Exhibit 99.1
1st Source Corp. Announces Increased 1st Quarter Earnings, Dividend
Reported
SOUTH BEND, Ind.--(BUSINESS WIRE)--April 30, 2003--1st Source
Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today
reported net income of $4.46 million for the first quarter of 2003, up
5.99 percent compared to the $4.21 million in the first quarter of
2002.
Diluted net income per share of common stock for the first quarter
of 2003 amounted to $0.21 compared with $0.20 for the first quarter of
2002, an increase of 5.0 percent. Return on average common
shareholders' equity for 1st Source Corporation was 5.80 percent
compared to 5.47 percent for the first quarter of 2002, and return on
average total assets was 0.55 percent compared to 0.49 percent a year
ago.
At their April meeting, the Board of Directors approved a first
quarter cash dividend of $0.09 per common share. The cash dividend
will be payable on May 15, 2003, to shareholders of record May 5,
2003, and is equal to the first quarter cash dividend in 2002.
Christopher J. Murphy III, Chairman and Chief Executive Officer,
commented on the first quarter by saying, "Our performance in the
first quarter of 2003 is a slight improvement over last year, and was
managed with no help from the stalled economy. We are pleased that our
credit situation has currently stabilized as our sale of repossessions
increased and our charge-offs decreased. We're hopeful that the
successful conclusion to the war will help stabilize fuel rates and
encourage business to begin investing in new plant and equipment.
Furthermore, fuel price stability should improve the business climate
for our niche areas which supply specialized financing services for
used private and cargo aircraft, automobiles for leasing and rental
agencies, heavy duty trucks, construction and environmental equipment
.... all of which are heavily dependent on gas prices."
"I am most pleased with the strong showing of other areas of the
bank. Our retail branch network continues to increase the number of
customers we serve, as well as gain market share, and remains the
dominant retail financial institution in our area. We've attained
excellent growth in our investments under management, increased the
number of clients we serve in our trust department, and our insurance
and 401(k) management areas are turning in strong performances. All of
this is achieved by meeting the needs of our customers, one customer
at a time," Murphy concluded.
As of March 31, 2003, the common equity-to-assets ratio for 1st
Source was 9.57 percent, up from 8.85 percent a year ago. Common
shareholders' equity was $313.54 million, up 1.78 percent from March
31, 2002. At the end of the first quarter of 2003, total assets were
$3.28 billion, down 5.92 percent from a year ago. Loans and deposits
were down 10.48 percent and 4.48 percent, respectively, from a year
ago.
For the first quarter of 2003, 1st Source's provision for loan
losses was $5.55 million as compared to $11.81 million for the first
quarter of 2002. Net charge-offs were $2.92 million for the first
quarter of 2003 compared to $11.54 million in the first quarter of
2002. The resulting reserve for loan losses as of March 31, 2003 was
2.73 percent of total loans, compared to 2.29 percent as of March 31,
2002. The ratio of nonperforming assets to net loans and leases was
2.97 percent on March 31, 2003 compared to 2.01 percent for the same
period last year.
Tax-equivalent net interest income was $27.31 million for the
first quarter, down 12.85 percent from 2002's first quarter, and the
net interest margin was 3.72 percent versus 4.00 percent in 2002. The
lower margin was due to reduced earning assets and reduced asset
yields, reflecting the effect of fewer loans in our specialty finance
group and lower market interest rates.
Noninterest income for the first quarter 2003 was $20.04 million,
up 7.26 percent from the first quarter of 2002. Loan servicing and
sale income was up as increased mortgage revenue more than offset
decreased securitization income. Insurance commissions and trading
security income also increased in 2003.
Noninterest expense was $34.8 million for the first quarter 2003,
up 7.93 percent from the first quarter of 2002, and down 10.67 percent
from the fourth quarter. These fluctuations are primarily due to the
timing of loan collection and repossession expense. As 1st Source
continues to work through problem loans and liquidate repossessions
primarily in its aircraft and auto financing businesses, expenses in
this area remain higher than one year ago.
1st Source is the largest locally controlled financial institution
headquartered in the Northern Indiana-Southwestern Michigan area.
