Exhibit 99.1
|
| | | |
| For: | Immediate Release | Contact: | Andrea Short |
| | July 21, 2016 | | 574-235-2000 |
1st Source Corporation Announces Second Quarter Earnings,
Cash Dividend Declared
QUARTERLY HIGHLIGHTS
| |
| • | Net income of $14.48 million and diluted net income per common share of $0.56. |
| |
| • | Return on average assets of 1.09% and return on average common shareholders' equity of 8.84%. |
| |
| • | Net recoveries of $0.11 million and nonperforming assets to loans and leases of 0.49%. |
| |
| • | Average loans and leases grew $304.99 million or 8.03% from the second quarter of 2015. |
| |
| • | Average deposits grew $373.33 million or 9.51% from the second quarter of 2015. |
| |
| • | Net interest income on a tax-equivalent basis increased $0.68 million or 1.62% from the second quarter of 2015. |
| |
| • | Noninterest income increased $0.77 million or 3.56% from the second quarter of 2015 (decreased 2.53% excluding equipment rental income). |
| |
| • | Noninterest expenses increased $1.79 million or 4.69% from the second quarter of 2015 (increased 2.20% excluding leased equipment depreciation). |
South Bend, IN - 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported net income of $14.48 million for the second quarter of 2016, compared to $15.63 million reported in the second quarter a year ago bringing the 2016 year-to-date net income to $28.30 million compared to $29.14 million in 2015. The quarterly and year-to-date net income comparisons were negatively impacted by a reduction in net interest recoveries of $1.35 million and $1.41 million, respectively, a higher provision for loan and leases losses of $1.24 million and $1.86 million, respectively, and by the writedown of an available-for-sale equity investment. These negatives were partially offset by gains of $1.02 million and $1.86 million, respectively, on a Volcker Rule required liquidation of a partnership investment.
Diluted net income per common share for the second quarter of 2016 was $0.56, versus $0.59 in the second quarter of 2015. Diluted net income per common share for the first half of 2016 was $1.08, compared to the $1.10 earned a year earlier.
At its July 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 August 2, 2016 and will be paid on August 12, 2016. This brings dividends this year to $0.540 per common share compared to $0.491 per common share at the same time last year.
According to Christopher J. Murphy III, Chairman, “We saw solid growth in loans and leases and deposits again this quarter as we continue to add new clients to the bank. Average loans and leases were up a healthy 8.03% from a year ago and average deposits were strong, up 9.51% from that same period. Given the challenging low interest rate environment, we had a steady performance overall. Just as importantly, credit quality remains positive with net recoveries for the quarter. Net interest margins continue to be negatively impacted by low interest rates and while flat compared to last quarter are down 19 basis points compared to a year ago.”
“We continue to reinvest in our facilities and this quarter completed renovations of our banking centers in Bluffton and Huntington, Indiana, making the Fort Wayne region our first to be fully renovated. We also started construction of a new larger office in the heart of downtown Warsaw, Indiana.” Mr. Murphy concluded.
SECOND QUARTER 2016 FINANCIAL RESULTS
Loans
Average loans and leases of $4.11 billion increased $304.99 million, or 8.03% in the second quarter of 2016 from the year ago quarter and have increased $96.68 million, or 2.41% from the first quarter. Year to date average loans and leases of $4.06 billion increased $319.32 million, or 8.54% from the first six months of 2015.
Deposits
Average deposits of $4.30 billion grew $373.33 million, or 9.51% for the quarter ended June 30, 2016 from the year ago quarter and have increased $147.13 million, or 3.54% compared to the first quarter. Average deposits for the first six months of 2016 were $4.23 billion an increase of $354.52 million or 9.16% from the same period a year ago.
Net Interest Income and Net Interest Margin
Second quarter 2016 tax-equivalent net interest income of $42.75 million increased $0.68 million, or 1.62% from the quarter a year ago and increased $1.00 million, or 2.40% from the first quarter. Second quarter 2016 net interest recoveries were down $1.35 million from the year ago quarter, resulting in an 11 basis point reduction to the net interest margin. Second quarter 2016 net interest recoveries were slightly higher relative to the first quarter.
For the first six months of 2016, tax-equivalent net interest income was $84.50 million, an increase of $2.58 million, or 3.15% compared to the same period a year ago. Net interest recoveries for the first half of 2016 were down $1.41 million from the first half of 2015, resulting in a 6 basis point reduction to the net interest margin.
Second quarter 2016 net interest margin was 3.45%, a decrease of 19 basis points from the 3.64% for the same period in 2015 and remained unchanged from the first quarter.
