1st Source Corporation (NASDAQ:SRCE), parent company of 1st
Source Bank, today reported net income of $15.63 million for the
second quarter of 2015, up 7.84% over the $14.49 million earned in
the second quarter of 2014. Year to date, net income was $29.14
million, up 3.61% compared to the first six months of last year.
Diluted net income per common share for the second quarter amounted
to $0.59, up 9.26% compared to the $0.54 in the second quarter of
2014. Diluted net income per common share for the first half of
2015 was $1.10, an increase of 5.77% compared to the $1.04 earned a
year earlier. (All share and per share information has been
adjusted for a 10% stock dividend declared on July 22, 2015, unless
otherwise noted.)
At its July 2015 meeting, the Board of Directors approved a cash
dividend of $0.18 per common share (unadjusted). The cash dividend
is payable to shareholders of record on August 4, 2015. The Board
also approved a ten percent (10%) stock dividend of 1st Source
common stock. The stock dividend is payable to shareholders of
record on August 5, 2015. Both the cash and the stock dividend will
be paid on August 14, 2015.
According to Christopher J. Murphy, III, Chairman, "It was a
solid quarter for 1st Source as we achieved record quarterly net
income of $15.63 million, up 7.84% from one year ago. Credit
quality continues to be strong with nonperforming assets reduced by
47.14% to $21.72 million from $41.09 million a year ago and we saw
steady growth in loans and deposits. The quarter also benefited
from net interest recoveries. We look forward to the remainder of
2015 as the economy continues to improve."
"This quarter we opened our 81st banking center in a high
traffic area of Elkhart, Indiana, and we started construction on a
new banking center in the heart of downtown New Haven, Indiana.
Additionally, next week we will open a location in Portage,
Michigan, our second banking center in the greater Kalamazoo,
Michigan market. We continue to add new clients every day by
staying true to our mission of helping our clients achieve
security, build wealth and realize their dreams and by giving
straight talk and sound advice, keeping their best interests in
mind for the long term."
The net interest margin was 3.64% for the second quarter of 2015
versus 3.59% for the same period in 2014. The net interest margin
was 3.61% for the six months ended June 30, 2015, versus 3.59% for
the same period in 2014. Tax-equivalent net interest income was
$42.07 million for the second quarter of 2015, compared to the
$40.62 million from 2014’s second quarter. For the first six months
of 2015, tax equivalent net interest income was $81.93 million,
compared to $79.71 million for the first six months of 2014.
The reserve for loan and lease losses as of June 30, 2015 was
2.25% of total loans and leases compared to 2.38% at June 30, 2014.
Net recoveries of $0.68 million were recorded for the second
quarter of 2015 compared with net recoveries of $1.22 million in
the same quarter a year ago. Year to date, net recoveries of $0.35
million have been recorded in 2015, compared to net recoveries of
$1.92 million for the first half of 2014. The provision for loan
and lease losses was $0.81 million for the second quarter of 2015,
compared with $2.54 million for the same period in 2014. For the
first six months of 2015, the provision for loan and lease losses
was $1.17 million compared with $3.35 million for the first six
months of 2014. The ratio of nonperforming assets to net loans and
leases improved to 0.55% as of June 30, 2015, compared to 1.08% on
June 30, 2014.
Total assets at the end of the second quarter of 2015 were $5.01
billion, up 1.79% from the $4.93 billion a year ago. Total loans
and leases were $3.85 billion, up 3.47% from June 30, 2014. Total
deposits were $3.96 billion, up 3.85% from the comparable figure at
June 30, 2014. As of June 30, 2015, the common equity-to-assets
ratio was 12.60%, compared to 12.06% a year ago and the tangible
common equity-to-tangible assets ratio was 11.09% compared to
10.50% a year earlier.
Noninterest income for the second quarter of 2015 was $21.53
million, an increase of 12.02% from the same period in 2014. For
the first six months of 2015, noninterest income was $41.28
million, up 6.90% compared to 2014. Noninterest income increased
primarily as a result of increased equipment rental income and
trust fees.
Noninterest expense was $38.24 million for the second quarter of
2015, up 11.09% from the second quarter of 2014. For the six months
ended June 30, 2015, noninterest expense was $76.30 million, up
8.39% compared with $70.40 million for the same period in 2014.
Noninterest expense increased primarily as a result of higher
salary expense, group insurance costs and depreciation on leased
equipment.
