South Bend, IN – 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today announced third quarter net income of $13.01 million, an increase of 12.69% over the $11.54 million in the third quarter of 2011. For the first three quarters of the year, net income was $37.29 million versus $37.01 million a year earlier, a 0.74% increase. Diluted net income per common share for the third quarter of 2012 was $0.53 versus $0.47, up 12.77% over the same period in 2011. Diluted net income per common share for the first three quarters was $1.51 in 2012 and 2011.
At the October meeting, the Board of Directors approved a cash dividend of $0.17 per common share, an increase of 6.25% over the third quarter a year ago. The dividend is payable on November 15, 2012 to shareholders of record on November 5, 2012.
Christopher J. Murphy III, Chairman of 1st Source, commented, “It was another good quarter for 1st Source Corporation. From a year ago, our quarterly net income was up 12.7%, we had nice growth in loans and deposits, our nonperforming assets continued to decline, and our net charge-offs were down allowing for a lower provision for loan and lease losses. We are, however, seeing more margin pressure due to the Federal Reserve’s efforts to lower interest rates. The spread between the income on loans and the cost of deposits continues to narrow as deposit rates reach their floors. Also, the government has put enormous pressure on fees and costs.”
“This was also a quarter to grow our market. We broke ground on two new banking centers in Indiana – Nappanee and Columbia City. We enhanced our online banking product making it easier to navigate, adding great features such as purchase rewards and the ability to include outside accounts giving a clearer financial picture for our client. We are upgrading our ATM network with more features and branding elements; and we continue to hone our processes, making them quicker, smoother and more in touch with the client’s point of view. Our client focus is strong - providing distinctive convenience, straight talk and sound advice, always keeping our clients’ best interests in mind,” Mr. Murphy concluded.
As of September 30, 2012, the 1st Source common equity-to-assets ratio was 12.34% compared to 12.00% a year ago and the tangible common equity to tangible assets ratio was 10.59% compared to 10.17% a year earlier. Common shareholders' equity was $553.67 million, up 7.12% from the $516.88 million reported a year ago. Total assets at the end of the third quarter of 2012 were $4.49 billion, up 2 4.23% from a year ago. Total loans and leases were $3.27 billion, up 6.00% from September 30, 2011. Total deposits were $3.57 billion, up 3.51% from the comparable figures at September 30, 2011.
The reserve for loan and lease losses as of September 30, 2012 was 2.55% of total loans and leases compared to 2.73% at September 30, 2011. Net charge-offs were $0.45 million in the third quarter 2012, compared with net charge-offs of $2.06 million in the same quarter a year ago. Year-to-date, net chargeoffs of $3.10 million have been recorded in 2012, compared to net charge-offs of $6.19 million through September 30, 2011. The ratio of nonperforming assets to net loans and leases was 1.51% as of September 30, 2012, down from 2.43% on September 30, 2011.
Noninterest income for the third quarter was $20.31 million, compared to $20.23 million for the same period in 2011. For the nine months, noninterest income was $60.62 million, versus $60.61 million from 2011. Increased mortgage banking income for the third quarter and year-to-date was offset by decreased equipment rental income resulting in relatively flat noninterest income during 2012 as compared to 2011.
Noninterest expense for the third quarter was $37.19 million compared to $37.15 million reported in the third quarter a year earlier. Noninterest expense for the first nine months of 2012 was $111.82 million versus $111.57 million for the same period of 2011. Increased salary and employee benefit expenses were offset by decreased depreciation on leased equipment causing noninterest expense to remain relatively flat during 2012 as compared to 2011.
1st Source serves the northern half of Indiana and southwest Michigan with its community banking, insurance and wealth management services, and nationally and internationally with specialty financing and leasing services. 1st Source distinguishes itself with highly personalized service and a comprehensive range of consumer and commercial banking services delivered through its community bank offices. 1st Source Bank provides services for businesses nationally by offering specialized financing of automobiles for leasing and rental agencies, medium and heavy duty trucks, construction and environmental equipment, and nationally and internationally, for new and used private and cargo aircraft. The Corporation includes 75 community banking centers, 9 trust and wealth management locations, and 8 1st Source Insurance offices located within 17 counties of northern Indiana and southwestern Michigan and 22 specialty finance locations nationwide. With a history dating back to 1863, 1st Source Bank has a tradition of providing superior service to clients while playing a leadership role in assuring a strong social safety net and continued economic development in 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.