QUARTERLY HIGHLIGHTS
- Net income improved to $19.12 million,
up 17.96% over the first quarter of 2017. Diluted net income per
common share improved to $0.73 from the prior year’s first quarter
of $0.62.
- Return on average assets increased to
1.31% and return on average common shareholders’ equity increased
to 10.67% from 1.21% and 9.61%, respectively in the first quarter
of 2017.
- Net charge-offs (recoveries) of $0.34
million and nonperforming assets to loans and leases of 0.74%
compared to $(0.58) million and 0.63%, respectively in the first
quarter of 2017.
- Average loans and leases grew $401.55
million, up 9.59% from the first quarter of 2017.
- Average deposits grew $409.48 million,
up 9.52% from the first quarter of 2017.
- Net interest income increased $6.81
million, up 15.56% from the first quarter of 2017.
- Noninterest income increased $0.50
million, up 2.15% from the first quarter of 2017 (decreased 1.41%
excluding leased equipment depreciation).
- Noninterest expenses increased $4.44
million or 10.79% from the first quarter of 2017 (increased 10.41%
excluding leased equipment depreciation).
1st Source Corporation (NASDAQ: SRCE), parent company of 1st
Source Bank, today reported a record high net income of $19.12
million for the first quarter of 2018, an improvement of 17.96%
compared to $16.21 million reported in the first quarter a year
ago. Income before taxes was $25.00 million compared to $24.92
million in the first quarter of 2017. The pretax income comparison
was positively impacted by increased net interest income of $6.81
million primarily due to rising lending rates, higher average loan
and lease balances and the recognition of a $0.62 million
unaccreted purchase discount from an early loan payoff. These
positives were offset by a $2.79 million increase in the provision
for loan and lease losses to support loan and lease growth and a
$4.44 million rise in noninterest expense. Non-recurring first
quarter 2018 costs were approximately $1.60 million.
Diluted net income per common share for the first quarter of
2018 was a record high $0.73, versus $0.62 in the first quarter of
2017.
At its April 2018 meeting, the Board of Directors approved a
cash dividend of $0.24 per common share, up 9.09% from $0.22 per
common share in the prior quarter and up 26.32% from the $0.19 per
common share declared a year ago. The cash dividend is payable to
shareholders of record on May 7, 2018 and will be paid on May 15,
2018.
According to Christopher J. Murphy III, Chairman, “1st Source
Corporation had a strong first quarter and crested $6 billion in
asset size. We continue to achieve steady net income and see
healthy growth in loans, leases, and deposits. Credit quality
remains favorable with year-to-date net charge-offs of only
$338,000 or 0.03% of average loans and leases. Average loans and
leases were up a strong 9.59% for the quarter compared to the same
period last year. Average deposits were also up a solid 9.52% from
this time last year. Net interest income has increased 15.56% from
the first quarter 2017, along with noninterest income increasing
2.15%. Noninterest expenses increased 10.79% from the same quarter
of 2017.”
“We have started out 2018 with strong loan growth. As we move
deeper into the year, we will continue our focus on organic, core
deposit growth to support further loan growth,” added Murphy.
“As always, our mission each day is to help our clients achieve
security, build wealth and realize their dreams. We are looking
forward to carrying out this mission for the rest of 2018,” Murphy
concluded.
FIRST QUARTER 2018 FINANCIAL RESULTS
Loans
Average loans and leases of $4.59 billion increased $401.55
million, up 9.59% in the first quarter of 2018 from the year ago
quarter and have increased $141.99 million, up 3.19% from the
fourth quarter of 2017.
Deposits
Average deposits of $4.71 billion grew $409.48 million, up 9.52%
for the quarter ended March 31, 2018 from the year ago quarter
and have increased $22.29 million compared to the fourth quarter of
2017.
Net Interest Income and Net Interest Margin
First quarter 2018 net interest income of $50.53 million
increased $6.81 million, up 15.56% from the first quarter of 2017
and increased $1.72 million, up 3.52% from the fourth quarter of
2017.
First quarter 2018 net interest margin was 3.69%, an improvement
of 20 basis points from the 3.49% for the same period in 2017 and
increased 12 basis points from the fourth quarter. First quarter
2018 net interest margin on a fully tax-equivalent basis was 3.71%,
an increase of 18 basis points from the 3.53% for the same period
in 2017 and increased 10 basis points from the fourth quarter.