Net interest margin for the first six months of 2016 was 3.45%, a decrease of 16 basis points from the 3.61% for the same period in 2015.
Noninterest Income
Noninterest income increased $0.77 million or 3.56% and $2.64 million or 6.40% in the three and six month periods ended June 30, 2016, respectively over the same periods a year ago. The increase in noninterest income was mainly due to higher equipment rental income related to an increase in the average equipment rental portfolio and gains on the liquidation of a partnership investment required by the Volcker Rule, which was offset by lower monogram fund income and an other than temporary impairment writedown on an available-for-sale equity security.
Noninterest Expense
Noninterest expense increased $1.79 million or 4.69% and $4.44 million or 5.28% for the three and six months ended June 30, 2016, respectively over the comparable periods a year ago. The increase in noninterest expense was primarily due to higher depreciation on leased equipment and increased loan and lease collection and repossession expenses. Depreciation on leased equipment was higher as a result of an increase in the average equipment rental portfolio. Loan and lease collection and repossession expenses increased mainly due to lower recoveries on repurchased mortgage loans and fewer gains on the sale of other real estate owned.
Credit
The reserve for loan and lease losses as of June 30, 2016 was 2.20% of total loans and leases compared to 2.21% at March 31, 2016 and 2.25% at June 30, 2015. Net recoveries of $0.11 million were recorded for the second quarter of 2016 compared with net recoveries of $0.68 million in the same quarter a year ago. Year to date, net recoveries of $0.32 million have been recorded in 2016, compared to net recoveries of $0.35 million for the first half of 2015.
Due primarily to an increase in loan and lease outstandings and special attention reserves, the provision for loan and lease losses for the second quarter 2016 increased $1.24 million compared with the same period in 2015 and was up $1.07 million from the first quarter. The provision for loan and lease losses for the first six months of 2016 was $3.02 million up $1.86 million from the same period in 2015.
The ratio of nonperforming assets to net loans and leases was 0.49% as of June 30, 2016, down from 0.55% on June 30, 2015 and down from the 0.51% on March 31, 2016.
Capital
As of June 30, 2016, the common equity-to-assets ratio was 12.30%, compared to 12.39% at March 31, 2016 and 12.60% a year ago. The tangible common equity-to-tangible assets ratio was 10.90% at June 30, 2016 and 10.96% at March 31, 2016 compared to 11.09% a year earlier. The Common Equity Tier 1 ratio was 12.20% at June 30, 2016 compared to 12.37% at March 31, 2016 and 12.72% a year ago. During 2016, the Company repurchased $8.01 million of common stock in several open market transactions.
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.
# # #
(charts attached)
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| | | | | | | | | | | | | | | | |
| 1st SOURCE CORPORATION | | | | | | |
| 2nd QUARTER 2016 FINANCIAL HIGHLIGHTS | | | | | | |
| (Unaudited - Dollars in thousands, except per share data) | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | March 31, | June 30, | | June 30, | June 30, |
| | 2016 | 2016 | 2015 | | 2016 | 2015 |
| AVERAGE BALANCES | | | | | | |
| Assets | $ | 5,343,630 |
| $ | 5,209,765 |
| $ | 4,956,246 |
| | $ | 5,276,697 |
| $ | 4,888,724 |
|
| Earning assets | 4,986,635 |
| 4,863,774 |
| 4,634,091 |
| | 4,925,204 |
| 4,573,117 |
|
| Investments | 804,856 |
| 794,849 |
| 791,569 |
| | 799,853 |
| 790,073 |
|
| Loans and leases | 4,105,111 |
| 4,008,435 |
| 3,800,120 |
| | 4,056,772 |
| 3,737,449 |
|
| Deposits | 4,300,402 |
| 4,153,273 |
| 3,927,077 |
| | 4,226,838 |
| 3,872,320 |
|
| Interest bearing liabilities | 3,709,706 |
| 3,607,008 |
| 3,450,830 |
| | 3,658,357 |
| 3,407,965 |
|
| Common shareholders’ equity | 659,092 |
| 649,597 |
| 632,300 |
| | 654,344 |
| 627,873 |
|
| | | | | | | |
| INCOME STATEMENT DATA | | | | | | |
