1st Source Corporation (NASDAQ:SRCE), parent company of 1st
Source Bank, today announced record net income of $58.07 million
for the year of 2014, a 5.66% increase over the $54.96 million in
2013. The annual net income is the highest in company history.
Fourth quarter net income was $15.00 million, up 9.33% compared to
$13.72 million in the fourth quarter of 2013.
Diluted net income per common share for the year was $2.39,
another all-time record and an increase of 7.17% over the $2.23 per
common share a year earlier. Diluted net income per common share
for the fourth quarter was $0.62, up 10.71% compared to $0.56 per
common share reported in the fourth quarter of the previous
year.
At its January 2015 meeting, the 1st Source Board of Directors
approved a cash dividend of $0.18 per common share. The cash
dividend is payable on February 13, 2015 to shareholders of record
on February 3, 2015. Dividends for 2014 increased 4.41% over the
previous year.
According to Christopher J. Murphy, III, Chairman, "I am pleased
to report a steady fourth quarter and another solid year for 1st
Source Corporation. We achieved record earnings yet again and
continued our streak of 27 years of consecutive dividend growth. It
was also a year of celebration, as we began our 151st year of
helping clients achieve security, build wealth and realize their
dreams. We increased our primary client relationships in all of our
markets. We were also able to decrease our nonperforming assets and
grow our loan and lease outstandings by almost $140 million during
the year, while reducing our exposure to some more risk challenged
markets."
"We ended the year having refurbished six banking centers and
opening two new ones in Fort Wayne, Indiana. The grand openings
marked the completion of an $8 million investment in that market,
the second largest city in Indiana. This allows us to increase our
market share in an attractive market and provide a level of
convenience and service previously not available," Murphy
concluded.
Total assets at the end of 2014 were $4.83 billion, up 2.27%
from the same period last year. Total loans and leases at December
31, 2014 were $3.69 billion, up 3.92%, and total deposits at
December 31, 2014 were $3.80 billion, up 4.08% from the same period
last year. As of December 31, 2014, the common equity-to-assets
ratio was 12.72%, compared to 12.39% at December 31, 2013 and the
tangible common equity-to-tangible assets ratio was 11.15% at
December 31, 2014 compared to 10.76% at December 31, 2013.
The net interest margin was 3.61% for the fourth quarter of 2014
versus 3.59% for the same period in 2013. The net interest margin
was 3.59% for the year ending December 31, 2014 versus 3.67% for
the year ending December 31, 2013. Tax-equivalent net interest
income was $41.29 million for the fourth quarter of 2014, up 4.53%
compared to $39.50 million for 2013’s fourth quarter. For the
twelve months of 2014, tax-equivalent net interest income was
$162.17 million, up 2.22% compared to $158.64 million for the
twelve months of 2013.
Reserve for loan and lease losses as of December 31, 2014 was
2.31% of total loans and leases, compared to 2.35% as of December
31, 2013. Net charge-offs were $1.51 million for the fourth quarter
2014, compared to $0.14 million in the fourth quarter 2013. Net
charge-offs for the full year were $2.17 million in 2014 compared
to $0.58 million in 2013. There was a recovery of provision for
loan and lease losses of $0.82 million in the fourth quarter of
2014, compared with $0.86 million for the same period in 2013. For
the twelve months of 2014, the provision for loan and lease losses
was $3.73 million compared with $0.77 million for the twelve months
of 2013. The ratio of nonperforming assets to net loans and leases
was 1.13% on December 31, 2014, compared to 1.29% on December 31,
2013.
Noninterest income for the fourth quarter of 2014 was $19.88
million, up 10.51% compared to $17.99 million for the fourth
quarter of 2013. The fourth quarter increase was primarily a result
of higher trust fees, increased equipment rental income and higher
debit card income. For the year, noninterest income was $77.89
million, up slightly from $77.21 million in 2013.
