1st Source Q2 net interest income up driven by higher loan and deposit balances

Overview

• U.S. regional bank's Q2 net income and EPS rose over 25% yr/yr to record levels

• Net interest income for Q2 increased 9% yr/yr, supported by higher loan and deposit balances

• Company approved a quarterly dividend increase to $0.45 per share, up 18% from a year ago

Outlook

• Company did not provide specific guidance or outlook for future quarters or full year

Result Drivers

• LOAN AND DEPOSIT GROWTH - Average loans and leases grew 1.71% and average deposits rose 3.28% from the previous qtr, mainly in commercial and agricultural, renewable energy, construction equipment, and commercial real estate portfolios

• CREDIT QUALITY IMPROVEMENT - Provision for credit losses fell sharply due to fewer special attention loans, reduced net charge-offs, and lower nonperforming assets

• NONINTEREST INCOME - Noninterest income increased 8.8% from the previous qtr, mainly from higher trust and wealth advisory income, seasonal tax fees, and increased debit card and brokerage income

Company press release: ID:nNFC1nBSK9

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for 1st Source Corp is $79.00, about 4.6% below its July 22 closing price of $82.84

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

• July 22 - Juniata Valley Q2 profit rises 32% on loan growth, higher interest income

• July 23 - Dime Community Bancshares Q2 revenue hits record on loan growth

• July 23 - Civista Bancshares Q2 profit rises 30%, interest margin expands

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)