Updated 4/13/25
1st Source Corporation (SRCE), based in South Bend, Indiana, has built a reputation for consistency across lending, dividends, and disciplined financial management. With over 150 years of community banking experience, the company continues to deliver steady earnings, supported by strong asset quality and a focused regional footprint. Its 2024 performance reflected this stability, posting net income of $132.6 million and earnings per share of $5.36. The bank also increased its dividend for the 37th consecutive year, maintaining a payout ratio just above 26%. While recent price action has pulled the stock below key moving averages, fundamentals remain solid. With a current dividend yield of 2.70%, modest valuation, and an experienced leadership team, SRCE offers investors a blend of income and operational strength.
Recent Events
SRCE wrapped up 2024 on a strong note. Revenue came in at $374.66 million for the year, reflecting a healthy 6.3% increase from the year before. Net income rose to $131.4 million, pushing earnings per share up to $5.36. That’s a 10.6% improvement on the bottom line—not bad at all in an environment where many regional banks are just trying to hold steady.
The bank’s return on equity of 11.79% and return on assets of 1.50% show it’s operating efficiently. With a profit margin of 35.4%, it’s clear management has kept costs in check while still growing the top line.
Liquidity is also in good shape. SRCE ended the year with more than $141 million in cash, and debt remains manageable at just under $360 million. That’s a solid balance sheet that should give dividend investors confidence.
A slight uptick in short interest over the past month might catch some attention—it jumped from about 109,000 shares in February to over 264,000 in March. That could mean some speculative activity is bubbling under the surface, but with a low beta of 0.66, the stock tends to be more stable than volatile. That kind of consistency is often exactly what dividend-focused investors are after.
Key Dividend Metrics
Here’s how SRCE’s dividend profile stacks up right now:
🟢 Forward Dividend Yield: 2.70%
📈 5-Year Average Yield: 2.66%
💸 Annual Dividend Rate: $1.44
📆 Dividend Payout Ratio: 26.12%
📆 Last Dividend Date: February 14, 2025
📉 Ex-Dividend Date: February 4, 2025
📊 Trailing 12-Month Dividend Yield: 2.64%
Dividend Overview
While a 2.70% yield might not be the flashiest in the market, it’s consistent—and that consistency is backed by a history of responsible capital management. SRCE has paid dividends for decades, with a track record that reflects steady, deliberate increases rather than sporadic, unsustainable boosts.
The current payout ratio of just over 26% leaves plenty of breathing room. That low figure means the company is retaining most of its earnings for reinvestment or to build up its reserves, which can be a good thing in uncertain economic climates. It also provides flexibility if the company decides to increase payouts down the road.
With a price-to-book ratio of 1.18 and a book value per share sitting at $45.31, investors are getting solid value without paying a premium. That kind of valuation, combined with regular dividend payments, creates a compelling case for patient investors who prioritize income and capital preservation.
Dividend Growth and Safety
SRCE’s dividend growth isn’t aggressive—but it is reliable. Over the past several years, increases have tended to be modest, often in the low to mid-single digits. That might not excite yield chasers, but it does speak to a company that understands the importance of long-term sustainability.
Earnings growth and cash flow generation support the payout. With nearly $194 million in operating cash flow and a conservative capital structure, SRCE is in a position to continue growing its dividend even if earnings flatten out for a while.
There’s no real red flag when it comes to safety. The combination of a low payout ratio, strong profitability, and disciplined financial management gives this dividend a solid foundation. For income investors looking for predictability, that kind of setup is hard to beat.
While many banks have stumbled through the past couple of years due to shifting interest rates and tighter lending conditions, SRCE’s careful approach has served it well. Its conservative lending book and focused regional footprint mean it’s not exposed to some of the more volatile sectors that have caused trouble for others in the industry.
All in all, 1st Source Corporation continues to do what it does best: deliver stable income, keep risk in check, and reward long-term shareholders with a dividend stream that’s been built to last.
Cash Flow Statement
1st Source Corporation’s trailing twelve-month cash flow paints a picture of steady operational strength. Operating cash flow came in at $193.9 million, continuing an upward trend over the past few years. This reliable inflow supports the bank’s ability to fund its dividend and maintain a solid capital position. Free cash flow stood at $181.5 million, remaining almost flat compared to the previous year, which indicates strong internal funding capacity without dependence on external financing.
