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Jun 30, 2021
1st Source Q2 2021 Earnings Report
Reported record second quarter results and increased cash dividend.
Key Takeaways
1st Source Corporation reported record quarterly net income of $30.22 million for the second quarter of 2021, up 63.35% from the $18.50 million reported in the second quarter a year ago. Diluted net income per common share for the second quarter of 2021 was up 65.28% to $1.19 versus $0.72 in the second quarter of 2020.
Net income was a record $30.22 million for the quarter, up 63.35% from the second quarter of 2020.
Diluted net income per common share was also a record at $1.19, up from the prior year’s second quarter of $0.72.
Cash dividend of $0.31 per common share approved, up 10.71% from the $0.28 per common share declared a year ago.
Return on average assets of 1.58% and return on average common shareholders’ equity of 13.49% compared to 1.04% and 8.63%, respectively in the second quarter of 2020.
1st Source
1st Source
Forward Guidance
The company is optimistic that continued vaccination adoption among the communities and businesses they serve will sustain the positive economic momentum they have seen over the last three months. The company will continue to review and analyze data from local health departments to make the best decisions possible for the health and safety of their team members, clients and communities as new variants of COVID develop.
Positive Outlook
- Credit uncertainty continues to improve substantially which resulted in a reduction to our provision for credit losses.
- Clients continued to receive Paycheck Protection Program (PPP) loan forgiveness during the second quarter.
- Total PPP loans forgiven during 2021 were $291.32 million which provided $5.68 million in accelerated fee income.
- Vaccination rates among colleagues has grown steadily, and as an organization, we have reached a high level of inoculation.
- Lobbies are open, and bankers are able to more freely meet with business and consumer clients.
Challenges Ahead
- New variants of COVID develop.
- Demand for leases declined.
- Realized losses on the sale of available-for-sale debt securities due to repositioning in the investment portfolio.
- Reduced mortgage banking income resulting from a lower sales volume.
- Bus division of the auto and light truck portfolio continues to be impacted by the lingering impact the pandemic has had on events and tourism.