintained.
“During the second quarter of 2025, we were pleased to learn that 1st Source was named to the annual Bank Honor Roll by Keefe, Bruyette & Woods, Inc. for the seventh consecutive year. We were among just 16 U.S. Banks on the list, placing our long-term performance among the top 5% of eligible banks in the United States. To be eligible, Banks must have more than $500 million in total assets and meet at least one of two criteria: consistent earnings growth over each of the past 10 years, and/or the top 5% of eligible banks based on a 10-year earnings per share compounded annual growth rate. To be named to this list for the seventh year in a row is evidence that our mission to help our clients achieve security, build wealth, and realize their dreams directly correlates with strong financial performance for the long term.
“Additionally, we were honored with the Indiana Banker’s Association’s (IBA) Commitment to Community award in the category of banks with $3 billion and above in assets. We were excited to be chosen for this award that celebrates bank community service efforts in Indiana. In 2024, 1st Source colleagues taught more than 200 Financial Education classes attracting more than 2,200 estimated attendees in Indiana alone. Additionally, our colleagues logged more than 14,500 volunteer hours, which included holding more than 110 Board seats for a variety of organizations in our communities. This award speaks directly to our Core Value of Community Leadership and we couldn’t be more pleased to have accepted it in person at the IBA’s Mega Conference in May.
“And finally, our recently opened Carmel Indiana Banking Center celebrated its Grand Opening and Ribbon Cutting in May. This new banking center showcases the Bank’s Side by Side banking model. Side by Side banking invites the client behind the “teller line,” enabling the Bank’s clients and bankers to have a more transparent and inclusive experience and relationship. We are thrilled to have expanded into Hamilton County, Indiana and are pleased to be able to serve new and existing clients in that market and are welcoming them to come and experience the high level of convenience and service from our banking team right in their hometown,” Mr. Murphy concluded.