1St Source Corp (NASDAQ: SRCE)

Sector: Financial Services Industry: Banks - Regional CIK: 0000034782
Market Cap 1.83 Bn
P/B 2.15
P/E 21.22
P/S 6.03
ROIC (Qtr) 10.37
Div Yield % 2.14
Rev 1y % (Qtr) 16.82
Total Debt (Qtr) 340.72 Mn
Debt/Equity (Qtr) 0.27
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About

1ST Source Corp, with ticker symbol SRCE, is a prominent player in the financial services industry, operating as a bank holding company headquartered in South Bend, Indiana. The company's operations span a broad array of financial products and services, including commercial and consumer banking, trust and wealth advisory services, insurance, and specialty finance. 1ST Source Corporation's main business activities encompass providing financial solutions to a diverse range of customers, including privately owned businesses, individuals, and institutions....

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Investment thesis

Bull case

  • Strong operating cash flow of 223.12M provides robust 0.65x coverage of total debt 340.71M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 8.97B provides 26.33x coverage of total debt 340.71M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 215.39M exceeds capital expenditure of 7.72M by 27.89x, indicating strong organic growth funding capability.
  • Operating cash flow of 223.12M provides strong 36x coverage of stock compensation 6.20M, indicating sustainable incentive practices.
  • Operating cash flow of 223.12M provides strong 7.59x coverage of operating expenses 29.40M, showing operational efficiency.

Bear case

  • Operating cash flow of 223.12M barely covers its investment activities of (154.22M), with a coverage ratio of -1.45, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 223.12M provides thin coverage of dividend payments of (38.43M) with a -5.81 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 215.39M represents just -16.67x of debt issuance (12.92M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 223.12M shows concerning coverage of minority interest expenses of (18000), which is -12395.39x, suggesting complex corporate structure risks.
  • Operating cash flow of 223.12M is outpaced by equity issuance of (13.74M) (-16.24 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PNC Pnc Financial Services Group, Inc. 99.49 Bn 13.81 5.85 62.34 Bn
2 USB Us Bancorp \De\ 87.84 Bn 19.01 4.52 77.98 Bn
3 NU Nu Holdings Ltd. 81.18 Bn 32.10 5.77 4.49 Bn
4 NWG NatWest Group plc 63.11 Bn 9.11 2.81 168.56 Bn
5 RF Regions Financial Corp 39.59 Bn 38.18 7.68 6.09 Bn
6 TFC Truist Financial Corp 39.02 Bn 20.15 4.25 71.11 Bn
7 FITB Fifth Third Bancorp 34.49 Bn -132.65 9.50 18.94 Bn
8 MTB M&T Bank Corp 33.34 Bn 20.67 5.83 14.99 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.22 0.13
EV to Cash from Ops. EV/CFO 12.44 13.53
EV to Debt EV to Debt 5.93 7.69
EV to EBIT EV/EBIT 17.94 24.25
EV to EBITDA EV/EBITDA 13.75 12.10
EV to Free Cash Flow [EV/FCF] EV/FCF 12.49 6.13
EV to Market Cap EV to Market Cap 1.11 1.08
EV to Revenue EV/Rev 6.67 6.13
Price to Book Value [P/B] P/B 2.15 1.91
Price to Earnings [P/E] P/E 21.22 10.51
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.12 276.83
Dividend Payout Ratio % Div Payout % (Qtr) 23.70 34.36
Dividend per Basic Share Div per Share (Qtr) 1.56 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 17.70 24.01
Interest Coverage Interest Coverage 0.00 -0.06
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -11.23 -73.37
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -3.98 18.43
Dividend Growth (1y) % Div 1y % (Qtr) 9.86 5.56
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 19.34 117.24
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 17.57 36.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 19.49 61.65
EBT Growth (1y) % EBT 1y % (Qtr) 19.49 61.55
EPS Growth (1y) % EPS 1y % (Qtr) 19.59 65.85
FCF Growth (1y) % FCF 1y % (Qtr) 15.24 186.92
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.43 12.98
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.17 0.25
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.27 0.52
Interest Cover Ratio Interest Cover Ratio 0.00 -0.06
Times Interest Earned Times Interest Earned 0.00 -0.06
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 51.20 150.40
EBIT Margin % EBIT Margin % (Qtr) 48.52 157.97
EBT Margin % EBT Margin % (Qtr) 48.52 157.21
Gross Margin % Gross Margin % (Qtr) 100.00 97.97
Net Profit Margin % Net Margin % (Qtr) 37.60 117.48