| Net interest income | $ | 42,293 |
| $ | 41,289 |
| $ | 41,665 |
| | $ | 83,582 |
| $ | 81,101 |
|
| Net interest income - FTE | 42,753 |
| 41,750 |
| 42,072 |
| | 84,503 |
| 81,926 |
|
| Provision for loan and lease losses | 2,049 |
| 975 |
| 811 |
| | 3,024 |
| 1,168 |
|
| Noninterest income | 22,297 |
| 21,627 |
| 21,531 |
| | 43,924 |
| 41,282 |
|
| Noninterest expense | 40,034 |
| 40,705 |
| 38,241 |
| | 80,739 |
| 76,302 |
|
| Net income | 14,479 |
| 13,818 |
| 15,630 |
| | 28,297 |
| 29,141 |
|
| | | | | | | |
| PER SHARE DATA* | | | | | | |
| Basic net income per common share | $ | 0.56 |
| $ | 0.53 |
| $ | 0.59 |
| | $ | 1.08 |
| $ | 1.10 |
|
| Diluted net income per common share | 0.56 |
| 0.53 |
| 0.59 |
| | 1.08 |
| 1.10 |
|
| Common cash dividends declared | 0.180 |
| 0.180 |
| 0.164 |
| | 0.360 |
| 0.327 |
|
| Book value per common share | 25.59 |
| 25.14 |
| 24.11 |
| | 25.59 |
| 24.11 |
|
| Tangible book value per common share | 22.32 |
| 21.87 |
| 20.87 |
| | 22.32 |
| 20.87 |
|
| Market value - High | 34.83 |
| 33.50 |
| 31.75 |
| | 34.83 |
| 31.75 |
|
| Market value - Low | 30.32 |
| 27.01 |
| 27.69 |
| | 27.01 |
| 26.95 |
|
| Basic weighted average common shares outstanding | 25,853,537 |
| 25,923,530 |
| 26,212,999 |
| | 25,888,534 |
| 26,235,511 |
|
| Diluted weighted average common shares outstanding | 25,853,537 |
| 25,923,530 |
| 26,212,999 |
| | 25,888,534 |
| 26,235,511 |
|
| | | | | | | |
| KEY RATIOS | | | | | | |
| Return on average assets | 1.09 | % | 1.07 | % | 1.26 | % | | 1.08 | % | 1.20 | % |
| Return on average common shareholders’ equity | 8.84 |
| 8.56 |
| 9.91 |
| | 8.70 |
| 9.36 |
|
| Average common shareholders’ equity to average assets | 12.33 |
| 12.47 |
| 12.76 |
| | 12.40 |
| 12.84 |
|
| End of period tangible common equity to tangible assets | 10.90 |
| 10.96 |
| 11.09 |
| | 10.90 |
| 11.09 |
|
| Risk-based capital - Common Equity Tier 1 | 12.20 |
| 12.37 |
| 12.72 |
| | 12.20 |
| 12.72 |
|
| Risk-based capital - Tier 1 | 13.41 |
| 13.63 |
| 14.05 |
| | 13.41 |
| 14.05 |
|
| Risk-based capital - Total | 14.73 |
| 14.94 |
| 15.36 |
| | 14.73 |
| 15.36 |
|
| Net interest margin | 3.45 |
| 3.45 |
| 3.64 |
| | 3.45 |
| 3.61 |
|
| Efficiency: expense to revenue | 58.76 |
| 62.28 |
| 57.74 |
| | 60.50 |
| 59.85 |
|
| Net charge offs to average loans and leases | (0.01 | ) | (0.02 | ) | (0.07 | ) | | (0.02 | ) | (0.02 | ) |
| Loan and lease loss reserve to loans and leases | 2.20 |
| 2.21 |
| 2.25 |
| | 2.20 |
| 2.25 |
|
| Nonperforming assets to loans and leases | 0.49 |
| 0.51 |
| 0.55 |
| | 0.49 |
| 0.55 |
|
| | | | | | | |
| | June 30, | March 31, | December 31, | | September 30, | June 30, |
| | 2016 | 2016 | 2015 | | 2015 | 2015 |
| END OF PERIOD BALANCES | | | | | | |
| Assets | $ | 5,379,938 |
| $ | 5,245,610 |
| $ | 5,187,916 |
| | $ | 5,105,584 |
| $ | 5,014,023 |
|
| Loans and leases | 4,152,763 |
| 4,031,975 |
| 3,994,692 |
| | 3,955,550 |
| 3,852,699 |
|
| Deposits | 4,325,084 |
| 4,225,148 |
| 4,139,186 |
| | 4,019,156 |
| 3,962,585 |
|
| Reserve for loan and lease losses | 91,458 |
| 89,296 |
| 88,112 |
| | 87,616 |
| 86,588 |
|
| Intangible assets | 84,386 |
| 84,530 |
| 84,676 |
| | 84,822 |
| 84,967 |
|
| Common shareholders’ equity | 661,757 |
| 649,973 |
| 644,053 |
| | 639,221 |
| 631,631 |
|
| | | | | | | |
| ASSET QUALITY | | | | | | |
| Loans and leases past due 90 days or more | $ | 275 |
| $ | 728 |
| $ | 122 |
| | $ | 411 |
| $ | 278 |
|
| Nonaccrual loans and leases | 12,579 |
| 12,982 |
| 12,718 |
| | 18,985 |
| 15,082 |
|
| Other real estate | 452 |
| 330 |
| 736 |
| | 232 |
| 301 |
|
| Former bank premises held for sale | — |
| — |
| — |
| | 515 |
| 626 |
|
| Repossessions | 7,619 |
| 7,201 |
| 6,927 |
| | 6,602 |
| 5,433 |
|
| Equipment owned under operating leases | 107 |
| 113 |
| 121 |
| | 146 |
| — |
|
| Total nonperforming assets | $ | 21,032 |
| $ | 21,354 |
| $ | 20,624 |
| | $ | 26,891 |
| $ | 21,720 |
|
*Three and six months ended June 30, 2015 share and per share figures have been adjusted for a 10% stock dividend declared July 22, 2015 and issued on August 14, 2015.
