1st Source Corporation Reports Increased Net Income and Asset Growth in Q2 2025

1st Source Corporation reported a solid financial performance for the second quarter of 2025, with net income available to common shareholders reaching $37.32 million, a slight increase from $36.79 million in the same period last year. For the first half of 2025, net income totaled $74.84 million, compared to $66.25 million in the prior year. The diluted earnings per share for the quarter was $1.51, up from $1.49 a year earlier, while the year-to-date figure rose to $3.02 from $2.68. The company’s return on average common shareholders’ equity was 12.96%, slightly down from 13.10% in the previous year, but the return on total average assets improved to 1.69% from 1.53%.

Total assets increased to $9.09 billion as of June 30, 2025, marking a 1.74% rise from $8.93 billion at the end of 2024. The growth was primarily driven by a $243.16 million increase in total loans and leases, which reached $7.10 billion. Notable contributors to this growth included the renewable energy, commercial and agricultural, and commercial real estate portfolios. However, the consumer and medium and heavy-duty truck portfolios experienced declines. Total deposits also rose by 2.94% to $7.44 billion, with increases in savings, time, and interest-bearing demand deposits, although non-interest-bearing deposits saw a decrease.

In terms of operational developments, 1st Source Corporation reported a significant increase in its allowance for loan and lease losses, which rose to $163.48 million from $155.54 million at the end of 2024. This increase was attributed to loan growth and a rise in special attention balances, particularly in the auto and light truck portfolio. The company also noted a rise in nonperforming assets, which totaled $75.54 million, a 141.08% increase from December 31, 2024, primarily due to higher nonaccrual loans and leases.

Looking ahead, 1st Source Corporation remains cautious about the economic environment, citing concerns over geopolitical instability, trade policy uncertainties, and elevated inflation and interest rates. The company anticipates that these factors may impact its loan portfolios and overall financial performance. Despite these challenges, management believes that the current funding sources provide adequate liquidity to meet cash flow needs, and they continue to monitor credit quality closely. The company’s capital ratios remain strong, with a shareholders’ equity-to-assets ratio of 13.19% as of June 30, 2025, up from 12.44% at the end of 2024.