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, and
construction equipment. The Corporation includes 81 community
banking centers in 17 counties, 8 trust and wealth management
locations, 8 1st Source Insurance offices, as well as 22 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 2nd QUARTER 2015
FINANCIAL HIGHLIGHTS (Unaudited - Dollars in thousands, except
per share data)
Three Months Ended Six Months
Ended June 30, June 30, 2015 2014
2015 2014 END OF PERIOD BALANCES Assets $
5,014,023 $ 4,925,727 Loans and leases 3,852,699 3,723,535 Deposits
3,962,585 3,815,735 Reserve for loan and lease losses 86,588 88,776
Intangible assets 84,967 85,796 Common shareholders’ equity 631,631
594,218
AVERAGE BALANCES Assets $ 4,956,246 $
4,831,313 $ 4,888,724 $ 4,765,107 Earning assets 4,634,091
4,539,093 4,573,117 4,477,086 Investments 791,569 835,755 790,073
833,688 Loans and leases 3,800,120 3,662,156 3,737,449 3,603,016
Deposits 3,927,077 3,764,043 3,872,320 3,717,259 Interest bearing
liabilities 3,450,830 3,451,752 3,407,965 3,396,660 Common
shareholders’ equity 632,300 599,292 627,873 597,002
INCOME STATEMENT DATA Net interest income $ 41,665 $ 40,162
$ 81,101 $ 78,780 Net interest income - FTE 42,072 40,622 81,926
79,709 Provision for loan and lease losses 811 2,543 1,168 3,347
Noninterest income 21,531 19,221 41,282 38,619 Noninterest expense
38,241 34,424 76,302 70,396 Net income 15,630 14,494 29,141 28,126
PER SHARE DATA* Basic net income per common share $
0.59 $ 0.54 $ 1.10 $ 1.04 Diluted net income per common share 0.59
0.54 1.10 1.04 Common cash dividends declared 0.164 0.164 0.327
0.318 Book value per common share 24.11 22.63 24.11 22.63 Tangible
book value per common share 20.87 19.36 20.87 19.36 Market value -
High 31.75 30.19 31.75 30.19 Market value - Low 27.69 26.15 26.95
25.05 Basic weighted average common shares outstanding 26,212,999
26,485,789 26,235,511 26,616,762 Diluted weighted average common
shares outstanding 26,212,999 26,485,789 26,235,511 26,616,762
KEY RATIOS Return on average assets 1.26 % 1.20 %
1.20 % 1.19 % Return on average common shareholders’ equity 9.91
9.70 9.36 9.50 Average common shareholders’ equity to average
assets 12.76 12.40 12.84 12.53 End of period tangible common equity
to tangible assets 11.09 10.50 11.09 10.50 Risk-based capital -
Common Equity Tier 1 12.72 N/A 12.72 N/A Risk-based capital - Tier
1 14.05 13.97 14.05 13.97 Risk-based capital - Total 15.36 15.28
15.36 15.28 Net interest margin 3.64 3.59 3.61 3.59 Efficiency:
expense to revenue 57.74 55.59 59.85 57.01 Net charge offs to
average loans and leases (0.07 ) (0.13 ) (0.02 ) (0.11 ) Loan and
lease loss reserve to loans and leases 2.25 2.38 2.25 2.38
Nonperforming assets to loans and leases 0.55 1.08 0.55 1.08
ASSET QUALITY Loans and leases past due 90 days or more $
278 $ 475 Nonaccrual loans and leases 15,082 32,486 Other real
estate 301 1,853 Former bank premises held for sale 626 801
Repossessions 5,433 5,455 Equipment owned under operating leases —
23 Total nonperforming assets $ 21,720
$ 41,093 *Per share figures have been adjusted
for 10% stock dividend declared July 22, 2015.