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| | | | | | | | | | | | | | | |
| 1st SOURCE CORPORATION | | | | | | | |
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | | | | | | | |
| (Unaudited - Dollars in thousands) | | | | | | | |
| | June 30, | | March 31, | | December 31, | | June 30, |
| | 2016 | | 2016 | | 2015 | | 2015 |
| ASSETS | | | | | | | |
| Cash and due from banks | $ | 58,944 |
| | $ | 52,373 |
| | $ | 65,171 |
| | $ | 66,302 |
|
| Federal funds sold and interest bearing deposits with other banks | 14,297 |
| | 32,854 |
| | 14,550 |
| | 11,396 |
|
| Investment securities available-for-sale | 814,258 |
| | 801,950 |
| | 791,727 |
| | 786,471 |
|
| Other investments | 21,973 |
| | 21,973 |
| | 21,973 |
| | 20,743 |
|
| Trading account securities | — |
| | — |
| | — |
| | 211 |
|
| Mortgages held for sale | 15,924 |
| | 11,999 |
| | 9,825 |
| | 14,782 |
|
| Loans and leases, net of unearned discount: | | | | | | | |
| Commercial and agricultural | 759,175 |
| | 749,024 |
| | 744,749 |
| | 719,972 |
|
| Auto and light truck | 457,586 |
| | 428,455 |
| | 425,236 |
| | 446,731 |
|
| Medium and heavy duty truck | 273,674 |
| | 272,917 |
| | 278,254 |
| | 250,045 |
|
| Aircraft | 822,842 |
| | 783,844 |
| | 778,012 |
| | 751,665 |
|
| Construction equipment | 484,354 |
| | 467,782 |
| | 455,565 |
| | 445,479 |
|
| Commercial real estate | 715,932 |
| | 716,610 |
| | 700,268 |
| | 641,205 |
|
| Residential real estate and home equity | 482,979 |
| | 466,450 |
| | 464,129 |
| | 454,730 |
|
| Consumer | 156,221 |
| | 146,893 |
| | 148,479 |
| | 142,872 |
|
| Total loans and leases | 4,152,763 |
| | 4,031,975 |
| | 3,994,692 |
| | 3,852,699 |
|
| Reserve for loan and lease losses | (91,458 | ) | | (89,296 | ) | | (88,112 | ) | | (86,588 | ) |
| Net loans and leases | 4,061,305 |
| | 3,942,679 |
| | 3,906,580 |
| | 3,766,111 |
|
| Equipment owned under operating leases, net | 119,312 |
| | 110,412 |
| | 110,371 |
| | 93,875 |
|
| Net premises and equipment | 54,506 |
| | 54,139 |
| | 53,191 |
| | 50,931 |
|
| Goodwill and intangible assets | 84,386 |
| | 84,530 |
| | 84,676 |
| | 84,967 |
|
| Accrued income and other assets | 135,033 |
| | 132,701 |
| | 129,852 |
| | 118,234 |
|
| Total assets | $ | 5,379,938 |
| | $ | 5,245,610 |
| | $ | 5,187,916 |
| | $ | 5,014,023 |
|
| | | | | | | | |
| LIABILITIES | | | | | | | |
| Deposits: | | | | | | | |
| Noninterest bearing | $ | 944,626 |
| | $ | 926,379 |
| | $ | 902,364 |
| | $ | 857,079 |
|
| Interest-bearing deposits: | | | | | | | |
| Interest-bearing demand | 1,391,823 |
| | 1,307,142 |
| | 1,350,417 |
| | 1,345,269 |
|
| Savings | 779,899 |
| | 783,412 |
| | 745,661 |
| | 726,853 |
|
| Time | 1,208,736 |
| | 1,208,215 |
| | 1,140,744 |
| | 1,033,384 |
|
| Total interest-bearing deposits | 3,380,458 |
| | 3,298,769 |
| | 3,236,822 |
| | 3,105,506 |
|
| Total deposits | 4,325,084 |
| | 4,225,148 |
| | 4,139,186 |
| | 3,962,585 |
|
| Short-term borrowings: | | | | | | | |
| Federal funds purchased and securities sold under agreements to repurchase | 161,826 |
| | 169,820 |
| | 130,662 |
| | 122,658 |
|
