South Bend, IN - 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today announced third quarter net income of $14.90 million, an increase of 14.54% over the $13.01 million in the third quarter of 2012. For the first three quarters of the year, net income was $41.24 million versus $37.29 million a year earlier, a 10.61% increase. Diluted net income per common share for the third quarter of 2013 was $0.60 versus $0.53, up 13.21% over the same period in 2012. Diluted net income per common share for the first three quarters was $1.67 in 2013 compared to $1.51, up 10.60% over the previous year.
At the October meeting, the Board of Directors approved a cash dividend of $0.17 per common share. The dividend is payable on November 15, 2013 to shareholders of record on November 5, 2013.
Christopher J. Murphy III, Chairman of 1st Source, commented, “This was an excellent quarter for 1st Source Corporation and I’m pleased we continue to grow organically, one client at a time. The Bank broke ground on a new location in Lafayette, Indiana, our consumer loan area had robust demand although new mortgage production slowed, and our year to date average deposits and loans and leases increased 3.95% and 7.09% respectively.”
“Credit was a major contributor to the strong quarterly financial performance. We saw the direct benefit of operating with strong capital and reserves giving us the capability of working through problems with our customers over the long term. During the quarter we recovered $2.07 million in interest payments and expense recoveries from clients we have been working with for as long as 10 or more years as they restored their businesses to strong operating positions. Our financial strength is an advantage for our clients as it gives us the ability to work with troubled businesses over the long term - helping them return to health, retain jobs, and make the communities we serve stronger. We believe this is another distinct advantage of 1st Source. Our overall credit quality continues to improve, leading to a recovery of loan and lease loss provision for the quarter. Of course, we are ever mindful of the volatility in markets around the world that can have an adverse impact on our clients here, and of the increased pressure on interest rate margins.”
Mr. Murphy continued, “Lastly, I’m quite proud of my colleagues for the recent honor we received. 1st Source Corporation was named to the prestigious Sandler O’Neill Bank and Thrift Sm-All Starts list, a select group of 31 top performing U.S. publicly traded banks and thrifts with a market cap under $2.5 billion. Those honored were evaluated using the criteria of growth, profitability, credit quality and capital strength.”
“We continue to focus on providing outstanding client service and strong credit quality, which allows us to maintain steady and profitable growth.” Mr. Murphy concluded.
As of September 30, 2013, the 1st Source common equity-to-assets ratio was 12.44% compared to 12.34% a year ago and the tangible common equity to tangible assets ratio was 10.77% compared to 10.59% a year earlier. Common shareholders' equity was $578.23 million, up 4.44% from the $553.67 million reported a year ago. Total assets at the end of the third quarter of 2013 were $4.65 billion, up 3.60% from a year ago. Total loans and leases were $3.47 billion, up 6.11% from September 30, 2012. Total deposits were $3.68 billion, up 3.10% from the comparable figures at September 30, 2012.
The reserve for loan and lease losses as of September 30, 2013 was 2.44% of total loans and leases compared to 2.55% at September 30, 2012. Net charge-offs were $0.76 million in the third quarter 2013, compared with net charge-offs of $0.45 million in the same quarter a year ago. Year-to-date, net charge-offs of $0.44 million have been recorded in 2013, compared to net charge-offs of $3.10 million through September 30, 2012. The ratio of nonperforming assets to net loans and leases was 1.14% as of September 30, 2013, compared to 1.51% on September 30, 2012.
Noninterest income for the third quarter was $20.16 million, compared to $20.31 million for the same period in 2012. For the nine months, noninterest income was $59.23 million, versus $60.62 million from 2012.
Noninterest expense for the third quarter was $38.43 million compared to $37.19 million reported in the third quarter a year earlier. Noninterest expense for the first nine months of 2013 was $110.72 million versus $111.82 million for the same period of 2012.
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 76 community banking centers, 9 trust and wealth management locations, and 9 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.