South Bend, IN - 1st Source Corporation (Nasdaq: SRCE), parent company of 1st Source Bank, today announced net income of $12.40 million for the first quarter of 2013, up 5.88% compared to the $11.72 million reported in the first quarter a year ago. Diluted net income per common share for the first quarter of 2013 amounted to $0.50, up 4.17% over the $0.48 in the first quarter of 2012.
At its April 2013 meeting, the Board of Directors approved a first quarter cash dividend of $0.17 per common share. The cash dividend will be payable on May 15, 2013, to shareholders of record as of May 7, 2013.
Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, “1st Source completed another solid quarter. Our loan and lease portfolio grew at 7.19% while deposits increased 4.99% over a year earlier. Net charge-offs of loans and leases are down substantially, and the ratio of nonperforming assets to net loans and leases continues to drop from a year ago.”
“My colleagues have been quite busy. During the quarter, we held a grand opening for a newly built banking center in Columbia City, Indiana; completed the migration of our core computers to a new data storage facility; and realized a strong three months in consumer and business banking. The economy seems to be turning the corner. Still, the very low rate environment may help borrowers but it hurts savers and investors, and is causing significant margin pressure for us.”
Mr. Murphy continued, “Our solid performance certainly gives us strength over the long term allowing us to continue our record of increased dividends for our shareholders. In January, 1st Source was recognized on the Forbes 2013 Best Banks in America list, coming in at 25 in its annual review of the nation’s 100 largest publicly traded financial institutions. 1st Source ranked 24th in Bank Director Magazine's 'Nifty Fifty' which ranks the top 50 best users of capital among all publicly traded US banks and thrifts based on profitability and capital strength. To achieve these acknowledgements, our focus remains on our clients, providing distinctive convenience, offering straight talk and sound advice, and always keeping their best interests in mind. The better we serve our clients, the better we perform over time.”
Return on average common shareholders’ equity for 1st Source Corporation was 8.90% compared to 8.84% for the first quarter of 2012, and return on average total assets was 1.11% compared to 1.08% a year ago. As of March 31, 2013, the 1st Source common equity-to-assets ratio was 12.47%, up from 12.13% a year ago and its tangible common equity-to-tangible assets ratio was 10.76% compared to 10.32% a year earlier. Common shareholders’ equity was $568.36 million, up 6.86% from March 31, 2012. At the end of March 2013, total assets were $4.56 billion, up 3.95% from the $4.38 billion a year ago. Loans and leases increased 7.19% and deposits increased 4.99% from a year ago.
For the first quarter of 2013, 1st Source provided $0.76 million to the reserve for loan and lease losses compared to $2.25 million in the first quarter of 2012. Net charge-offs were only $60,000 for the first quarter of 2013 compared to $1.50 million for the first quarter of 2012. The reserve for loan and lease losses as of March 31, 2013, was 2.49% of total loans and leases compared to 2.62% a year earlier. The ratio of nonperforming assets to net loans and leases dropped to 1.41% on March 31, 2013, compared to 2.19% for the same period last year. As of March 31, 2013, nonperforming assets included $0.95 million of former bank premises held for sale.
Tax-equivalent net interest income was $38.22 million for the first quarter of 2013, compared to $37.92 million from 2012's first quarter, and the net interest margin was 3.64% compared to 3.77% in the first quarter of 2012, and 3.64% in the fourth quarter 2012.
Noninterest income for the three-month period ended March 31, 2013 was $18.95 million, a decrease of 7.67% as compared to the first quarter of 2012. Noninterest income decreased primarily due to reduced equipment rental income and lower mortgage banking income.
Noninterest expense for the three-month period ended March 31, 2013 was $36.55 million, a decrease of 3.94% as compared to the first quarter of 2012. Noninterest expense decreased as a result of reduced depreciation on leased equipment and lower loan and lease collection and repossession expenses.
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 and some internationally 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 76 community banking centers in 17 counties, 9 trust and wealth management locations, 9 1st Source Insurance offices, as well as 22 specialty finance locations nationwide. Celebrating 150 years, the history of 1st Source dates back to 1863. The Bank has a tradition of providing superior service to clients while playing a leadership role in the continued development of the communities it serves.
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.
1st Source may be accessed on its home page at “www.1stsource.com.” Its 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". 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.