1st SOURCE CORPORATION CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION (Unaudited - Dollars in thousands)
June 30, 2015 June 30, 2014
ASSETS
Cash and due from banks $ 66,302 $ 110,933 Federal funds sold and
interest bearing deposits with other banks 11,396 6,445 Investment
securities available-for-sale (amortized cost of $773,195 and
$798,708 at
June 30, 2015 and 2014, respectively)
786,471 815,056 Other investments 20,743 23,597 Trading account
securities 211 198 Mortgages held for sale 14,782 19,034
Loans and leases, net of unearned discount: Commercial and
agricultural 719,972 720,226 Auto and light truck 446,731 471,080
Medium and heavy duty truck 250,045 243,358 Aircraft financing
751,665 733,194 Construction equipment financing 445,479 369,755
Commercial real estate 641,205 602,321 Residential real estate
454,730 454,845 Consumer 142,872 128,756
Total
loans and leases 3,852,699 3,723,535 Reserve for loan and lease
losses (86,588 ) (88,776 )
Net loans and leases 3,766,111
3,634,759 Equipment owned under operating leases, net 93,875
63,350 Net premises and equipment 50,931 45,840 Goodwill and
intangible assets 84,967 85,796 Accrued income and other assets
118,234 120,719
Total assets $
5,014,023 $ 4,925,727
LIABILITIES
Deposits: Noninterest bearing $ 857,079 $ 768,710 Interest bearing
3,105,506 3,047,025
Total deposits 3,962,585
3,815,735 Short-term borrowings: Federal funds purchased and
securities sold under agreements to repurchase 122,658 191,545
Other short-term borrowings 139,529 158,457
Total
short-term borrowings 262,187 350,002 Long-term debt and
mandatorily redeemable securities 57,488 59,726 Subordinated notes
58,764 58,764 Accrued expenses and other liabilities 41,368
47,282
Total liabilities 4,382,392 4,331,509
SHAREHOLDERS’
EQUITY
Preferred stock; no par value — — Common stock; no par value*
436,538 346,535 Retained earnings* 232,507 280,917 Cost of common
stock in treasury (45,706 ) (43,445 ) Accumulated other
comprehensive income 8,292 10,211
Total
shareholders’ equity 631,631 594,218
Total liabilities and shareholders’ equity $ 5,014,023
$ 4,925,727 *June 30, 2015 common stock and
retained earnings gives retrospective recognition to a 10% stock
dividend declared July 22, 2015.
1st SOURCE CORPORATION CONSOLIDATED STATEMENTS OF
INCOME (Unaudited - Dollars in thousands)
Three
Months Ended Six Months Ended June 30, June
30, 2015 2014 2015
2014 Interest income: Loans and leases $ 42,583 $ 40,401 $
82,187 $ 79,316 Investment securities, taxable 2,648 3,401 5,652
6,746 Investment securities, tax-exempt 754 816 1,523 1,635 Other
229 232 484 509
Total
interest income 46,214 44,850 89,846 88,206 Interest
expense: Deposits 2,838 2,994 5,397 5,965 Short-term borrowings 131
169 234 306 Subordinated notes 1,055 1,055 2,110 2,110 Long-term
debt and mandatorily redeemable securities 525 470
1,004 1,045
Total interest
expense 4,549 4,688 8,745
9,426
Net interest income 41,665 40,162 81,101
78,780 Provision for loan and lease losses 811 2,543
1,168 3,347
Net interest income
after provision for loan and lease losses 40,854 37,619 79,933
75,433 Noninterest income: Trust fees 5,247 4,955 9,804
9,431 Service charges on deposit accounts 2,367 2,207 4,564 4,273
Debit card income 2,628 2,463 5,027 4,695 Mortgage banking income
1,239 1,181 2,490 2,515 Insurance commissions 1,382 1,288 2,687
2,851 Equipment rental income 5,342 4,098 10,421 8,180 Gains on
investment securities available-for-sale 4 — 4 963 Other income
3,322 3,029 6,285 5,711
Total noninterest income 21,531 19,221
41,282 38,619 Noninterest expense:
Salaries and employee benefits 20,794 18,827 41,719 38,309 Net
occupancy expense 2,345 2,235 4,806 4,672 Furniture and equipment
expense 4,531 4,413 8,867 8,650 Depreciation - leased equipment
4,396 3,290 8,484 6,539 Professional fees 1,108 1,062 1,978 2,190
Supplies and communication 1,409 1,337 2,815 2,729 FDIC and other
insurance 847 850 1,696 1,714 Business development and marketing
expense 1,214 899 2,263 2,583 Loan and lease collection and
repossession expense (294 ) (17 ) 69 (512 ) Other expense 1,891
1,528 3,605 3,522
Total noninterest expense 38,241 34,424
76,302 70,396 Income before income
taxes 24,144 22,416 44,913 43,656 Income tax expense 8,514
7,922 15,772 15,530
Net income $ 15,630 $ 14,494 $ 29,141
$ 28,126 The NASDAQ Stock Market
National Market Symbol: "SRCE" (CUSIP #336901 10 3)
Please contact us at
shareholder@1stsource.com
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version on businesswire.com: http://www.businesswire.com/news/home/20150723005820/en/
1st Source CorporationAndrea Short, 574-235-2000
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