1st Source Corporation Announces Third Quarter Income Increase, Dividend Announced
South Bend, IN – 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today announced third quarter net income of $11.54 million, an increase of 3.01% over the $11.20 million in the third quarter 2010. For the first three quarters of the year, net income was $37.01 million versus $28.68 million a year earlier, a 29.07% increase. Diluted net income per common share for the third quarter of 2011 was $0.47 versus $0.39, up 20.51% over the same period in 2010. Diluted net income per common share for the first three quarters was $1.51, an increase of 57.29% compared to $0.96 in 2010.
At the October meeting, the Board of Directors approved a cash dividend of $0.16 per common share, payable on November 14, 2011 to shareholders of record on November 4, 2011.
Christopher J. Murphy III, Chairman of 1st Source, commented, “This was a solid quarter for 1st Source - no fireworks, just a sound performance as we continue to see the economy and our clients in a holding pattern. Our loan and lease loss provision for the third quarter was $1.26 million, up compared to $67,000 last quarter, and down from $5.58 million a year ago. Our nonperforming loans and leases were up slightly, and our third quarter net interest margin dropped a bit from last quarter to 3.66% from 3.72%.”
Mr. Murphy continued, “With the uproar over Wall Street and the investment banks, 1st Source remains a community bank and has stayed true to our clients by always keeping their best interests in mind. Our conservative approach to managing the balance sheet and our business has resulted in our strong earnings. As an example, we never participated in low or no doc mortgages, sub-prime or Alt-A credit that have hurt so many banks across the country and led to the mortgage meltdown. Our goal has always been to provide value to our clients. We strive to be the most convenient place to bank, whether it is in person, online, over the phone, text banking, whatever the client prefers. We provide financial guidance to help our clients get ahead, and keep their best interests in mind with long-term thinking, the right products and services, and no surprises. Very personal, very straightforward, and very convenient. During this long down turn in the economy, we have concentrated on taking care of our clients, and helping them and our communities work through these tough times.”
As of September 30, 2011, the 1st Source common equity-to-assets ratio was 12.00% compared to 10.82% a year ago and the tangible common equity to tangible assets ratio was 10.17% compared to 9.03% a year earlier. Common shareholders' equity was $516.88 million, up 5.40% from the $490.41 million reported a year ago. Total assets at the end of the third quarter of 2011 were $4.31 billion, down 4.99% from a year ago. Total loans and leases were $3.08 billion, relatively flat from a year ago and total deposits were $3.45 billion, down slightly from September 30, 2010.
The 1st Source reserve for loan and lease losses as of September 30, 2011 is 2.73% of total loans and leases compared to 2.88% at September 30, 2010. Net charge-offs are $2.06 million in the third quarter 2011, compared with net charge-offs of $4.08 million in the same quarter a year ago. Year-to-date, net charge-offs of $6.19 million have been recorded in 2011, compared to net charge-offs of $14.49 million through September 30, 2010. The ratio of nonperforming assets to net loans and leases is 2.43% as of September 30, 2011, down from 3.09% on September 30, 2010.
Noninterest income for the third quarter was $20.23 million, down 11.08% from the same period in 2010. For the nine months, noninterest income was $60.61 million, a decrease of 5.71% from 2010. The decrease in noninterest income for the third quarter and year-to-date was primarily due to a reduction in mortgage banking income and equipment rental income.
Noninterest expense for the third quarter was $37.15 million, a 1.75% decrease from the $37.81 million reported in the third quarter a year earlier. Noninterest expense for the first nine months of 2011 was $111.57 million versus $114.57 million for the same period of 2010. The leading factors in the decrease are reduced loan and lease collection and repossession expense, depreciation on leased equipment, and FDIC and other insurance expense.
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, construction and environmental equipment. The Corporation includes 75 community banking centers in 17 counties, 22 specialty finance locations nationwide, 8 trust and wealth management locations, and 7 1st Source Insurance offices. 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 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.
Media Contact: Andrea Short, (574) 235-2000