Noninterest expense for the fourth quarter of 2014 was $41.99
million, up 8.81% compared to $38.59 million for the fourth quarter
of 2013. The leading factors for the fourth quarter increase were
higher salary and employee benefits expense, other expenses,
depreciation on leased equipment, business development and
marketing expenses, loan and lease collection and repossession
expenses and professional fees. For the year ending December 31,
2014, noninterest expense was $150.04 million, up slightly from
$149.31 million one year ago.
The provision for income taxes included a one-time benefit of
$2.12 million and $3.30 million for the three and twelve months
ended December 31, 2014, respectively, which resulted in a lower
effective tax rate. These benefits were the result of a reduction
in uncertain tax positions due to settlements with taxing
authorities and the lapse of the applicable statute of
limitations.
1st Source common stock is traded on the NASDAQ Global Select
Market under “SRCE” and appears in the National Market System
tables in many daily newspapers under the code name “1st Src.”
Since 1863, 1st Source has been committed to the success of the
communities it serves. For more information, visit www.1stsource.com.
1st Source serves the northern half of Indiana and southwest
Michigan and is the largest locally controlled financial
institution headquartered in the area. While delivering a
comprehensive range of consumer and commercial banking services
through its community bank offices, 1st Source has distinguished
itself with highly personalized services. 1st Source Bank also
competes for business nationally by offering specialized financing
services for new and used private and cargo aircraft, automobiles
for leasing and rental agencies, medium and heavy duty trucks,
construction and environmental equipment. The Corporation includes
80 community banking centers in 17 counties, 9 trust and wealth
management locations, 8 1st Source Insurance offices, as well as 21
specialty finance locations nationwide.
In addition to the results presented in accordance with
generally accepted accounting principles in the United States of
America, this press release contains certain non-GAAP financial
measures. 1st Source Corporation believes that providing non-GAAP
financial measures provides investors with information useful to
understanding our financial performance. Additionally, these
non-GAAP measures are used by management for planning and
forecasting purposes, including measures based on “tangible equity”
which is “common shareholders’ equity” excluding intangible
assets.
Except for historical information contained herein, the matters
discussed in this document express “forward-looking statements.”
Generally, the words “believe,” “contemplate,” “seek,” “plan,”
“possible,” “assume,” “expect,” “intend,” “targeted,” “continue,”
“remain,” “estimate,” “anticipate,” “project,” “will,” “should,”
“indicate,” “would,” “may” and similar expressions indicate
forward-looking statements. Those statements, including statements,
projections, estimates or assumptions concerning future events or
performance, and other statements that are other than statements of
historical fact, are subject to material risks and uncertainties.
1st Source cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date
made.
1st Source may make other written or oral forward-looking
statements from time to time. Readers are advised that various
important factors could cause 1st Source’s actual results or
circumstances for future periods to differ materially from those
anticipated or projected in such forward-looking statements. Such
factors, among others, include changes in laws, regulations or
accounting principles generally accepted in the United States; 1st
Source’s competitive position within its markets served; increasing
consolidation within the banking industry; unforeseen changes in
interest rates; unforeseen downturns in the local, regional or
national economies or in the industries in which 1st Source has
credit concentrations; and other risks discussed in 1st Source’s
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K, which filings are available from the
SEC. 1st Source undertakes no obligation to publicly update or
revise any forward-looking statements.
