Breaking Down 1st Source Corporation (SRCE) Financial Health: Key Insights for Investors

Are you looking to invest in community banks and want to understand the financial health of 1st Source Corporation (SRCE)? Did you know that in 2024, 1st Source reported a record annual net income of $132.62 million, a 6.16% increase from 2023? With earnings per share (EPS) at $5.36, up 6.56% year-over-year, and a consistent dividend growth for 37 years, is SRCE a stable investment? Keep reading to explore key financial insights and understand why 1st Source was ranked among Forbes' America’s Best Banks in 2025.

1st Source Corporation (SRCE) Revenue Analysis

Understanding 1st Source Corporation's financial health requires a close look at its revenue streams. A detailed analysis provides key insights for investors.

Breakdown of Primary Revenue Sources:

1st Source Corporation generates revenue through a diversified business model, balancing traditional consumer banking with specialized commercial lending and finance. Key revenue sources include:

• Consumer Banking: Offering traditional banking products like checking and savings accounts, loans, and deposit services.
• Commercial, Agricultural, and Real Estate Loans: Providing financing solutions to privately owned businesses.
• Trust and Wealth Advisory Services: Delivering wealth preservation and growth guidance, trust management, and estate planning.

Year-over-Year Revenue Growth Rate:

Analyzing historical trends reveals the company's revenue growth. According to recent financial reports, 1st Source's revenue trends are as follows:

The company's current revenue (TTM) is $0.38 Billion USD, an increase over the $0.36 Billion USD in 2023.

Here’s a more detailed breakdown of annual revenue and changes:

In the fiscal year ending December 30, 2024, 1st Source had annual revenue of $484.02M with 33.19% growth.

Contribution of Different Business Segments to Overall Revenue:

Interest income is derived from consumer loans and deposits. Noninterest income comes from advisory fees, insurance-related commissions, and specialty finance services.

In the last 12 months, Commercial Banking contributed US$374.7m.

Analysis of Any Significant Changes in Revenue Streams:

1st Source’s diversified approach ensures a stable revenue stream by reducing overreliance on any single business segment.

Explore more about 1st Source Corporation's financial insights: Breaking Down 1st Source Corporation (SRCE) Financial Health: Key Insights for Investors

1st Source Corporation (SRCE) Profitability Metrics

Analyzing 1st Source Corporation's profitability involves examining its gross profit, operating profit, and net profit margins to understand its financial health and operational efficiency. By comparing these metrics against industry averages and historical trends, investors can gain valuable insights. Here's a detailed look into these key areas:

Gross Profit Margin: Gross profit is the revenue remaining after deducting the cost of goods sold (COGS). The gross profit margin, calculated as (Gross Profit / Revenue) 100, indicates how efficiently a company manages its production costs. A higher gross profit margin suggests that a company can generate more profit from each dollar of sales.

Operating Profit Margin: The operating profit margin, also known as the earnings before interest and taxes (EBIT) margin, is calculated as (Operating Profit / Revenue) 100. This metric reflects a company's profitability from its core operations, excluding interest and taxes. It provides insight into how well a company manages its operational expenses. A rising operating profit margin typically indicates improved efficiency and cost control.

Net Profit Margin: The net profit margin, calculated as (Net Profit / Revenue) 100, represents the percentage of revenue that remains after all expenses, including interest, taxes, and other overhead, have been deducted. This is a key indicator of overall profitability. A higher net profit margin suggests that a company is more effective at converting revenue into profit.

Trends in Profitability Over Time: Examining the trends in these profitability metrics over several years is crucial. Consistent improvement in gross, operating, and net profit margins can signal enhanced operational efficiency and better cost management. Conversely, declining margins may indicate rising costs, increased competition, or pricing pressures.

Comparison of Profitability Ratios with Industry Averages: Comparing 1st Source Corporation's profitability ratios with industry averages provides a benchmark for performance. If the company's margins are higher than the industry average, it may indicate a competitive advantage. Conversely, lower margins may suggest areas needing improvement.

Analysis of Operational Efficiency: Operational efficiency can be assessed through various factors, including cost management and gross margin trends. Effective cost management involves controlling expenses related to production, administration, and sales. Consistent or improving gross margins indicate that the company is managing its production costs effectively and maintaining pricing power.

For further insights into 1st Source Corporation's financial health, you can explore additional resources. Breaking Down 1st Source Corporation (SRCE) Financial Health: Key Insights for Investors.

1st Source Corporation (SRCE) Debt vs. Equity Structure

Understanding how 1st Source Corporation finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses both debt and equity.

As of the fiscal year 2024, 1st Source Corporation's financial structure includes a mix of debt and equity. Key aspects to consider are:

• Overview of Debt Levels: 1st Source Corporation utilizes both short-term and long-term debt to fund its activities. Analyzing the specifics of these debts provides insight into the company's financial obligations.
• Debt-to-Equity Ratio: The debt-to-equity ratio is a critical metric for evaluating 1st Source Corporation's financial leverage. This ratio, which compares total debt to shareholder equity, indicates the extent to which the company is using borrowed money to finance its assets.