Noninterest Income
Noninterest income for the first quarter of 2018 was $23.81
million, up $0.50 million or 2.15% from the year ago quarter, and
down $1.86 million or 7.26% from the fourth quarter. The growth in
noninterest income during the first quarter compared to the same
period a year ago was mainly due to higher equipment rental income
resulting from an increase in the average lease portfolio, improved
debit card income due to growth in those transactions, higher
customer swap fees and increased trust and wealth advisory fees,
which were offset by reduced gains on the sale of
available-for-sale equity securities.
The reduction in noninterest income from the fourth quarter was
primarily the result of lower gains on the sale of
available-for-sale equity securities, decreased equipment rental
income and reduced customer swap fees offset by the receipt of
insurance contingent commissions.
Noninterest Expense
Noninterest expense for the first quarter ended March 31, 2018
was $45.56 million, up $4.44 million or 10.79% over the comparable
period a year ago and down $1.76 million or 3.71% from the fourth
quarter. Excluding depreciation on leased equipment, noninterest
expenses were up $3.69 million or 10.41% from the first quarter a
year ago. The increase in noninterest expense from the same quarter
a year ago was primarily due to higher salary expense as a result
of normal merit increases and a rise in incentive compensation and
higher depreciation on leased equipment as the lease portfolio
grew. In addition, non-recurring first quarter 2018 costs were
approximately $1.60 million due to consulting fees for a customer
relationship management project and information technology projects
of $0.70 million, a repossessed asset valuation adjustment of $0.60
million, and trust losses of $0.30 million.
The reduction in noninterest expense from the fourth quarter of
2017 was mainly due to reduced charitable contributions, a decrease
in provision for unfunded loan commitments, and lower general
collection and repossession expenses offset by increased valuation
adjustments on repossessed assets.
Credit
The reserve for loan and lease losses as of March 31, 2018
was 2.10% of total loans and leases compared to 2.10% at
December 31, 2017 and 2.13% at March 31, 2017. Net
charge-offs of $0.34 million were recorded for the first quarter of
2018 compared with net recoveries of $0.58 million in the same
quarter a year ago and down from the $2.11 million of net
charge-offs in the fourth quarter.
The provision for loan and lease losses for the first quarter of
2018 increased $2.79 million from the same quarter a year ago and
increased slightly from the fourth quarter.
The ratio of nonperforming assets to loans and leases was 0.74%
as of March 31, 2018, compared to the 0.63% on March 31,
2017 and the 0.67% on December 31, 2017.
Capital
As of March 31, 2018, the common equity-to-assets ratio was
11.99%, compared to 12.20% at December 31, 2017 and 12.47% a
year ago. The tangible common equity-to-tangible assets ratio was
10.75% at March 31, 2018 and 10.94% at December 31, 2017
compared to 11.11% a year earlier. The Common Equity Tier 1 ratio,
calculated under banking regulatory guidelines, was 12.22% at
March 31, 2018 compared to 12.35% at December 31, 2017
and 12.69% a year ago.
ABOUT 1ST SOURCE CORPORATION
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 79 banking
centers, 23 1st Source Bank Specialty Finance Group locations
nationwide, eight Wealth Advisory Services locations and ten 1st
Source Insurance offices.
FORWARD LOOKING STATEMENTS
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.
NON-GAAP FINANCIAL MEASURES
The accounting and reporting policies of 1st Source conform to
generally accepted accounting principles (“GAAP”) in the United
States and prevailing practices in the banking industry. However,
certain non-GAAP performance measures are used by management to
evaluate and measure the Company’s performance. Although these
non-GAAP financial measures are frequently used by investors to
evaluate a financial institution, they have limitations as
analytical tools, and should not be considered in isolation, or as
a substitute for analyses of results as reported under GAAP. These
include taxable-equivalent net interest income (including its
individual components), net interest margin (including its
individual components), the efficiency ratio, tangible common
equity-to-tangible assets ratio and tangible book value per common
share. Management believes that these measures provide users of the
Company’s financial information a more meaningful view of the
performance of the interest-earning assets and interest-bearing
liabilities and of the Company’s operating efficiency. Other
financial holding companies may define or calculate these measures
differently.
Management reviews yields on certain asset categories and the
net interest margin of the Company and its banking subsidiaries on
a fully taxable-equivalent (“FTE”) basis. In this non-GAAP
presentation, net interest income is adjusted to reflect tax-exempt
interest income on an equivalent before-tax basis. This measure
ensures comparability of net interest income arising from both
taxable and tax-exempt sources. Net interest income on a FTE basis
is also used in the calculation of the Company’s efficiency ratio.