1st SOURCE CORPORATION 4th QUARTER 2014 FINANCIAL
HIGHLIGHTS (Unaudited - Dollars in thousands, except per share
amounts)
Three Months Ended December
31, Twelve Months Ended December 31, 2014
2013 2014 2013 END OF PERIOD
BALANCES Assets $ 4,829,958 $
4,722,826 Loans and leases 3,688,574 3,549,324 Deposits 3,802,860
3,653,650 Reserve for loan and lease losses 85,068 83,505
Intangible assets 85,371 86,343 Common shareholders' equity 614,473
585,378
AVERAGE BALANCES Assets $ 4,839,479 $
4,649,245 $ 4,806,805 $ 4,607,949 Earning assets 4,536,441
4,362,005 4,513,631 4,325,907 Investments 812,497 837,180 822,021
840,798 Loans and leases 3,651,994 3,487,900 3,639,985 3,433,938
Deposits 3,844,239 3,720,299 3,777,743 3,700,509 Interest bearing
liabilities 3,361,111 3,281,486 3,395,591 3,286,558 Common
shareholders' equity 611,960 587,442 601,892 575,662
INCOME STATEMENT DATA Net interest income $ 40,839 $ 39,034
$ 160,329 $ 156,817 Net interest income - FTE 41,285 39,495 162,168
158,643 (Recovery of) provision for loan and lease losses (820 )
(859 ) 3,733 772 Noninterest income 19,876 17,985 77,887 77,212
Noninterest expense 41,991 38,590 150,040 149,314 Net income 14,996
13,716 58,069 54,958
PER SHARE DATA Basic net income
per common share $ 0.62 $ 0.56 $ 2.39 $ 2.23 Diluted net income per
common share 0.62 0.56 2.39 2.23 Common cash dividends declared
0.18 0.17 0.71 0.68 Book value per common share 25.75 24.07 25.75
24.07 Tangible book value per common share 22.17 20.52 22.17 20.52
Market value - High 35.22 32.92 35.22 32.92 Market value - Low
28.00 25.64 27.56 21.88 Basic weighted average common shares
outstanding 23,862,382 24,322,516 24,031,608 24,344,623 Diluted
weighted average common shares outstanding 23,862,382 24,323,158
24,031,608 24,345,209
KEY RATIOS Return on average
assets 1.23 % 1.17 % 1.21 % 1.19 % Return on average common
shareholders' equity 9.72 9.26 9.65 9.55 Average common
shareholders' equity to average assets 12.65 12.64 12.52 12.49 End
of period tangible common equity to tangible assets 11.15 10.76
11.15 10.76 Risk-based capital - Tier 1 14.57 14.54 14.57 14.54
Risk-based capital - Total 15.89 15.86 15.89 15.86 Net interest
margin 3.61 3.59 3.59 3.67 Efficiency: expense to revenue 67.56
66.25 60.62 62.44 Net charge offs to average loans and leases 0.16
0.02 0.06 0.02 Loan and lease loss reserve to loans and leases 2.31
2.35 2.31 2.35 Nonperforming assets to loans and leases 1.13 1.29
1.13 1.29
ASSET QUALITY Loans and leases past due 90
days or more $ 981 $ 287 Nonaccrual loans and leases 34,602 36,707
Other real estate 1,109 4,539 Former bank premises held for sale
626 951 Repossessions 5,156 4,262 Equipment owned under operating
leases 6 — Total nonperforming assets $ 42,480
$ 46,746
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited -
Dollars in thousands)
December 31, 2014
December 31, 2013
ASSETS
Cash and due from banks $ 64,834 $ 77,568 Federal funds sold and
interest bearing deposits with other banks 1,356 2,484
Investment securities available-for-sale
(amortized cost of $776,057 and $822,163 at December 31, 2014 and
2013, respectively)
791,118 832,700 Other investments 20,801 22,400 Trading account
securities 205 192 Mortgages held for sale 13,604 6,079
Loans and leases, net of unearned discount: Commercial and
agricultural loans 710,758 679,492 Auto and light truck 397,902
391,649 Medium and heavy duty truck 247,153 237,854 Aircraft
financing 727,665 738,133 Construction equipment financing 399,940
333,088 Commercial real estate 616,587 583,997 Residential real
estate 445,759 460,981 Consumer loans 142,810 124,130
