1st Source Corporation Reports $132.62 Million Net Income for Fiscal Year 2024

1st Source Corporation, a bank holding company based in South Bend, Indiana, reported a net income of $132.62 million for the fiscal year ending December 31, 2024, marking an increase from $124.93 million in 2023. The diluted earnings per share rose to $5.36, up from $5.03 the previous year. The company's total assets reached $8.93 billion, with total loans and leases amounting to $6.85 billion and total deposits at $7.23 billion. The return on average total assets was 1.52%, slightly up from 1.48% in 2023, while the return on average common shareholders’ equity decreased to 12.54% from 13.48%.

The financial performance reflects a $22.17 million increase in net interest income, which rose to $300.82 million, driven by a higher yield on loans and leases. However, this was partially offset by a $6.60 million increase in the provision for credit losses and a $4.32 million decrease in noninterest income. The company’s noninterest income totaled $86.31 million, down from $90.62 million in 2023, primarily due to declines in equipment rental income and losses on investment securities. Noninterest expenses increased marginally by 0.93% to $203.60 million, influenced by higher salaries and employee benefits.

In terms of strategic developments, 1st Source continued to expand its Specialty Finance Group, which provides financing for construction equipment and aircraft, among other sectors. The company also reported a 21.91% increase in its renewable energy loan portfolio, reflecting strong demand driven by incentives from the Inflation Reduction Act. The total employee headcount at the end of 2024 was approximately 1,205, with a focus on enhancing diversity and inclusion within the workforce.

Operationally, 1st Source Bank's loan and lease portfolio showed growth across several segments, particularly in construction equipment and commercial real estate, which increased by 10.98% and 7.56%, respectively. However, the auto and light truck segment saw a decline of 1.91%, attributed to higher interest rates affecting vehicle rental and leasing decisions. The company also reported an increase in nonperforming assets, which rose to $31.33 million from $24.24 million in 2023, primarily due to challenges in the construction equipment portfolio.

Looking ahead, 1st Source Corporation expressed a cautious outlook for 2025, anticipating continued economic challenges due to elevated inflation and high interest rates. The company plans to maintain a conservative approach to lending and credit risk management, particularly in sectors showing signs of stress, such as commercial real estate and auto rental. The management remains focused on leveraging its strong capital position, with a well-capitalized status under regulatory guidelines, to navigate potential market fluctuations and support future growth initiatives.