The efficiency ratio, which is calculated by dividing non-interest
expense by total taxable-equivalent net revenue (less securities
gains or losses and lease depreciation), measures how much it costs
to produce one dollar of revenue. Securities gains or losses and
lease depreciation are excluded from this calculation to better
match revenue from daily operations to operational expenses.
Management considers the tangible common equity-to-tangible assets
ratio and tangible book value per common share as useful
measurements of the Company’s equity.
See the table marked “Reconciliation of Non-GAAP Financial
Measures” for a reconciliation of certain non-GAAP financial
measures used by the Company with their most closely related GAAP
measures.
(charts attached)
1st SOURCE CORPORATION
1st QUARTER 2018 FINANCIAL HIGHLIGHTS (Unaudited - Dollars
in thousands, except per share data)
Three Months Ended
March 31, December 31, March 31,
2018 2017 2017 AVERAGE
BALANCES Assets $ 5,939,574 $ 5,818,837 $ 5,437,247 Earning
assets 5,552,779 5,418,305 5,075,410 Investments 916,979 884,209
839,283 Loans and leases 4,588,782 4,446,794 4,187,231 Deposits
4,708,439 4,686,145 4,298,964 Interest bearing liabilities
4,154,214 3,985,709 3,747,752 Common shareholders’ equity 726,242
719,058 683,647
INCOME STATEMENT DATA Net interest
income $ 50,532 $ 48,814 $ 43,727 Net interest income - FTE(1)
50,744 49,249 44,188 Provision for loan and lease losses 3,786
3,622 1,000 Noninterest income 23,807 25,671 23,307 Noninterest
expense 45,557 47,313 41,119 Net income 19,116 17,994 16,206
PER SHARE DATA Basic net income per common share $ 0.73 $
0.69 $ 0.62 Diluted net income per common share 0.73 0.69 0.62
Common cash dividends declared 0.22 0.20 0.18 Book value per common
share 27.96 27.70 26.46 Tangible book value per common share(1)
24.72 24.47 23.22 Market value - High 54.65 53.29 49.11 Market
value - Low 48.26 47.16 42.15 Basic weighted average common shares
outstanding 25,950,386 25,936,508 25,903,397 Diluted weighted
average common shares outstanding 25,950,386 25,936,508 25,903,397
KEY RATIOS Return on average assets 1.31 % 1.23 %
1.21 % Return on average common shareholders’ equity 10.67 9.93
9.61 Average common shareholders’ equity to average assets 12.23
12.36 12.57 End of period tangible common equity to tangible
assets(1) 10.75 10.94 11.11 Risk-based capital - Common Equity Tier
1(2) 12.22 12.35 12.69 Risk-based capital - Tier 1(2) 13.29 13.44
13.88 Risk-based capital - Total(2) 14.54 14.70 15.18 Net interest
margin 3.69 3.57 3.49 Net interest margin - FTE(1) 3.71 3.61 3.53
Efficiency ratio: expense to revenue 61.28 63.52 61.34 Efficiency
ratio: expense to revenue - adjusted(1) 57.47 60.09 57.81 Net
charge offs (recoveries) to average loans and leases 0.03 0.19
(0.06 ) Loan and lease loss reserve to loans and leases 2.10 2.10
2.13 Nonperforming assets to loans and leases 0.74 0.67 0.63
March 31, December 31, September 30, June
30, March 31, 2018
2017 2017 2017
2017 END OF PERIOD BALANCES Assets $ 6,051,463 $
5,887,284 $ 5,806,735 $ 5,687,230 $ 5,501,526 Loans and leases
4,691,097 4,527,678 4,436,718 4,381,314 4,234,862 Deposits
4,781,325 4,752,730 4,573,712 4,482,036 4,336,976 Reserve for loan
and lease losses 98,331 94,883 93,372 91,914 90,118 Goodwill and
intangible assets 84,124 83,742 83,795 83,848 83,960 Common
shareholders’ equity 725,609 718,537 710,497 699,202 685,934
ASSET QUALITY Loans and leases past due 90 days or more $
123 $ 459 $ 208 $ 178 $ 344 Nonaccrual loans and leases 25,360
19,405 15,066 15,923 18,090 Other real estate 1,184 1,312 1,341 710
916 Repossessions 9,432 10,114 12,913 13,052 8,121 Equipment owned
under operating leases 2 9 14
21 27 Total nonperforming assets
$ 36,101 $ 31,299 $ 29,542
$ 29,884 $ 27,498 (1) See
“Reconciliation of Non-GAAP Financial Measures” for more
information on this performance measure/ratio. (2) Calculated under
banking regulatory guidelines.