Total loans and leases 3,688,574 3,549,324 Reserve for loan
and lease losses (85,068 ) (83,505 )
Net loans and leases
3,603,506 3,465,819 Equipment owned under operating leases,
net 74,143 60,967 Net premises and equipment 50,328 46,630 Goodwill
and intangible assets 85,371 86,343 Accrued income and other assets
124,692 121,644
Total assets $
4,829,958 $ 4,722,826
LIABILITIES
Deposits: Noninterest bearing $ 796,241 $ 735,212 Interest bearing
3,006,619 2,918,438
Total deposits 3,802,860
3,653,650 Short-term borrowings: Federal funds purchased and
securities sold under agreements to repurchase 138,843 181,120
Other short-term borrowings 106,979 133,011
Total
short-term borrowings 245,822 314,131 Long-term debt and
mandatorily redeemable securities 56,232 58,335 Subordinated notes
58,764 58,764 Accrued expenses and other liabilities 51,807
52,568
Total liabilities 4,215,485 4,137,448
SHAREHOLDERS'
EQUITY
Preferred stock; no par value — — Common stock; no par value
346,535 346,535 Retained earnings 302,242 261,626 Cost of common
stock in treasury (43,711 ) (29,364 ) Accumulated other
comprehensive income 9,407 6,581
Total
shareholders' equity 614,473 585,378
Total liabilities and shareholders' equity $ 4,829,958
$ 4,722,826
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited - Dollars in
thousands)
Three Months Ended December
31, Twelve Months Ended December 31, 2014
2013 2014 2013 Interest income:
Loans and leases $ 40,781 $ 39,463 $ 161,215 $
161,137 Investment securities, taxable 3,346 3,640 13,054 14,414
Investment securities, tax-exempt 803 799 3,269 3,094 Other 266
228 1,016 940
Total
interest income 45,196 44,130 178,554 179,585 Interest
expense: Deposits 2,626 3,561 11,356 16,604 Short-term borrowings
101 62 541 211 Subordinated notes 1,055 1,055 4,220 4,220 Long-term
debt and mandatorily redeemable securities 575 418
2,108 1,733
Total interest
expense 4,357 5,096 18,225
22,768
Net interest income 40,839 39,034
160,329 156,817 (Recovery of) provision for loan and lease losses
(820 ) (859 ) 3,733 772
Net interest
income after provision for loan and lease losses 41,659 39,893
156,596 156,045 Noninterest income: Trust fees 4,581 3,583
18,511 17,383 Service charges on deposit accounts 2,186 2,249 8,684
9,177 Debit card income 2,508 2,130 9,585 8,882 Mortgage banking
income 1,420 1,277 5,381 5,944 Insurance commissions 1,388 1,361
5,556 5,492 Equipment rental income 4,615 4,131 17,156 16,229 Gains
(losses) on investment securities available-for-sale — (140 ) 963
(168 ) Other income 3,178 3,394 12,051
14,273
Total noninterest income 19,876
17,985 77,887 77,212
Noninterest expense: Salaries and employee benefits 21,389 20,230
80,488 79,783 Net occupancy expense 2,387 2,220 9,311 8,700
Furniture and equipment expense 4,592 4,610 17,657 16,895
Depreciation - leased equipment 3,783 3,310 13,893 13,055
Professional fees 1,698 1,478 5,046 5,321 Supplies and
communication 1,436 1,325 5,589 5,690 FDIC and other insurance 814
783 3,384 3,462 Business development and marketing expense 2,248
1,927 6,049 4,938 Loan and lease collection and repossession
expense 962 648 1,102 4,030 Other expense 2,682 2,059
7,521 7,440
Total noninterest
expense 41,991 38,590 150,040
149,314 Income before income taxes 19,544
19,288 84,443 83,943 Income tax expense 4,548 5,572
26,374 28,985
Net income
$ 14,996 $ 13,716 $ 58,069 $
54,958
The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP
#336901 10 3)Please contact us at shareholder@1stsource.com
1st Source CorporationAndrea Short, 574-235-2000
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