| Other short-term borrowings | 44,150 |
| | 12,094 |
| | 102,567 |
| | 139,529 |
|
| Total short-term borrowings | 205,976 |
| | 181,914 |
| | 233,229 |
| | 262,187 |
|
| Long-term debt and mandatorily redeemable securities | 64,738 |
| | 68,837 |
| | 57,379 |
| | 57,488 |
|
| Subordinated notes | 58,764 |
| | 58,764 |
| | 58,764 |
| | 58,764 |
|
| Accrued expenses and other liabilities | 63,620 |
| | 60,974 |
| | 55,305 |
| | 41,368 |
|
| Total liabilities | 4,718,182 |
| | 4,595,637 |
| | 4,543,863 |
| | 4,382,392 |
|
| | | | | | | | |
| SHAREHOLDERS’ EQUITY | | | | | | | |
Preferred stock; no par value Authorized 10,000,000 shares; none issued or outstanding | — |
| | — |
| | — |
| | — |
|
Common stock; no par value Authorized 40,000,000 shares; issued 28,205,674 shares at June 30, 2016, March 31, 2016 and December 31, 2015, respectively and 28,206,076 shares at June 30, 2015* | 436,538 |
| | 436,538 |
| | 436,538 |
| | 436,538 |
|
| Retained earnings* | 270,744 |
| | 260,813 |
| | 251,812 |
| | 232,507 |
|
| Cost of common stock in treasury (2,342,904, 2,356,417, 2,178,090, and 2,009,732 shares at June 30, 2016, March 31, 2016, December 31, 2015, and June 30, 2015, respectively)* | (56,357 | ) | | (56,677 | ) | | (50,852 | ) | | (45,706 | ) |
| Accumulated other comprehensive income | 10,831 |
| | 9,299 |
| | 6,555 |
| | 8,292 |
|
| Total shareholders’ equity | 661,756 |
| | 649,973 |
| | 644,053 |
| | 631,631 |
|
| Total liabilities and shareholders’ equity | $ | 5,379,938 |
| | $ | 5,245,610 |
| | $ | 5,187,916 |
| | $ | 5,014,023 |
|
*June 30, 2015 share data, common stock, and retained earnings gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015.
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| | | | | | | | | | | | | | | | | | | |
| 1st SOURCE CORPORATION | | | | | | | | | |
| CONSOLIDATED STATEMENTS OF INCOME | | | | | | | | | |
| (Unaudited - Dollars in thousands, except per share amounts) | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | | March 31, | | June 30, | | June 30, | | June 30, |
| | 2016 | | 2016 | | 2015 | | 2016 | | 2015 |
| Interest income: | | | | | | | | | |
| Loans and leases | $ | 43,891 |
| | $ | 42,736 |
| | $ | 42,583 |
| | $ | 86,627 |
| | $ | 82,187 |
|
| Investment securities, taxable | 3,040 |
| | 3,080 |
| | 2,648 |
| | 6,120 |
| | 5,652 |
|
| Investment securities, tax-exempt | 697 |
| | 692 |
| | 754 |
| | 1,389 |
| | 1,523 |
|
| Other | 309 |
| | 291 |
| | 229 |
| | 600 |
| | 484 |
|
| Total interest income | 47,937 |
| | 46,799 |
| | 46,214 |
| | 94,736 |
| | 89,846 |
|
| Interest expense: | | | | | | | | | |
| Deposits | 3,790 |
| | 3,771 |
| | 2,838 |
| | 7,561 |
| | 5,397 |
|
| Short-term borrowings | 119 |
| | 161 |
| | 131 |
| | 280 |
| | 234 |
|
| Subordinated notes | 1,055 |
| | 1,055 |
| | 1,055 |
| | 2,110 |
| | 2,110 |
|
| Long-term debt and mandatorily redeemable securities | 680 |
| | 523 |
| | 525 |
| | 1,203 |
| | 1,004 |
|
| Total interest expense | 5,644 |
| | 5,510 |
| | 4,549 |
| | 11,154 |
| | 8,745 |
|
| Net interest income | 42,293 |
| | 41,289 |
| | 41,665 |
| | 83,582 |
| | 81,101 |
|
