| | | | | Exhibit 99.1 |
| | | | | |
| | | | | |
| For: | Immediate Release | | Contact: | Larry Lentych |
| | April 26, 2012 | | | Andrea Short |
| | | | | 574 235 2000 |
1ST SOURCE HAS STRONG EARNINGS IN FIRST QUARTER,
South Bend, IN -- 1st Source Corporation (Nasdaq: SRCE), parent company of 1st Source Bank, today reported net income of $11.72 million for the first quarter of 2012, up 10.44% compared to the $10.61 million reported in the first quarter a year ago. Diluted net income per common share for the first quarter of 2012 amounted to $0.48, up 11.63% over the $0.43 for the first quarter of 2011.
At its April 2012 meeting, the Board of Directors approved a first quarter cash dividend of $0.16 per common share. The cash dividend will be payable on May 15, 2012, to shareholders of record as of May 7, 2012.
Christopher J. Murphy III, Chairman and Chief Executive Officer, commented on the first quarter by saying, "It was a good quarter for 1st Source. Our performance was built on the basics - income was up, expenses were down, and loan loss provisions remained about the same. We are starting to see our markets strengthen a bit as our loan portfolios grew 3.12%. Additionally, our net interest margin increased from last quarter and from a year ago. Credit remains a focus as we work through the challenges of the last several years.”
Mr. Murphy continued, “It was also a quarter where we saw several large projects reach fruition – a new business loan system is coming online that streamlines our processes making us more convenient and efficient for the commercial customer, and we have enhanced our online offerings at 1stsource.com so that we can chat – real time – with those who are visiting our website and respond to their needs.”
“Our steady performance is being noticed by others. During the quarter, we were recognized as one of the top 45 banks in the country when we were named to the KBW Honor Roll of Superior Performers over the last decade. We will remain diligent in providing outstanding client service, maintaining pristine credit quality, and exercising rigorous cost control which not only leads to inclusion in these types of acknowledgments, but more importantly, leads to long-term solid financial performance.”
Return on average common shareholders’ equity for 1st Source Corporation was 8.84% compared to 8.73% for the first quarter of 2011, and return on average total assets was 1.08% compared to 0.97% a year ago. As of March 31, 2012, the 1st Source common equity-to-assets ratio was 12.13%, up from 11.12% a year ago and its tangible common equity-to-tangible assets ratio was 10.32% compared to
9.29% a year earlier. Common shareholders’ equity was $531.89 million, up 8.45% from March 31, 2011. At the end of March 2012, total assets were $4.38 billion, down slightly from the $4.41 billion a year ago. Loans and leases increased 3.12% and deposits decreased 2.86% from a year ago.
For the first quarter of 2012, 1st Source provided $2.25 million to the reserve for loan and lease losses compared to $2.20 million for the first quarter of 2011. Net charge-offs were $1.50 million for the first quarter of 2012 compared to $2.91 million for the first quarter of 2011. The reserve for loan and lease losses as of March 31, 2012, was 2.62% of total loans and leases compared to 2.82% a year earlier. The ratio of nonperforming assets to net loans and leases was 2.19% on March 31, 2012, compared to 2.81% for the same period last year. As of March 31, 2012, nonperforming assets included $1.13 million of former bank premises held for sale.
Tax-equivalent net interest income was $37.92 million for the first quarter of 2012, up 0.95% from 2011's first quarter, and the net interest margin was 3.77% compared to 3.71% in the first quarter of 2011, and 3.66% in the fourth quarter 2011.
Noninterest income for the three-month period ended March 31, 2012 was $20.52 million, an increase of 8.28% as compared to the first quarter of 2011. Noninterest income increased primarily due to higher mortgage banking income. During the first quarter of 2012, residential mortgage loan production volume was $73.54 million compared to $38.85 million in the first quarter of 2011.
