SOUTH BEND, Indiana - 1st Source Corporation (NASDAQ: SRCE), the parent company of 1st Source Bank, reported a mixed financial performance for the first quarter of 2024. The company announced a quarterly net income of $29.46 million, a slight increase of 3.61% from the previous quarter but a decrease of 5.36% from the first quarter of 2023. The diluted net income per common share stood at $1.19, up from the previous quarter by $0.04 or 3.48% but down from $1.25 in the same period last year.
The Board of Directors approved a cash dividend of $0.34 per common share, which is a 6.25% increase from the cash dividend declared a year ago. This dividend is payable to shareholders on record as of May 6, 2024, with the payment date set for May 15, 2024.
Average loans and leases experienced growth, increasing by $116.21 million or 1.82% from the previous quarter and by $467.87 million or 7.75% compared to the first quarter of 2023. However, average deposits saw a slight decline of $57.56 million or 0.81% from the previous quarter, although they grew by $142.10 million or 2.07% year-over-year.
Tax-equivalent net interest income for the first quarter was $72.06 million, a marginal increase of 0.79% from the fourth quarter of 2023 and a 3.26% rise from the first quarter of the previous year. The tax-equivalent net interest margin was reported at 3.54%, which is an increase from the previous quarter but a decrease from the same period last year.
The company faced credit challenges with net charge-offs amounting to $6.12 million or 0.38% of average loans and leases during the quarter, primarily due to two commercial business accounts. The allowance for loan and lease losses remained unchanged at 2.26% from the end of 2023.
1st Source Corporation's capital position remained solid, with the common equity-to-assets ratio at 11.65% and the tangible common equity-to-tangible assets ratio at 10.79% as of March 31, 2024.
The company's performance was acknowledged with several rankings, including 14th in the country and number 1 in Indiana in Forbes' 15th annual America's Best Banks list, and 22nd in S&P Global Market Intelligence's Top 50 Community Banks with $3B to $10B in assets.
This news is based on a press release statement from 1st Source Corporation.
InvestingPro Insights
1st Source Corporation (NASDAQ: SRCE) has demonstrated a commitment to shareholder returns, as evidenced by the 6.25% increase in its cash dividend, marking a continued trend of dividend growth. In fact, according to InvestingPro Tips, the company has raised its dividend for 31 consecutive years, showcasing its financial stability and dedication to providing consistent shareholder value.
With a focus on the company's valuation, 1st Source Corporation is currently trading at a P/E ratio of 10.11, which is slightly higher than its adjusted P/E ratio for the last twelve months as of Q4 2023, standing at 10.07. This indicates a relatively stable valuation over the recent period. Moreover, the company's Price / Book ratio as of the same period is 1.26, suggesting a reasonable valuation in terms of its assets.
On the operational front, 1st Source Corporation reported a solid operating income margin of 46.12% for the last twelve months as of Q4 2023, reflecting efficient management and a strong competitive position in its market. However, InvestingPro Tips highlight that the company suffers from weak gross profit margins, which could be an area for potential improvement.
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