As of December 31, 2024, 1st Source Corporation reported the following:

• Total assets of $8.74 billion.
• Total liabilities of $7.33 billion.
• Total equity of $1.41 billion.

Key balance sheet data impacting the debt-to-equity assessment includes:

• Short-term borrowings of $47.77 million.
• Long-term debt of $31.56 million.

The debt-to-equity ratio can be calculated as follows:

Debt-to-Equity Ratio = Total Liabilities / Total Equity

Using the 2024 data:

Debt-to-Equity Ratio = $7.33 billion / $1.41 billion ≈ 5.20

A debt-to-equity ratio of approximately 5.20 indicates that 1st Source Corporation has a substantial amount of debt compared to its equity. This level of leverage is an important factor for investors to consider.

Comparative analysis with industry standards is essential to contextualize this ratio. Different industries have varying norms for debt levels, so understanding where 1st Source Corporation stands relative to its peers provides valuable perspective.

Factors influencing the company's debt and equity decisions include:

• Recent Debt Activities: Monitoring any recent debt issuances, credit ratings, or refinancing activities helps in understanding the company's strategic financial maneuvers.
• Balancing Act: 1st Source Corporation must maintain a balance between debt financing and equity funding. Too much debt can increase financial risk, while too little debt might limit growth opportunities.

Analyzing these elements provides a comprehensive view of 1st Source Corporation's financial strategy and its implications for investors.

Here is a link to learn more: Breaking Down 1st Source Corporation (SRCE) Financial Health: Key Insights for Investors

1st Source Corporation (SRCE) Liquidity and Solvency

Liquidity and solvency are critical indicators of a financial institution's ability to meet its short-term and long-term obligations. For 1st Source Corporation (SRCE), analyzing these metrics provides insights into its financial stability and operational efficiency.

Assessing 1st Source Corporation's Liquidity:

Understanding 1st Source Corporation's liquidity involves examining key ratios and cash flow trends that reflect its capacity to cover its immediate liabilities.

• Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventory from current assets to provide a more conservative measure.
• Analysis of Working Capital Trends: Working capital, defined as the difference between current assets and current liabilities, indicates the company's operational liquidity. Monitoring changes in working capital helps identify whether the company's short-term financial health is improving or deteriorating.
• Cash Flow Statements Overview: The cash flow statement is divided into three sections: operating activities, investing activities, and financing activities. Analyzing the trends in each section can reveal how the company generates and uses cash.
  • Operating Cash Flow: Indicates the cash a company generates from its normal business operations. A positive and growing operating cash flow is generally a sign of financial health.
  • Investing Cash Flow: Relates to the purchase and sale of long-term assets. Significant outflows in this section might indicate investments in future growth.
  • Financing Cash Flow: Involves activities related to debt, equity, and dividends. This section shows how the company is funding its operations and returning value to shareholders.

Potential Liquidity Concerns or Strengths:

Based on the fiscal year 2024 data, a comprehensive liquidity assessment would highlight any areas of concern, such as declining cash reserves or increasing short-term debt, as well as strengths, like a consistently positive operating cash flow or a high current ratio.

Example Table: Key Liquidity Ratios and Metrics (Illustrative)

For a broader view of 1st Source Corporation's financial well-being, you might find this resource helpful: Breaking Down 1st Source Corporation (SRCE) Financial Health: Key Insights for Investors.

1st Source Corporation (SRCE) Valuation Analysis

Assessing whether 1st Source Corporation (SRCE) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance, and analyst sentiment. Let's delve into these aspects to provide a clearer picture of SRCE's valuation. For additional insights, you might find this resource helpful: Breaking Down 1st Source Corporation (SRCE) Financial Health: Key Insights for Investors.

One of the primary methods to gauge valuation is through ratios like the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA). These ratios offer a relative view by comparing SRCE's market value to its earnings, book value, and operational profitability. For instance, a high P/E ratio might suggest that the stock is overvalued because investors are paying a premium for each dollar of earnings. Conversely, a low P/B ratio could indicate undervaluation, implying that the market price is low relative to the company's net asset value.

Analyzing 1st Source Corporation (SRCE)’s stock price trends over the past year or longer provides context on market sentiment and investor confidence. A steadily increasing stock price may reflect positive market perception, driven by factors such as strong financial performance or favorable industry trends. Conversely, a declining stock price could signal concerns about the company's prospects. As of April 2025, it’s important to consider these trends in light of broader market conditions and SRCE-specific developments.

If 1st Source Corporation (SRCE) distributes dividends, the dividend yield and payout ratios are crucial for valuation. The dividend yield, calculated as the annual dividend per share divided by the stock price, indicates the return on investment from dividends alone. The payout ratio, which is the proportion of earnings paid out as dividends, shows the sustainability of dividend payments. A high dividend yield might make the stock attractive to income-seeking investors, but a high payout ratio could raise concerns about the company's ability to maintain those payments.

