D.A. Davidson: 1st Source's Discipline Has Led To Profitability

In a report published Wednesday, D.A. Davidson analyst Stephen Geyen initiated coverage of

with a Neutral rating and a price target of $34. In the report, D.A. Davidson noted, "1st Sources is a disciplined, moderate growth small-cap bank with above peer profitability driven by strong credit and a management team that pays close attention to maintaining operating efficiency." Among the most distinct aspects about the company is that the management team views its "diversified commercial & specialty lending segments as scalable to market conditions," Geyen said, while adding, "A focus on the long term profitability of the bank has on occasion driven decisions to step back from some business lines when the profitability of a relationship doesn't meet a hurdle rate." "Since 2010, SRCE has grown total loans 20% vs. the peer group median of 37%. Importantly, all growth at SRCE has been organic…Strong credit has contributed to above peer profitability," Geyen commented.