On the investing side, outflows were sizable at $276.6 million, reflecting continued investment in securities and possibly lending activities—core components of a bank’s business model. Financing activities brought in $77.9 million, a drop from the previous year’s $177.2 million, but still supportive of liquidity. While capital expenditures increased to $12.4 million, they remain modest relative to overall cash generation. Despite heavier interest payments and reduced financing inflows, the end cash position held fairly steady at $124.8 million. This consistency reinforces the company’s ability to weather market shifts while continuing to reward shareholders.
Analyst Ratings
📈 Analysts have shown a measured optimism toward 1st Source Corporation (SRCE) in recent months. The consensus rating has shifted to a “Moderate Buy,” reflecting a blend of confidence and caution among the analyst community. This change is underpinned by the company’s consistent earnings performance and its prudent financial management.
🎯 The average 12-month price target for SRCE stands at $69.50, with estimates ranging from a low of $67.00 to a high of $72.50. That suggests a potential upside of about 28% from current levels. The upward movement in price targets stems from the bank’s solid quarterly earnings, which have consistently met or slightly outpaced expectations. Analysts also pointed to SRCE’s strong asset quality and its steady hand on expenses as reasons to be optimistic about future performance.
🔼 One of the more notable recent moves came from a shift in rating to “Overweight” from “Neutral,” with the reasoning tied closely to the bank’s solid fundamentals and smart positioning in a market where many regional banks are still trying to find their footing. This upgrade speaks to a growing belief that SRCE can maintain its momentum and continue delivering reliable returns for shareholders.
Earning Report Summary
1st Source Corporation wrapped up 2024 with a strong finish, continuing a streak of steady growth that’s becoming a bit of a hallmark for this Indiana-based bank. Net income for the year came in at $132.6 million, which is up just over 6% from the previous year. That translated to earnings of $5.36 per share—an improvement from $5.03 in 2023. The fourth quarter alone brought in $31.4 million in net income, giving the year a solid close, despite a few bumps along the way.
The quarter included a notable $3.9 million pre-tax loss from the sale of some investment securities, but even with that, the bank still came out ahead. It speaks to the strength of their core operations—when you can take a hit like that and still grow earnings, you’re clearly managing things well.
Margins, Loans, and Deposits
One of the bright spots in the report was the expansion of the net interest margin, which hit 3.64% for the year and 3.78% in the fourth quarter. That kind of margin improvement doesn’t happen by accident; it’s usually the result of disciplined pricing and a careful balance between deposit costs and loan yields. The bank’s loan and lease portfolio ended the year at $6.85 billion, up just over 5%, while deposits grew to $6.73 billion—another 5% gain.
This kind of balanced growth in both lending and deposits is exactly what you want to see from a regional bank. It shows that customer activity is healthy and that the bank isn’t having to stretch to grow either side of the balance sheet.
Dividend Growth and Leadership Insight
1st Source also continued its impressive dividend track record, increasing the quarterly payout to $0.36 per share. That’s nearly a 6% boost, and it marks the 37th consecutive year of dividend growth. For long-term shareholders, that kind of consistency is a big part of the appeal.
CEO Chris Murphy shared his thoughts on the quarter, and his tone was clearly optimistic. He pointed out the margin improvements, but also made a point of emphasizing customer service—highlighting a high Net Promoter Score as a sign that the bank is doing more than just hitting its numbers. There was also mention of the South Bend Opportunity Fund, a local program that supports small businesses with loans and coaching, reinforcing 1st Source’s community-first approach.
Looking Ahead
Murphy hinted at some forward-thinking plans too, including the bank’s new involvement with the U.S. Faster Payments Council. While that’s more behind-the-scenes for most investors, it suggests 1st Source is paying attention to the future of banking technology and wants to have a seat at the table.
All in all, 2024 looked like another steady, well-managed year for 1st Source, with enough forward momentum to carry some confidence into 2025.
Chart Analysis
SRCE has had a dynamic 12 months, with some noticeable shifts in momentum and a recent drop that catches the eye right away. Price action over the last year suggests a well-defined uptrend for much of 2023, followed by a period of weakening momentum and a clear shift downward just as the second quarter of 2025 gets underway.
Price Movement and Moving Averages
From late spring through fall, SRCE steadily climbed, riding a healthy wave above both its 50-day and 200-day moving averages. That strength peaked around late July and again in February, with prices flirting above $65. But what stands out more recently is the price breaking sharply below both moving averages. The 50-day moving average has now turned downward and crossed below the 200-day line—a bearish signal that often suggests the trend has shifted for the time being.