Noninterest expense for the three-month period ended March 31, 2012 was $38.05 million, a decrease of 1.11% as compared to the first quarter of 2011. Noninterest expense decreased as a result of reduced depreciation on leased equipment and lower FDIC insurance premiums. These decreases were offset by higher salary and employee benefit expenses and increased professional fees.
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, 8 trust and wealth management locations, and 8 1st Source Insurance offices located within 17 counties of northern Indiana and southwestern Michigan and 23 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.
# # #
| | | | | | |
| 1st QUARTER 2012 FINANCIAL HIGHLIGHTS | | | | | | |
| (Unaudited - Dollars in thousands, except per share data) | | | | | | |
| | | Three Months Ended March 31, |
| |
| | | 2012 | | 2011 |
| END OF PERIOD BALANCES | | | | | | |
| Assets | | $ | 4,384,696 | | | $ | 4,412,376 | |
| Loans and leases | | | 3,146,890 | | | | 3,051,718 | |
| Deposits | | | 3,505,674 | | | | 3,609,007 | |
| Reserve for loan and lease losses | | | 82,394 | | | | 86,160 | |
| Intangible assets | | | 88,475 | | | | 88,650 | |
| Common shareholders' equity | | | 531,891 | | | | 490,467 | |
| | | | | | | | | |
| AVERAGE BALANCES | | | | | | | | |
| Assets | | $ | 4,360,662 | | | $ | 4,420,164 | |
| Earning assets | | | 4,048,830 | | | | 4,108,743 | |
| Investments | | | 889,727 | | | | 956,568 | |
| Loans and leases | | | 3,089,868 | | | | 3,054,013 | |
| Deposits | | | 3,488,893 | | | | 3,600,015 | |
| Interest bearing liabilities | | | 3,177,574 | | | | 3,348,626 | |
| Common shareholders' equity | | | 532,728 | | | | 492,673 | |
| | | | | | | | | |
| INCOME STATEMENT DATA | | | | | | | | |
| Net interest income | | $ | 37,385 | | | $ | 36,860 | |
| Net interest income - FTE | | | 37,923 | | | | 37,566 | |
| Provision for loan and lease losses | | | 2,254 | | | | 2,198 | |
| Noninterest income | | | 20,523 | | | | 18,953 | |
| Noninterest expense | | | 38,048 | | | | 38,476 | |
| Net income | | | 11,715 | | | | 10,608 | |
| | | | | | | | | |
| PER SHARE DATA | | | | | | | | |
| Basic net income per common share | | $ | 0.48 | | | $ | 0.43 | |
| Diluted net income per common share | | | 0.48 | | | | 0.43 | |
| Common cash dividends declared | | | 0.16 | | | | 0.16 | |
| Book value per common share | | | 21.92 | | | | 20.18 | |
| Tangible book value per common share | | | 18.28 | | | | 16.53 | |
| Market value - High | | | 26.79 | | | | 20.90 | |
| Market value - Low | | | 23.54 | | | | 17.86 | |
| Basic weighted average common shares outstanding | | | 24,259,416 | | | | 24,271,366 | |
| Diluted weighted average common shares outstanding | | | 24,270,866 | | | | 24,279,517 | |
| | | | | | | | | |
| KEY RATIOS | | | | | | | | |
| Return on average assets | | | 1.08 | % | | | 0.97 | % |
| Return on average common shareholders' equity | | | 8.84 | | | | 8.73 | |
| Average common shareholders' equity to average assets | | | 12.22 | | | | 11.15 | |
| End of period tangible common equity to tangible assets | | | 10.32 | | | | 9.29 | |
| Risk-based capital - Tier 1 | | | 15.19 | | | | 14.38 | |
| Risk-based capital - Total | | | 16.49 | | | | 15.68 | |
| Net interest margin | | | 3.77 | | | | 3.71 | |
