First Quarter Earnings Steady at 1st Source Corporation, Cash Dividend Declared
South Bend, IN - 1st Source Corporation (NASDAQ:
SRCE), parent company of 1st Source Bank, today reported net income of $13.82
million for the first quarter of 2016, an increase of 2.27% compared to $13.51
million reported in the first quarter a year ago. Diluted net income per common
share for the first quarter of 2016 was $0.53, up 3.92% over the $0.51 in the
first quarter of 2015. (The March 31, 2015 share and per share information has
been adjusted for a 10% stock dividend declared on July 22, 2015 and issued on
August 14, 2015, unless otherwise noted.)
At its April 2016 meeting, the Board of
Directors approved a cash dividend of $0.18 per common share. The cash dividend
is payable to shareholders of record on May 3, 2016 and will be paid on May 13,
2016.
According to Christopher J. Murphy III,
Chairman, “In spite of the challenging low interest rate environment, we saw an
increase in net income over the prior year and turned in a steady performance
in the first quarter. Credit quality remains strong and we have seen little
increase in delinquencies or problem credits, even as issues with the energy
sector affect a small portion of our construction machinery clients. While
credit quality remains good we know that we are at the far reaches of a
sustained weak economic period and continue to work hard to position ourselves
properly for any downturn in the domestic economy.”
“During the quarter, we began renovating
our banking centers in Bluffton and Huntington, Indiana. We also upgraded our
mobile banking to offer greater convenience and enhance the client experience.
It has been our long-term strategy to continue to invest in our branches and in
technology. We have seen good client growth in many areas as a result of this
focus. As always, we remain committed to our mission of helping our clients
achieve security, build wealth and realize their dreams.” Mr. Murphy concluded.
HIGHLIGHTS
- Average loans and leases grew $334.35 million or 9.10% from the first quarter of 2015.
- Average deposits grew $336.32 million or 8.81% from the first quarter of 2015.
- Net interest income on a tax-equivalent basis of $41.75 million increased $1.90 million or 4.76% from the first quarter of 2015.
- Noninterest income of $21.63 million increased $1.88 million or 9.50% from the first quarter of 2015 (6.01% excluding equipment rental income).
- Noninterest expenses of $40.71 million increased $2.64 million or 6.95% from the first quarter of 2015 (4.80% excluding leased equipment depreciation).
- During the first quarter of 2016, the Company repurchased $8.01 million, or approximately 270,000 shares, of common stock at an average cost of $29.69 per share.
FIRST QUARTER 2016 FINANCIAL RESULTS
Loans
Average
loans and leases of $4.01 billion increased $334.35 million, or 9.10% from the
year ago quarter and have increased $48.97 million, or 1.24% from the fourth
quarter.
Deposits
Net Interest Income and Net Interest Margin
First
quarter tax-equivalent net interest income of $41.75 million increased $1.90
million, or 4.76% from the quarter a year ago and was down $1.92 million, or
4.39% from the fourth quarter. First quarter net interest recoveries were down
$0.06 million from the year ago quarter and have decreased $1.66 million
relative to the fourth quarter.
First
quarter net interest margin was 3.45%, a decrease of 13 basis points from the
3.58% for the same period in 2015 and a decrease of 16 basis points from the
3.61% reported in the fourth quarter.
Noninterest Income and Expense
Noninterest
income for the first quarter was $21.63 million, up $1.88 million, or 9.50%
from the year ago quarter, and up $0.73 million, or 3.47% from the fourth
quarter. Noninterest income increased from the same quarter a year ago mainly
as a result of higher equipment rental income, gains on partnership investments
and increased insurance commissions offset by lower mortgage banking income.
Noninterest income increased from the fourth quarter primarily as a result of
gains on partnership investments and higher insurance commissions offset by
lower service charges on deposit accounts due to reduced volumes of nonsufficient
fund transactions.
Noninterest
expense for the quarter ended March 31, 2016 was $40.71 million, up $2.64
million or 6.95% as compared to the first quarter of 2015 and down $1.04
million, or 2.49% from the fourth quarter. Noninterest expense increased from
the comparable quarter a year ago mainly due to higher depreciation on leased
equipment, furniture and equipment expense, salaries and employee benefits and
professional fees. Depreciation on leased equipment was higher as a result of
an increase in the average equipment rental portfolio. Salaries increased due
to more full-time equivalent employees as a result of opening a new banking
center in 2015, filling other open positions and normal performance raises.
Employee benefits decreased as a result of lower health insurance claims
experience. Professional fees increased due to higher legal fees and increased
utilization of consulting services offset by lower audit fees. Noninterest
expense decreased from the fourth quarter primarily as a result of reduced
salaries and employee benefits due to lower group insurance costs.
Credit
Capital
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 80
community banking centers in 17 counties, 8 trust and wealth management
locations, 10 1st Source Insurance offices, as well as 22 specialty finance
locations nationwide.
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
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.
Media contact: Andrea Short, (574) 235-2000
###