1st SOURCE CORPORATION CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION (Unaudited - Dollars in thousands)
March
31, December 31, September 30, March 31,
2018 2017 2017
2017
ASSETS
Cash and due from banks $ 29,404 $ 73,635 $ 64,636 $ 58,429 Federal
funds sold and interest bearing deposits with other banks 21,748
4,398 34,788 33,687 Investment securities available-for-sale
942,076 904,033 893,973 836,682 Other investments 27,265 25,953
25,953 22,458 Mortgages held for sale 8,626 13,123 11,000 8,409
Loans and leases, net of unearned discount: Commercial and
agricultural 1,011,700 929,997 893,174 843,757 Auto and light truck
511,051 496,816 505,126 430,489 Medium and heavy duty truck 280,010
296,935 287,975 290,167 Aircraft 868,419 844,657 816,120 783,523
Construction equipment 619,219 563,437 541,838 512,545 Commercial
real estate 748,926 741,568 740,345 723,623 Residential real estate
and home equity 518,130 526,122 524,071 522,772 Consumer
133,642 128,146 128,069
127,986
Total loans and leases 4,691,097 4,527,678
4,436,718 4,234,862 Reserve for loan and lease losses
(98,331 ) (94,883 ) (93,372 ) (90,118 )
Net
loans and leases 4,592,766 4,432,795 4,343,346 4,144,744
Equipment owned under operating leases, net 144,129 139,581 145,975
127,323 Net premises and equipment 54,841 54,612 53,324 55,167
Goodwill and intangible assets 84,124 83,742 83,795 83,960 Accrued
income and other assets 146,484 155,412
149,945 130,667
Total assets
$ 6,051,463 $ 5,887,284 $
5,806,735 $ 5,501,526
LIABILITIES
Deposits: Noninterest-bearing demand $ 1,030,902 $ 1,064,271 $
1,019,106 $ 966,903 Interest-bearing deposits: Interest-bearing
demand 1,514,299 1,554,898 1,493,187 1,418,395 Savings 855,729
863,588 825,147 839,257 Time 1,380,395
1,269,973 1,236,272 1,112,421
Total interest-bearing deposits 3,750,423
3,688,459 3,554,606 3,370,073
Total deposits 4,781,325
4,752,730 4,573,712 4,336,976
Short-term borrowings: Federal funds purchased and securities sold
under agreements to repurchase 143,913 205,834 148,001 176,079
Other short-term borrowings 212,051 8,761
168,764 103,666
Total
short-term borrowings 355,964 214,595
316,765 279,745 Long-term debt
and mandatorily redeemable securities 71,335 70,060 70,482 85,479
Subordinated notes 58,764 58,764 58,764 58,764 Accrued expenses and
other liabilities 58,466 72,598
76,515 54,628
Total liabilities
5,325,854 5,168,747 5,096,238
4,815,592
SHAREHOLDERS’
EQUITY
Preferred stock; no par value Authorized 10,000,000 shares; none
issued or outstanding — — — — Common stock; no par value Authorized
40,000,000 shares; issued 28,205,674 shares at March 31, 2018,
December 31, 2017, September 30, 2017, and March 31, 2017,
respectively 436,538 436,538 436,538 436,538 Retained earnings
354,608 339,959 327,149 303,009 Cost of common stock in treasury
(2,250,503, 2,268,910, 2,269,544 and 2,282,044 shares at March 31,
2018, December 31, 2017, September 30, 2017, and March 31, 2017,
respectively) (54,602 ) (54,628 ) (54,643 ) (54,940 ) Accumulated
other comprehensive (loss) income (10,935 ) (3,332 )
1,453 1,327
Total shareholders’
equity 725,609 718,537
710,497 685,934
Total liabilities and
shareholders’ equity $ 6,051,463 $
5,887,284 $ 5,806,735 $ 5,501,526
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited - Dollars in
thousands, except per share amounts)
Three Months Ended
March 31, December 31, March 31,
2018 2017 2017 Interest income:
Loans and leases $ 53,691 $ 51,381 $ 44,884 Investment securities,
taxable 4,568 3,761 3,514 Investment securities, tax-exempt 571 585
683 Other 408 458 291
Total
interest income 59,238 56,185
49,372 Interest expense: Deposits 6,562 5,771 3,734
Short-term borrowings 776 220 227 Subordinated notes 883 870 1,055
Long-term debt and mandatorily redeemable securities 485
510 629
Total interest expense