While delivering a comprehensive range of consumer and commercial
banking services, 1st Source Bank has distinguished itself with highly
personalized services. 1st Source Bank also competes for business
nationally by offering specialized financing services for used private
and cargo aircraft, automobiles for leasing and rental agencies, heavy
duty trucks, construction and environmental equipment. The corporation
includes 60 banking centers in 15 counties, 7 Trustcorp Mortgage
offices in Indiana, Ohio and Michigan, and 26 locations nationwide for
the 1st Source Bank Specialty Finance Group. With a history dating
back to 1863, 1st Source Bank has a tradition of providing superior
service to customers while playing a leadership role in the continued
development of the communities in which it serves.
1st Source may be accessed on its home page at
"www.1stsource.com." Its common stock is traded on the Nasdaq Stock
Market under "SRCE" and appears in the National Market System tables
in many daily newspapers under the code name "1st Src." Marketmakers
in 1st Source common shares are Dain Rauscher, Inc.; Corwell, Weeden &
Co.; FTN Financial Securities Corporation; Goldman, Sachs & Company;
Jefferies & Company, Inc.; Keefe, Bruyette & Woods, Inc.; Merrill
Lynch, Pierce, Fenner; Morgan Stanley & Company, Inc.; NatCity
Investments; Sandler O'Neill & Partners; Schwab Capital Markets;
Stifel, Nicolaus & Company, Incorporated; and William Blair & Company.
A portion of 1st Source's fixed and floating rate cumulative trust
preferred securities are traded on the Nasdaq stock market under the
symbols "SRCEP" and "SRCEO," respectively. The rate on the fixed rate
securities is 9.0 percent and the rate for the first quarter, 2003 on
the floating rate securities is 3.41 percent. Marketmakers in those
securities are Goldman, Sachs & Company; Howe, Barnes Investments,
Inc.; Schwab Capital Markets; and Stifel, Nicolaus & Company,
Incorporated.
Except for historical information contained herein, the matters
discussed in this document express "forward-looking statements."
Generally, the words "believe," "expect," "intend," "estimate,"
"anticipate," "project," "will" 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.
(charts attached)
1st QUARTER 2003 FINANCIAL HIGHLIGHTS
1st Source Corporation and Subsidiaries
(Unaudited - Dollars in thousands except Per Share Data)
Three Months Ended
March 31
2003 2002
------------ ------------
END OF PERIOD BALANCES
Assets $ 3,275,846 $ 3,482,010
Loans 2,263,845 2,529,006
Deposits 2,597,056 2,718,989
Reserve for Loan Losses 61,843 57,892
Intangible Assets 27,691 29,839
Common Shareholders' Equity 313,542 308,066
AVERAGE BALANCES
Assets $ 3,273,880 $ 3,489,319
Earning Assets 2,976,799 3,174,867
Investments 656,181 649,116
Loans 2,277,072 2,520,565
Deposits 2,582,992 2,768,418
Interest Bearing Liabilities 2,516,345 2,781,265
Common Shareholders' Equity 311,818 311,709
INCOME STATEMENT DATA
Net Interest Income $ 26,556 $ 30,541
Net Interest Income - FTE 27,312 31,340
Provision for Loan Losses 5,550 11,809
Noninterest Income 20,039 18,682
Noninterest Expense 34,802 32,245
Net Income 4,460 4,208
PER SHARE DATA
Basic Net Income Per Common Share $ 0.21 $ 0.20
Diluted Net Income Per Common Share 0.21 0.20
Cash Dividends Per Common Share 0.090 0.090
Book Value Per Common Share 14.88 14.71
Market Value -- High 17.520 25.450
Market Value -- Low 12.800 19.750
Basic Weighted Avg.
Common Shares Outstanding 21,000,317 20,867,694
Diluted Weighted Avg.