| Efficiency: expense to revenue | | | 64.01 | | | | 66.45 | |
| Net charge-offs to average loans and leases | | | 0.20 | | | | 0.39 | |
| Loan and lease loss reserve to loans and leases | | | 2.62 | | | | 2.82 | |
| Nonperforming assets to loans and leases | | | 2.19 | | | | 2.81 | |
| | | | | | | | | |
| ASSET QUALITY | | | | | | | | |
| Loans and leases past due 90 days or more | | $ | 393 | | | $ | 515 | |
| Nonaccrual loans and leases | | | 55,027 | | | | 74,038 | |
| Other real estate | | | 7,719 | | | | 6,813 | |
| Former bank premises held for sale | | | 1,134 | | | | 1,200 | |
| Repossessions | | | 6,109 | | | | 5,482 | |
| Equipment owned under operating leases | | | 41 | | | | 300 | |
| Total nonperforming assets | | | 70,423 | | | | 88,348 | |
| | | | | |
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | | | | | |
| (Unaudited - Dollars in thousands) | | | | | |
| | March 31, 2012 | | March 31, 2011 |
| ASSETS | | | | | |
| Cash and due from banks | $ | 56,707 | | | $ | 57,271 | |
| Federal funds sold and interest bearing deposits with other banks | | 901 | | | | 81,661 | |
| Investment securities available-for-sale | | | | | | | |
| (amortized cost of $872,783 and $927,522 at | | | | | | | |
| March 31, 2012 and 2011, respectively) | | 901,817 | | | | 942,221 | |
| Other investments | | 18,974 | | | | 20,503 | |
| Trading account securities | | 144 | | | | 146 | |
| Mortgages held for sale | | 18,114 | | | | 5,467 | |
| | | | | | | | |
| Loans and leases, net of unearned discount: | | | | | | | |
| Commercial and agricultural loans | | 545,057 | | | | 547,381 | |
| Auto, light truck and environmental equipment | | 455,873 | | | | 416,957 | |
| Medium and heavy duty truck | | 175,471 | | | | 156,022 | |
| Aircraft financing | | 621,500 | | | | 601,480 | |
| Construction equipment financing | | 271,475 | | | | 271,490 | |
| Commercial real estate | | 539,112 | | | | 578,648 | |
| Residential real estate | | 439,562 | | | | 386,290 | |
| Consumer loans | | 98,840 | | | | 93,450 | |
| Total loans and leases | | 3,146,890 | | | | 3,051,718 | |
| Reserve for loan and lease losses | | (82,394 | ) | | | (86,160 | ) |
| Net loans and leases | | 3,064,496 | | | | 2,965,558 | |
| | | | | | | | |
| Equipment owned under operating leases, net | | 58,840 | | | | 81,304 | |
| Net premises and equipment | | 39,963 | | | | 36,024 | |
| Goodwill and intangible assets | | 88,475 | | | | 88,650 | |
| Accrued income and other assets | | 136,265 | | | | 133,571 | |
| | | | | | | | |
| Total assets | $ | 4,384,696 | | | $ | 4,412,376 | |
| | | | | | | | |
| LIABILITIES | | | | | | | |
| Deposits: | | | | | | | |
| Noninterest bearing | $ | 587,324 | | | $ | 513,315 | |
| Interest bearing | | 2,918,350 | | | | 3,095,692 | |
| Total deposits | | 3,505,674 | | | | 3,609,007 | |
| | | | | | | | |
| Short-term borrowings: | | | | | | | |
| Federal funds purchased and securities sold | | | | | | | |
| under agreements to purchase | | 125,010 | | | | 112,914 | |
| Other short-term borrowings | | 18,761 | | | | 19,239 | |
| Total short-term borrowings | | 143,771 | | | | 132,153 | |
| Long-term debt and mandatorily redeemable securities | | 39,828 | | | | 26,717 | |
| Subordinated notes | | 89,692 | | | | 89,692 | |