8,706 7,371 5,645
Net
interest income 50,532 48,814 43,727 Provision for loan and
lease losses 3,786 3,622 1,000
Net interest income after provision for loan and lease
losses 46,746 45,192 42,727
Noninterest income: Trust and wealth advisory 5,188 5,315 5,001
Service charges on deposit accounts 2,228 2,393 2,239 Debit card
3,103 3,090 2,750 Mortgage banking 884 1,059 947 Insurance
commissions 1,958 1,383 1,767 Equipment rental 7,755 8,046 6,832
(Losses) gains on investment securities available-for-sale (345 )
1,583 1,285 Other 3,036 2,802
2,486
Total noninterest income 23,807
25,671 23,307 Noninterest expense: Salaries and
employee benefits 22,531 22,839 21,345 Net occupancy 2,866 2,856
2,594 Furniture and equipment 5,455 5,505 4,793 Depreciation –
leased equipment 6,428 6,674 5,680 Professional fees 2,017 2,296
1,077 Supplies and communication 1,553 1,444 1,250 FDIC and other
insurance 698 648 623 Business development and marketing 1,533
3,125 1,652 Loan and lease collection and repossession 951 666 636
Other 1,525 1,260 1,469
Total
noninterest expense 45,557 47,313
41,119 Income before income taxes 24,996 23,550 24,915
Income tax expense 5,880 5,556
8,709
Net income $ 19,116 $ 17,994
$ 16,206 Per common share: Basic net income per
common share $ 0.73 $ 0.69 $
0.62 Diluted net income per common share $ 0.73
$ 0.69 $ 0.62 Cash dividends $ 0.22
$ 0.20 $ 0.18 Basic weighted average
common shares outstanding 25,950,386
25,936,508 25,903,397 Diluted weighted average common
shares outstanding 25,950,386 25,936,508
25,903,397
1st SOURCE CORPORATION
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY
INTEREST RATES AND INTEREST DIFFERENTIAL (Unaudited -
Dollars in thousands)
Three Months Ended March 31,
2018 December 31, 2017 March 31, 2017
Interest Interest Interest Average
Income/ Yield/ Average Income/
Yield/ Average Income/ Yield/
Balance Expense Rate
Balance Expense Rate
Balance Expense Rate
ASSETS
Investment securities available-for-sale: Taxable $ 807,447 $ 4,568
2.29 % $ 764,239 $ 3,761 1.95 % $ 708,249 $ 3,514 2.01 % Tax
exempt(1) 109,532 695 2.57 % 119,970 853 2.82 % 131,034 994 3.08 %
Mortgages held for sale 7,719 80 4.20 % 10,654 107 3.98 % 8,155 81
4.03 % Loans and leases, net of unearned discount(1) 4,588,782
53,699 4.75 % 4,446,794 51,441 4.59 % 4,187,231 44,953 4.35 % Other
investments 39,299 408 4.21 %
76,648 458 2.37 % 40,741
291 2.90 % Total earning assets(1)
5,552,779 59,450 4.34 % 5,418,305 56,620 4.15 % 5,075,410 49,833
3.98 % Cash and due from banks 61,395 64,356 59,967 Reserve for
loan and lease losses (95,707 ) (94,265 ) (90,222 ) Other assets
421,107 430,441
392,092
Total assets $ 5,939,574
$ 5,818,837
$ 5,437,247
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Interest-bearing deposits 3,702,882 6,562 0.72 % 3,644,989 5,771
0.63 % 3,345,670 3,734 0.45 % Short-term borrowings 322,257 776
0.98 % 211,786 220 0.41 % 267,823 227 0.34 % Subordinated notes
58,764 883 6.09 % 58,764 870 5.87 % 58,764 1,055 7.28 % Long-term
debt and mandatorily redeemable securities 70,311
485 2.79 % 70,170 510
2.88 % 75,495 629
3.38 % Total interest-bearing liabilities 4,154,214 8,706 0.85 %
3,985,709 7,371 0.73 % 3,747,752 5,645 0.61 % Noninterest-bearing
deposits 1,005,557 1,041,156 953,294 Other liabilities 53,561
72,914 52,554 Shareholders’ equity 726,242
719,058
683,647 Total
liabilities and shareholders’ equity $ 5,939,574
$ 5,818,837
$ 5,437,247
Less: Fully tax-equivalent adjustments (212 ) (435 ) (461 ) Net
interest income/margin (GAAP-derived)(1) $
50,532 3.69 % $ 48,814
3.57 % $ 43,727 3.49 %
Fully tax-equivalent adjustments 212 435 461 Net interest
income/margin - FTE(1) $ 50,744
3.71 % $ 49,249 3.61 %
$ 44,188 3.53 % (1) See “Reconciliation
of Non-GAAP Financial Measures” for more information on this
performance measure/ratio.