Common Shares Outstanding 21,331,419 21,242,149
KEY RATIOS
Return on Average Assets 0.55% 0.49%
Return on Average Common
Shareholders' Equity 5.80 5.47
Average Common Shareholders'
Equity to Average Assets 9.52 8.93
End of Period Tangible Common Equity
to Tangible Assets 8.80 8.06
Net Interest Margin 3.72 4.00
Efficiency: Expense to Revenue 69.65 58.83
Net Charge Offs to Average Loans 0.52 1.86
Loan Loss Reserve to Loans 2.73 2.29
Nonperforming Assets to Loans and Leases 2.97 2.01
ASSET QUALITY
Loans Past Due 90 Days or More $ 569 $ 515
Non-accrual Loans 39,297 40,686
Other Real Estate Owned 5,667 4,196
Other Nonperforming Assets 24,297 7,822
Total Nonperforming Assets 69,830 53,219
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
1st Source Corporation and Subsidiaries
(Unaudited - Dollars in thousands)
March 31, March 31,
2003 2002
------------ ------------
ASSETS
Cash and due from banks $ 125,880 $ 64,999
Federal funds sold and interest bearing
deposits with other banks 1,693 621
Investment securities available-for-sale,
at fair value (amortized cost of
$651,935 and $653,750 at March 31, 2003
and 2002, respectively) 659,010 659,011
Trading securities 13,539 0
Loans - net of unearned discount
Commercial and agricultural loans 430,379 466,648
Truck and automobile financing 450,574 392,008
Aircraft financing 295,428 502,577
Construction equipment financing 290,341 343,069
Loans secured by real estate 548,487 582,968
Mortgage held for sale 146,932 120,061
Consumer loans 101,704 121,675
------------ ------------
Total Loans 2,263,845 2,529,006
Reserve for loan losses (61,843) (57,892)
------------ ------------
Net Loans 2,202,002 2,471,114
Equipment owned under operating leases,
net of accumulated depreciation 87,157 113,904
Premises and equipment 40,120 41,481
Other assets 146,445 130,880
------------ ------------
Total Assets $ 3,275,846 $ 3,482,010
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest bearing $ 425,924 $ 332,166
Interest bearing 2,171,132 2,386,823
------------ ------------
Total Deposits 2,597,056 2,718,989
Federal funds purchased and securities
sold under agreements to repurchase 199,538 258,391
Other short-term borrowings 40,327 91,075
Other liabilities 53,243 48,855
Guaranteed junior subordinated debentures 54,750 44,750
Long-term debt 17,390 11,884
------------ ------------
Total Liabilities 2,962,304 3,173,944
Shareholders' equity:
Common stock-no par value 7,578 7,579
Capital surplus 214,001 214,001
Retained earnings 93,123 91,032
Cost of common stock in treasury (5,552) (7,803)
Accumulated other comprehensive income 4,392 3,257
------------ ------------
Total Shareholders' Equity 313,542 308,066
------------ ------------
Total Liabilities and
Shareholders' Equity $ 3,275,846 $ 3,482,010
============ ============
CONSOLIDATED STATEMENTS OF INCOME
1st Source Corporation and Subsidiaries
(Unaudited - Dollars in thousands)
Three Months Ended
March 31
2003 2002
------------ ------------
INTEREST INCOME
Loans, including fees $ 36,610 $ 45,190
Investment securities and other 6,119 7,349
------------ ------------
Total Interest Income 42,729 52,539
INTEREST EXPENSE
Deposits 13,771 19,679
Short-term borrowings 1,264 1,317
Guaranteed preferred beneficial interests
in the Company's subordinated debentures 940 791
Long-term debt 198 211
------------ ------------
Total Interest Expense 16,173 21,998
------------ ------------
Net Interest Income 26,556 30,541
Provision for loan losses 5,550 11,809
------------ ------------
Net Interest Income After
Provision for Loan Losses 21,006 18,732
NONINTEREST INCOME
Trust fees 2,640 2,660
Service charges on deposit accounts 3,724 3,471
Loan servicing and sale income 3,206 2,455
Equipment rental income 6,771 7,280
Other income 3,978 3,304
Investment securities and
other investment losses (280) (488)
------------ ------------
Total Noninterest Income 20,039 18,682
------------ ------------
NONINTEREST EXPENSE
Salaries and employee benefits 17,247 16,578
Net occupancy expense 1,864 1,702
Furniture and equipment expense 2,641 2,729
Depreciation -- leased equipment 5,358 6,147
Supplies and communication 1,511 1,667
Business development and marketing expense 709 600
Other 5,472 2,822
------------ ------------
Total Noninterest Expense 34,802 32,245
------------ ------------
Income Before Income Taxes 6,243 5,169
Income Taxes 1,783 961
------------ ------------
Net Income $ 4,460 $ 4,208
============ ============
The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP
336901 10 3)
Please contact us at shareholder@1stsource.com.
CONTACT: 1st Source Corporation
Larry Lentych, 574/235-2702
Andrea Short, 574/235-2348