| Provision for loan and lease losses | 2,049 |
| | 975 |
| | 811 |
| | 3,024 |
| | 1,168 |
|
| Net interest income after provision for loan and lease losses | 40,244 |
| | 40,314 |
| | 40,854 |
| | 80,558 |
| | 79,933 |
|
| Noninterest income: | | | | | | | | | |
| Trust fees | 5,108 |
| | 4,623 |
| | 5,247 |
| | 9,731 |
| | 9,804 |
|
| Service charges on deposit accounts | 2,276 |
| | 2,107 |
| | 2,367 |
| | 4,383 |
| | 4,564 |
|
| Debit card | 2,816 |
| | 2,599 |
| | 2,628 |
| | 5,415 |
| | 5,027 |
|
| Mortgage banking | 1,115 |
| | 1,046 |
| | 1,239 |
| | 2,161 |
| | 2,490 |
|
| Insurance commissions | 1,233 |
| | 1,563 |
| | 1,382 |
| | 2,796 |
| | 2,687 |
|
| Equipment rental | 6,517 |
| | 6,073 |
| | 5,342 |
| | 12,590 |
| | 10,421 |
|
| (Losses) gains on investment securities available-for-sale | (209 | ) | | 10 |
| | 4 |
| | (199 | ) | | 4 |
|
| Other | 3,441 |
| | 3,606 |
| | 3,322 |
| | 7,047 |
| | 6,285 |
|
| Total noninterest income | 22,297 |
| | 21,627 |
| | 21,531 |
| | 43,924 |
| | 41,282 |
|
| Noninterest expense: | | | | | | | | | |
| Salaries and employee benefits | 21,194 |
| | 21,351 |
| | 20,794 |
| | 42,545 |
| | 41,719 |
|
| Net occupancy | 2,307 |
| | 2,501 |
| | 2,345 |
| | 4,808 |
| | 4,806 |
|
| Furniture and equipment | 4,811 |
| | 4,790 |
| | 4,531 |
| | 9,601 |
| | 8,867 |
|
| Depreciation - leased equipment | 5,444 |
| | 5,101 |
| | 4,396 |
| | 10,545 |
| | 8,484 |
|
| Professional fees | 1,190 |
| | 1,219 |
| | 1,108 |
| | 2,409 |
| | 1,978 |
|
| Supplies and communication | 1,374 |
| | 1,508 |
| | 1,409 |
| | 2,882 |
| | 2,815 |
|
| FDIC and other insurance | 911 |
| | 879 |
| | 847 |
| | 1,790 |
| | 1,696 |
|
| Business development and marketing | 1,025 |
| | 980 |
| | 1,214 |
| | 2,005 |
| | 2,263 |
|
| Loan and lease collection and repossession | 385 |
| | 427 |
| | (294 | ) | | 812 |
| | 69 |
|
| Other | 1,393 |
| | 1,949 |
| | 1,891 |
| | 3,342 |
| | 3,605 |
|
| Total noninterest expense | 40,034 |
| | 40,705 |
| | 38,241 |
| | 80,739 |
| | 76,302 |
|
| Income before income taxes | 22,507 |
| | 21,236 |
| | 24,144 |
| | 43,743 |
| | 44,913 |
|
| Income tax expense | 8,028 |
| | 7,418 |
| | 8,514 |
| | 15,446 |
| | 15,772 |
|
| Net income | $ | 14,479 |
| | $ | 13,818 |
| | $ | 15,630 |
| | $ | 28,297 |
| | $ | 29,141 |
|
| Per common share*: | | | | | | | | | |
| Basic net income per common share | $ | 0.56 |
| | $ | 0.53 |
| | $ | 0.59 |
| | $ | 1.08 |
| | $ | 1.10 |
|
| Diluted net income per common share | $ | 0.56 |
| | $ | 0.53 |
| | $ | 0.59 |
| | $ | 1.08 |
| | $ | 1.10 |
|
| Cash dividends | $ | 0.180 |
| | $ | 0.180 |
| | $ | 0.164 |
| | $ | 0.360 |
| | $ | 0.327 |
|
| Basic weighted average common shares outstanding | 25,853,537 |
| | 25,923,530 |
| | 26,212,999 |
| | 25,888,534 |
| | 26,235,511 |
|
| Diluted weighted average common shares outstanding | 25,853,537 |
| | 25,923,530 |
| | 26,212,999 |
| | 25,888,534 |
| | 26,235,511 |
|
*The computation of the three and six months ended June 30, 2015 per common share data and shares outstanding gives retrospective recognition to a 10% stock dividend declared on July 22, 2015 and issued on August 14, 2015.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1st SOURCE CORPORATION | | | | | | | | | | | | | | | | | |
| DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | |
| INTEREST RATES AND INTEREST DIFFERENTIAL | | | | | | | | | | |
| (Unaudited - Dollars in thousands) | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended | | |
| | June 30, 2016 | | March 31, 2016 | | June 30, 2015 |
| | Average Balance | | Interest Income/Expense | | Yield/ Rate | | Average Balance | | Interest Income/Expense | | Yield/ Rate | | Average Balance | | Interest Income/Expense | | Yield/ Rate |
| ASSETS | | | | | | | | | | | | | | | | | |
| Investment securities available-for-sale: | | | | | | | | | | | | | | | | | |
| Taxable | $ | 678,849 |
| | $ | 3,040 |
| | 1.80 | % | | $ | 671,989 |
| | $ | 3,080 |
| | 1.84 | % | | $ | 667,914 |
| | $ | 2,648 |
| | 1.59 | % |
| Tax exempt | 126,007 |
| | 1,012 |
| | 3.23 | % | | 122,860 |
| | 1,013 |
| | 3.32 | % | | 123,655 |
| | 1,111 |
| | 3.60 | % |
| Mortgages held for sale | 11,100 |
| | 110 |
| | 3.99 | % | | 9,137 |
| | 95 |
| | 4.18 | % | | 13,452 |
| | 125 |
| | 3.73 | % |
| Loans and leases, net of unearned discount | 4,105,111 |
| | 43,926 |
| | 4.30 | % | | 4,008,435 |
| | 42,781 |
| | 4.29 | % | | 3,800,120 |
| | 42,508 |
| | 4.49 | % |
| Other investments | 65,568 |
| | 309 |
| | 1.90 | % | | 51,353 |
| | 291 |
| | 2.28 | % | | 28,950 |
| | 229 |
| | 3.17 | % |
| Total earning assets | 4,986,635 |
| | 48,397 |
| | 3.90 | % | | 4,863,774 |
| | 47,260 |
| | 3.91 | % | | 4,634,091 |
| | 46,621 |
| | 4.04 | % |
| Cash and due from banks | 60,786 |
| | | | | | 58,851 |
| | | | |
| | 62,452 |
| | |
| | |
|
| Reserve for loan and lease losses | (90,107 | ) | | | | | | (88,845 | ) | | | | |
| | (86,047 | ) | | |
| | |
|
| Other assets | 386,316 |
| | | | | | 375,985 |
| | | | |
| | 345,750 |
| | |
| | |
|
| Total assets | $ | 5,343,630 |
| | | | | | $ | 5,209,765 |
| | | | |
| | $ | 4,956,246 |
| | |
| | |
|
| | | | | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
| | | | |
| | |
| | |
| | |
|
| Interest-bearing deposits | 3,380,208 |
| | 3,790 |
| | 0.45 | % | | 3,254,262 |
| | 3,771 |
| | 0.47 | % | | 3,096,622 |
| | 2,838 |
| | 0.37 | % |
| Short-term borrowings | 204,828 |
| | 119 |
| | 0.23 | % | | 231,477 |
| | 161 |
| | 0.28 | % | | 238,051 |
| | 131 |
| | 0.22 | % |
| Subordinated notes | 58,764 |
| | 1,055 |
| | 7.22 | % | | 58,764 |
| | 1,055 |
| | 7.22 | % | | 58,764 |
| | 1,055 |
| | 7.20 | % |
| Long-term debt and mandatorily redeemable securities | 65,906 |
| | 680 |
| | 4.15 | % | | 62,505 |
| | 523 |
| | 3.37 | % | | 57,393 |
| | 525 |
| | 3.67 | % |
| Total interest-bearing liabilities | 3,709,706 |
| | 5,644 |
| | 0.61 | % | | 3,607,008 |
| | 5,510 |
| | 0.61 | % | | 3,450,830 |
| | 4,549 |
| | 0.53 | % |
| Noninterest-bearing deposits | 920,194 |
| | |
| | |
| | 899,011 |
| | |
| | |
| | 830,455 |
| | |
| | |
|
| Other liabilities | 54,638 |
| | |
| | |
| | 54,149 |
| | |
| | |
| | 42,661 |
| | |
| | |
|
| Shareholders’ equity | 659,092 |
| | |
| | |
| | 649,597 |
| | |
| | |
| | 632,300 |
