1st Source Corporation delivered a profitable Q2 2024, with revenue of $97.27 million and net income of $36.79 million, translating to EPS of $1.49. The company posted a strong operating margin of 50.7% and a net margin of 37.8%, underscoring disciplined cost management and a favorable mix of earnings drivers despite a year-over-year revenue decline. The quarter also highlighted solid cash generation and a robust liquidity and capital position, with free cash flow of $46.41 million and cash plus short-term investments totaling approximately $1.61 billion against total liabilities of $7.76 billion and stockholders’ equity of about $1.04 billion.
Looking sequentially, QoQ improvements in profitability metrics and a modest revenue uptick point to ongoing earnings resilience even as top-line growth remains challenged versus the prior-year period. The balance sheet exhibits ample liquidity and manageable leverage, which supports ongoing credit underwriting discipline and potential capital deployment in a conservative risk framework. Management commentary (where available) emphasizes efficiency, client-centric fee-generating activities, and strategic balance sheet management as primary levers for the remainder of 2024.
Key Performance Indicators
Revenue
Decreasing
97.27M
QoQ: 3.40% | YoY: -21.13%
Gross Profit
Increasing
97.27M
1.00% margin
QoQ: 3.40% | YoY: 6.61%
Operating Income
Increasing
49.35M
QoQ: 24.79% | YoY: 17.30%
Net Income
Increasing
36.79M
QoQ: 24.88% | YoY: 13.44%
EPS
Increasing
1.49
QoQ: 25.21% | YoY: 14.62%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $97.27M (YoY down 21.13%, QoQ up 3.40%); Gross Profit: $97.27M (YoY up 6.61%, QoQ up 3.40%); Operating Income: $49.35M (YoY up 17.30%, QoQ up 24.79%); Net Income: $36.79M (YoY up 13.44%, QoQ up 24.88%); EPS: $1.49 (YoY up 14.62%, QoQ up 25.21%).
Margins and profitability show robust operating leverage in QQ2 2024, with an operating margin of 50.7% and a net margin of 37.8% (based on reported metrics). EBITDA is $49.40M, with an EBITDAR of 0.508. Interest expense stood at $47.12M while depreciation and amortization were $2.83M, contributing to an EBITDA-driven profitability narrative.
Liquidity and balance sheet: Total assets $8.878B; cash and cash equivalents $89.6M; short-term investments $1.523B; total current assets $1.645B; total current liabilities $7.484B; long-term debt $97.9M; short-term debt $288.2M; total debt $386.1M; stockholders’ equity $1.043B. Debt-to-capitalization 0.232, debt-to-equity 0.302, ROA 0.414%, ROE 3.53%, and cash flow from operations $49.99M with free cash flow $46.41M. Dividend payout ratio implied in the data is about 23.4%. Compared with peers, SRCE trades around a price-to-earnings of ~8.9 and price-to-book of ~1.26, suggesting a modestly discounted valuation vs many regional peers with higher earnings multiples.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
97.27M
-21.13%
3.40%
Gross Profit
97.27M
6.61%
3.40%
Operating Income
49.35M
17.30%
24.79%
Net Income
36.79M
13.44%
24.88%
EPS
1.49
14.62%
25.21%
Key Financial Ratios
Gross Profit Margin
Weak
1.00%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Excellent
50.70%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Excellent
37.80%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Weak
0.41%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
3.53%
Return on equity suggests inefficient capital allocation
Current Ratio
Concern
0.07
Current ratio below safe levels, potential liquidity risk
Debt to Equity
Moderate
0.30
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
Value
8.90x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Fair Value
1.26x
Price-to-book ratio reasonable for profitable companies
Management Insights Available for Members
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