Furthermore, analyst consensus plays a significant role in valuation assessment. Analysts' ratings (buy, hold, or sell) and price targets reflect their collective view on the stock's potential upside or downside. A consensus of 'buy' ratings suggests that analysts believe the stock is undervalued and has room to grow, while 'sell' ratings indicate the opposite. It’s essential to consider the range of opinions and the analysts' track records to gauge the reliability of their assessments.

To illustrate, let's consider a hypothetical scenario with sample data for 1st Source Corporation (SRCE):

Based on this hypothetical data, 1st Source Corporation (SRCE) appears to be reasonably valued, with a mix of positive and neutral indicators. The positive stock price trend and sustainable dividend payments are encouraging, but the 'hold' analyst consensus suggests that investors should exercise caution and conduct further research before making investment decisions.

1st Source Corporation (SRCE) Risk Factors

Understanding the risks 1st Source Corporation faces is crucial for investors. These risks can stem from both internal and external factors, influencing the company's financial stability and future performance. Here's a breakdown of key risk areas:

Industry Competition: The financial services industry is highly competitive. 1st Source Corporation competes with other banks, credit unions, and non-bank financial institutions. Increased competition could lead to pressure on interest rates, reduced loan volumes, and decreased profitability.

Regulatory Changes: Banks are subject to extensive regulation. Changes in laws and regulations can impact 1st Source Corporation's operations, compliance costs, and business strategies. For example, changes related to capital requirements, lending practices, or consumer protection laws could have a material impact.

Market Conditions: Economic downturns, changes in interest rates, and other market fluctuations can significantly affect 1st Source Corporation. Rising interest rates can decrease demand for loans, while economic recessions can increase loan defaults and reduce overall business activity.

Operational Risks: These include risks related to 1st Source Corporation's internal processes, systems, and people. Examples include:

• Cybersecurity threats and data breaches
• Failures in internal controls
• Inadequate risk management practices
• Operational disruptions due to natural disasters or other events

Financial Risks: These risks pertain to 1st Source Corporation's financial position, including:

• Credit risk (the risk of borrowers defaulting on loans)
• Liquidity risk (the risk of being unable to meet financial obligations)
• Interest rate risk (the risk of earnings declining due to changes in interest rates)
• Investment risk (the risk of losses on investment securities)

Strategic Risks: These involve risks related to 1st Source Corporation's business strategy and long-term goals. Examples include:

• Failure to adapt to changing customer preferences or technological advancements
• Unsuccessful expansion into new markets or business lines
• Reputational damage due to negative publicity or ethical lapses

To mitigate these risks, 1st Source Corporation likely has strategies and plans in place. These may include:

• Diversifying its loan portfolio to reduce concentration risk
• Implementing robust cybersecurity measures to protect against data breaches
• Maintaining adequate capital levels to absorb potential losses
• Developing contingency plans to address operational disruptions
• Staying informed about regulatory changes and adapting its practices accordingly

For more insights into 1st Source Corporation, check out: Exploring 1st Source Corporation (SRCE) Investor Profile: Who’s Buying and Why?

1st Source Corporation (SRCE) Growth Opportunities

1st Source Corporation's future growth prospects are influenced by several key factors, including strategic initiatives, market conditions, and competitive advantages. Understanding these elements provides valuable insight for investors.

Analysis of key growth drivers:

• Product Innovations: 1st Source Corporation can drive growth through innovative financial products and services tailored to meet the evolving needs of its customer base. This includes digital banking solutions, specialized lending programs, and wealth management services.
• Market Expansions: Expanding into new geographic markets or customer segments represents another growth avenue. This could involve opening new branches, targeting specific industries, or expanding services to underserved communities.
• Acquisitions: Strategic acquisitions of smaller banks or financial service providers can quickly expand 1st Source Corporation's market share and service offerings.

Future revenue growth projections and earnings estimates will depend on the successful execution of these strategies, as well as broader economic conditions. While specific projections vary, analysts often consider factors such as loan growth, net interest margin, and fee income when estimating future performance.

Strategic initiatives and partnerships that may drive future growth:

• Technology Investments: Investing in technology to improve operational efficiency, enhance customer experience, and develop new digital products is crucial.
• Community Engagement: Strengthening ties with local communities through philanthropic activities and community development initiatives can enhance the company's reputation and attract new customers.
• Strategic Partnerships: Collaborating with other financial institutions or technology companies can provide access to new markets, products, or expertise.

Competitive advantages that position the company for growth:

• Strong Local Presence: 1st Source Corporation's deep roots in its local markets provide a competitive advantage through established relationships and local market knowledge.
• Customer Service: A reputation for excellent customer service can differentiate 1st Source Corporation from larger, less personalized competitors.
• Diversified Business Model: A diversified mix of lending, wealth management, and other financial services can provide stability and growth opportunities across different economic cycles.

Here's a look at key financial data:

For more insights into 1st Source Corporation, check out: Exploring 1st Source Corporation (SRCE) Investor Profile: Who’s Buying and Why?