This kind of crossover typically reflects a transition from optimism to caution, especially when it’s confirmed by rising volume, as seen during the most recent selloff in April.
Volume and Momentum
Volume remained relatively calm through most of the year, but the sharp spike in activity during the recent drop suggests stronger conviction on the downside. That kind of volume often comes from a reaction to earnings, news, or a broader market trend shift. It’s not always long-lasting, but it’s worth noting when accompanied by a decisive price break like this one.
RSI and Relative Strength
The RSI dipped below 30 in the most recent move lower, signaling an oversold condition. That might normally suggest a possible bounce or some consolidation ahead, but it’s also a reflection of how strong the selling pressure has been. Prior RSI peaks, particularly around February, reached well into overbought territory, which was a clear sign at the time that things were getting stretched.
Since then, momentum has cooled, and the stock hasn’t really recovered its footing—at least not yet.
Broader View
Zooming out, SRCE spent most of the past year building higher highs and higher lows. But the recent breakdown changes that pattern. While the long-term fundamentals may remain intact, the technical picture has shifted into a more cautious tone. The price now sits well below its 50-day and 200-day averages, and without a swift reversal, those moving averages could act as resistance rather than support going forward.
Overall, this chart suggests the stock has entered a markdown phase. After a long period of strength and distribution-like behavior through late winter, the breakdown looks to be more than just a pullback. Price needs to regain the 200-day line with conviction to suggest this was anything less than a longer-term shift.
Management Team
1st Source Corporation is led by a seasoned and stable leadership team, with Christopher J. Murphy III serving as Chairman and CEO. Murphy has guided the company through multiple market cycles and has become a steady hand at the wheel. In May 2024, Andrea G. Short was promoted to President of 1st Source Corporation while continuing in her role as President and CEO of 1st Source Bank. She’s been with the company since 1998 and has served in a variety of leadership roles, including Chief Financial Officer and Executive Vice President. Her elevation to this position signals the company’s commitment to long-term leadership continuity and thoughtful succession planning.
The executive bench also includes Brett A. Bauer as Senior Vice President, Treasurer, and Chief Financial Officer. Supporting them is a diverse board of directors, which brings together experience from various industries including finance, technology, and communications. This balanced mix helps ensure well-rounded governance and strategic oversight, particularly important in a financial institution that continues to serve its regional base with a conservative but growth-minded philosophy.
Valuation and Stock Performance
As of mid-April 2025, SRCE shares were trading at $53.42. Over the past twelve months, the stock has ranged from a low of $47.30 to a high of $68.13. Its current market capitalization sits around $1.31 billion. With a price-to-earnings ratio of just under 10, the stock appears modestly valued compared to its historical average and to many peers in the regional banking space.
The last year brought some swings, with shares rising steadily through most of 2023 before dipping sharply in early 2025. Despite that drop, the fundamentals haven’t deteriorated. Earnings remain stable, the dividend continues to grow, and the bank’s capital position remains healthy. The current dividend yield of 2.70% provides a cushion for long-term investors, especially those seeking consistent income. Analysts covering the name have placed the consensus price target near $68, suggesting that there could be room for the stock to recover if fundamentals hold and broader sentiment stabilizes.
Risks and Considerations
There are a few things to keep in mind when evaluating SRCE. First, its performance is closely linked to economic conditions in Indiana and surrounding Midwestern states. While this geographic focus has its advantages—particularly in understanding local markets—it can also expose the bank to concentrated regional risks. Any economic weakness or downturn in the area could pressure loan growth and asset quality.
Interest rates also remain a wildcard. While SRCE has navigated rising rates fairly well so far, any rapid shift in monetary policy or prolonged rate volatility could compress net interest margins. In addition, the recent decline in the share price and bearish technical signals, such as the drop below both the 50- and 200-day moving averages, suggest caution may be warranted in the near term. These are more short-term concerns, but worth noting as part of a full picture.
Final Thoughts
1st Source Corporation stands out for its measured, long-term approach to banking. Its leadership team has shown a consistent ability to grow the business without taking unnecessary risks. The company continues to return capital to shareholders through a growing dividend, and its steady balance sheet offers a strong base moving forward.
While the stock’s recent pullback may raise some eyebrows, it doesn’t appear to reflect a breakdown in the business itself. SRCE remains focused on relationship-driven, community-based banking—an approach that has served it well for over 150 years. For those looking beyond short-term price movements, the company’s commitment to disciplined management and shareholder value remains clear.