1st Source reports Q2 2025 net income of $37.32 million, up 1.43% year-over-year

SOUTH BEND, Indiana - 1st Source Corporation (NASDAQ:SRCE), parent company of 1st Source Bank and a regional bank with a market capitalization of $1.52 billion, reported second quarter 2025 net income of $37.32 million, a slight decrease of 0.54% from the previous quarter but up 1.43% compared to the same period last year. The company maintains a strong financial health rating according to InvestingPro analysis.

Diluted earnings per share reached $1.51, down $0.01 from the first quarter but up $0.02 from $1.49 in the second quarter of 2024. The results include $1 million in pre-tax losses from the sale of approximately $26 million in available-for-sale securities.

The bank’s board approved a quarterly cash dividend of $0.38 per share, representing a 5.56% increase from the dividend declared a year ago. The dividend will be paid on August 15 to shareholders of record as of August 5. This marks the company’s 32nd consecutive year of dividend increases, with a current yield of 2.45%. InvestingPro data reveals seven additional key insights about the company’s financial strength and growth potential.

Tax-equivalent net interest income rose to $85.35 million, up 5.25% from the previous quarter and 15.03% year-over-year. The net interest margin improved to 4.01% on a tax-equivalent basis, an increase of 11 basis points from the first quarter and 42 basis points from a year ago.

Average loans and leases grew by $169.51 million or 2.49% from the previous quarter, with the most significant growth in Commercial and Agricultural, Renewable Energy, and Construction Equipment portfolios.

The bank recorded a provision for credit losses of $7.69 million during the quarter compared to $3.27 million in the previous quarter. Nonperforming assets to loans and leases increased to 1.06% from 0.63% in the previous quarter, primarily due to one Auto and Light Truck relationship.

Return on average assets decreased to 1.67% from 1.72% in the previous quarter and 1.69% in the second quarter of 2024, while return on average common shareholders’ equity fell to 12.61% from 13.33% in the first quarter.

Based on a press release statement, 1st Source operates 78 banking centers and serves the northern half of Indiana and southwest Michigan. The company trades at an attractive P/E ratio of 10.94x and demonstrates lower volatility with a beta of 0.66. According to InvestingPro Fair Value analysis, the stock appears slightly overvalued at current levels.

In other recent news, 1st Source Corporation held a shareholder meeting where significant decisions were made. The company announced the election of four directors to its Board, with terms set to expire in April 2028. The directors elected include John F. Affleck-Graves, Daniel B. Fitzpatrick, Christopher J. Murphy IV, and Isaac P. Torres. Each candidate received varying levels of support, with Christopher J. Murphy IV and Isaac P. Torres receiving the highest number of votes in favor. Additionally, shareholders ratified the company’s independent registered public accounting firm for the upcoming fiscal year. These developments reflect the company’s ongoing governance activities and planning for the future. The shareholder meeting was a key event for the company, emphasizing its commitment to structured leadership and financial oversight.

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