| Accrued expenses and other liabilities | | 73,840 | | | | 64,340 | |
| Total liabilities | | 3,852,805 | | | | 3,921,909 | |
| | | | | | | | |
| SHAREHOLDERS' EQUITY | | | | | | | |
| Preferred stock; no par value | | - | | | | - | |
| Common stock; no par value | | 346,535 | | | | 346,535 | |
| Retained earnings | | 198,175 | | | | 164,455 | |
| Cost of common stock in treasury | | (30,757 | ) | | | (29,655 | ) |
| Accumulated other comprehensive income | | 17,938 | | | | 9,132 | |
| Total shareholders' equity | | 531,891 | | | | 490,467 | |
| | | | | | | | |
| Total liabilities and shareholders' equity | $ | 4,384,696 | | | $ | 4,412,376 | |
| 1st SOURCE CORPORATION | | | | | |
| CONSOLIDATED STATEMENTS OF INCOME | | | | | |
| (Unaudited - Dollars in thousands, except per share amounts) | | | | | |
| | Three Months Ended March 31, |
| | 2012 | | 2011 |
| Interest income: | | | | | |
| Loans and leases | $ | 39,896 | | | $ | 41,299 | |
| Investment securities, taxable | | 4,327 | | | | 4,482 | |
| Investment securities, tax-exempt | | 852 | | | | 1,186 | |
| Other | | 226 | | | | 243 | |
| Total interest income | | 45,301 | | | | 47,210 | |
| | | | | | | | |
| Interest expense: | | | | | | | |
| Deposits | | 5,745 | | | | 8,355 | |
| Short-term borrowings | | 53 | | | | 89 | |
| Subordinated notes | | 1,647 | | | | 1,647 | |
| Long-term debt and mandatorily redeemable securities | | 471 | | | | 259 | |
| Total interest expense | | 7,916 | | | | 10,350 | |
| | | | | | | | |
| Net interest income | | 37,385 | | | | 36,860 | |
| Provision for loan and lease losses | | 2,254 | | | | 2,198 | |
| Net interest income after provision for | | | | | | | |
| loan and lease losses | | 35,131 | | | | 34,662 | |
| | | | | | | | |
| Noninterest income: | | | | | | | |
| Trust fees | | 3,973 | | | | 3,992 | |
| Service charges on deposit accounts | | 4,505 | | | | 4,236 | |
| Mortgage banking income | | 1,942 | | | | 444 | |
| Insurance commissions | | 1,357 | | | | 1,142 | |
| Equipment rental income | | 5,350 | | | | 6,038 | |
| Other income | | 3,001 | | | | 2,971 | |
| Investment securities and other investment gains | | 395 | | | | 130 | |
| Total noninterest income | | 20,523 | | | | 18,953 | |
| | | | | | | | |
| Noninterest expense: | | | | | | | |
| Salaries and employee benefits | | 20,316 | | | | 18,638 | |
| Net occupancy expense | | 2,160 | | | | 2,320 | |
| Furniture and equipment expense | | 3,507 | | | | 3,349 | |
| Depreciation - leased equipment | | 4,311 | | | | 4,805 | |
| Professional fees | | 1,398 | | | | 1,096 | |
| Supplies and communication | | 1,393 | | | | 1,394 | |
| FDIC and other insurance | | 949 | | | | 1,676 | |
| Business development and marketing expense | | 867 | | | | 622 | |
| Loan and lease collection and repossession expense | | 1,501 | | | | 1,324 | |
| Other expense | | 1,646 | | | | 3,252 | |
| Total noninterest expense | | 38,048 | | | | 38,476 | |
| | | | | | | | |
| Income before income taxes | | 17,606 | | | | 15,139 | |
| Income tax expense | | 5,891 | | | | 4,531 | |
| | | | | | | | |
| Net income | $ | 11,715 | | | $ | 10,608 | |
| | | | | | | | |
| | | | | | | | |
| The Nasdaq Global Select Market Symbol: "SRCE" (CUSIP #336901 10 3) | | | | | | | |
| Please contact us at shareholder@1stsource.com | | | | | | | |