1st SOURCE
CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited - Dollars in thousands, except per share
data)
Three Months Ended March 31, December
31, March 31, 2018
2017 2017
Calculation of
Net Interest Margin
(A) Interest income (GAAP) $ 59,238 $ 56,185 $ 49,372 Fully
tax-equivalent adjustments: (B) – Loans and leases 88 167 150 (C) –
Tax exempt investment securities 124 268
311 (D) Interest income – FTE (A+B+C) 59,450
56,620 49,833 (E) Interest expense (GAAP) 8,706 7,371 5,645 (F) Net
interest income (GAAP) (A-E) 50,532 48,814
43,727 (G) Net interest income - FTE (D-E)
50,744 49,249 44,188 (H)
Annualization factor 4.056 3.967 4.056 (I) Total earning assets $
5,552,779 $ 5,418,305 $ 5,075,410 Net interest margin
(GAAP-derived) (F*H)/I 3.69 % 3.57 % 3.49 % Net interest margin –
FTE (G*H)/I 3.71 % 3.61 % 3.53 %
Calculation of
Efficiency Ratio
(F) Net interest income (GAAP) $ 50,532 $ 48,814 $ 43,727 (G) Net
interest income – FTE 50,744 49,249 44,188 (J) Plus: noninterest
income (GAAP) 23,807 25,671 23,307 (K) Less: gains/losses on
investment securities and partnership investments (32 ) (1,441 )
(1,314 ) (L) Less: depreciation – leased equipment (6,428 )
(6,674 ) (5,680 ) (M) Total net revenue (GAAP) (F+J)
74,339 74,485 67,034 (N)
Total net revenue – adjusted (G+J–K–L) 68,091
66,805 60,501 (O) Noninterest expense (GAAP)
45,557 47,313 41,119 (L) Less:depreciation – leased equipment
(6,428 ) (6,674 ) (5,680 )
(P)
Less: contribution expense limited to gains on investment
securities in (K) — (498 ) (462 ) (Q)
Noninterest expense – adjusted (O–L–P) 39,129 40,141 34,977
Efficiency ratio (GAAP-derived) (O/M) 61.28 % 63.52 % 61.34 %
Efficiency ratio – adjusted (Q/N) 57.47 % 60.09 % 57.81 %
End of Period March 31, December 31, March
31, 2018 2017
2017
Calculation of
Tangible Common Equity-to-Tangible Assets Ratio
(R) Total common shareholders’ equity (GAAP) $ 725,609 $ 718,537 $
685,934 (S) Less: goodwill and intangible assets (84,124 )
(83,742 ) (83,960 ) (T) Total tangible common
shareholders’ equity (R–S) $ 641,485 $ 634,795
$ 601,974 (U) Total assets (GAAP) 6,051,463
5,887,284 5,501,526 (S) Less: goodwill and intangible assets
(84,124 ) (83,742 ) (83,960 ) (V) Total tangible assets (U–S)
$ 5,967,339 $ 5,803,542 $ 5,417,566
Common equity-to-assets ratio (GAAP-derived) (R/U) 11.99 % 12.20 %
12.47 % Tangible common equity-to-tangible assets ratio (T/V) 10.75
% 10.94 % 11.11 %
Calculation of
Tangible Book Value per Common Share
(R) Total common shareholders’ equity (GAAP) $ 725,609 $ 718,537 $
685,934 (W) Actual common shares outstanding 25,955,171
25,936,764 25,923,630 Book value
per common share (GAAP-derived) (R/W)*1000 $ 27.96 $ 27.70 $ 26.46
Tangible common book value per share (T/W)*1000 $ 24.72 $ 24.47 $
23.22 The NASDAQ Stock Market National Market Symbol: “SRCE” (CUSIP
#336901 10 3)
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