| | |
| | |
|
| Total liabilities and shareholders’ equity | $ | 5,343,630 |
| | |
| | |
| | $ | 5,209,765 |
| | |
| | |
| | $ | 4,956,246 |
| | |
| | |
|
| Net interest income | |
| | $ | 42,753 |
| | |
| | |
| | $ | 41,750 |
| | |
| | |
| | $ | 42,072 |
| | |
|
| Net interest margin on a tax equivalent basis | |
| | |
| | 3.45 | % | | |
| | |
| | 3.45 | % | | |
| | |
| | 3.64 | % |
|
| | | | | | | | | | | | | | | | | | | | | |
| 1st SOURCE CORPORATION | | | | | | | | | | | |
| DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| INTEREST RATES AND INTEREST DIFFERENTIAL | | | | | |
| (Unaudited - Dollars in thousands) | | | | | | | | | | | |
| | Six Months Ended |
| | June 30, 2016 | | June 30, 2015 |
| | Average Balance | | Interest Income/Expense | | Yield/ Rate | | Average Balance | | Interest Income/Expense | | Yield/ Rate |
| ASSETS | | | | | | | | | | | |
| Investment securities available-for-sale: | | | | | | | | | | | |
| Taxable | $ | 675,419 |
| | $ | 6,120 |
| | 1.82 | % | | $ | 666,752 |
| | $ | 5,652 |
| | 1.71 | % |
| Tax exempt | 124,434 |
| | 2,025 |
| | 3.27 | % | | 123,321 |
| | 2,245 |
| | 3.67 | % |
| Mortgages held for sale | 10,119 |
| | 205 |
| | 4.07 | % | | 13,231 |
| | 251 |
| | 3.83 | % |
| Loans and leases, net of unearned discount | 4,056,772 |
| | 86,707 |
| | 4.30 | % | | 3,737,449 |
| | 82,039 |
| | 4.43 | % |
| Other investments | 58,460 |
| | 600 |
| | 2.06 | % | | 32,364 |
| | 484 |
| | 3.02 | % |
| Total earning assets | 4,925,204 |
| | 95,657 |
| | 3.91 | % | | 4,573,117 |
| | 90,671 |
| | 4.00 | % |
| Cash and due from banks | 59,818 |
| | | | | | 62,000 |
| | |
| | |
|
| Reserve for loan and lease losses | (89,476 | ) | | | | | | (85,920 | ) | | |
| | |
|
| Other assets | 381,151 |
| | | | | | 339,527 |
| | |
| | |
|
| Total assets | $ | 5,276,697 |
| | | | | | $ | 4,888,724 |
| | |
| | |
|
| | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
| | |
| | |
|
| Interest-bearing deposits | 3,317,235 |
| | 7,561 |
| | 0.46 | % | | 3,063,087 |
| | 5,397 |
| | 0.36 | % |
| Short-term borrowings | 218,153 |
| | 280 |
| | 0.26 | % | | 229,050 |
| | 234 |
| | 0.21 | % |
| Subordinated notes | 58,764 |
| | 2,110 |
| | 7.22 | % | | 58,764 |
| | 2,110 |
| | 7.24 | % |
| Long-term debt and mandatorily redeemable securities | 64,205 |
| | 1,203 |
| | 3.77 | % | | 57,064 |
| | 1,004 |
| | 3.55 | % |
| Total interest-bearing liabilities | 3,658,357 |
| | 11,154 |
| | 0.61 | % | | 3,407,965 |
| | 8,745 |
| | 0.52 | % |
| Noninterest-bearing deposits | 909,603 |
| | |
| | |
| | 809,233 |
| | |
| | |
|
| Other liabilities | 54,393 |
| | |
| | |
| | 43,653 |
| | |
| | |
|
| Shareholders’ equity | 654,344 |
| | |
| | |
| | 627,873 |
| | |
| | |
|
| Total liabilities and shareholders’ equity | $ | 5,276,697 |
| | |
| | |
| | $ | 4,888,724 |
| | |
| | |
|
| Net interest income | |
| | $ | 84,503 |
| | |
| | |
| | $ | 81,926 |
| | |
|
| Net interest margin on a tax equivalent basis | |
| | |
| | 3.45 | % | | |
| | |
| | 3.61 | % |
The NASDAQ Stock Market National Market Symbol: “SRCE” (CUSIP #336901 10 3)
Please contact us at shareholder@1stsource.com
