QUARTERLY HIGHLIGHTS
- Net income improved to $16.67 million,
15.13% over the second quarter of 2016 and diluted net income per
common share improved to $0.64 from the prior year’s quarter of
$0.56.
- Return on average assets of 1.20% and
return on average common shareholders’ equity of 9.59%.
- Net charge-offs of $0.94 million and
nonperforming assets to loans and leases of 0.66%.
- Average loans and leases grew $203.17
million or 4.95% from the second quarter of 2016.
- Average deposits grew $154.57 million
or 3.59% from the second quarter of 2016.
- Net interest income increased $3.57
million or 8.44% from the second quarter of 2016.
- Noninterest income increased $1.84
million or 8.25% from the second quarter of 2016 (increased 5.86%
excluding leased equipment depreciation).
- Noninterest expenses increased $1.07
million or 2.68% from the second quarter of 2016 (relatively flat
excluding leased equipment depreciation).
1st Source Corporation (NASDAQ: SRCE), parent company of 1st
Source Bank, today reported a record high net income of $16.67
million for the second quarter of 2017, an increase of 15.13%
compared to $14.48 million reported in the second quarter a year
ago, bringing the 2017 year-to-date net income to $32.88 million
compared to $28.30 million in 2016, an increase of 16.18%. The
year-to-date net income comparison was positively impacted by gains
on the sale of investment securities available-for-sale of $1.94
million net of an other than temporary impairment loss of $0.19
million and gains on the sale of fixed assets and leased equipment
of $0.59 million. These increases were partially offset by the
writedown of fixed assets of $0.41 million and a contribution to
the 1st Source Foundation of $0.50 million.
Diluted net income per common share for the second quarter of
2017 was also a record high at $0.64, versus $0.56 in the second
quarter of 2016. Diluted net income per common share for the first
half of 2017 was $1.26 compared to the $1.08 earned a year
earlier.
At its July 2017 meeting, the Board of Directors approved a cash
dividend of $0.19 per common share. The cash dividend is payable to
shareholders of record on August 7, 2017 and will be paid on August
15, 2017. This brings year-to-date dividends in 2017 to $0.56 per
common share, an increase of 3.70% compared to $0.54 per common
share at the same time last year.
According to Christopher J. Murphy III, Chairman, “We are very
pleased with our record net income in the second quarter as 1st
Source Corporation continues to experience healthy growth in loans
and leases and deposits. Credit quality remains stable with
year-to-date net charge-offs of $367,000 or 0.02% of average loans
and leases. Average loans and leases were up a solid 4.95% for the
quarter compared to the same period a year ago. Average deposits
have held steady with a 3.59% increase from this time last year.
Net interest income has increased 8.44% from the second quarter
2016, along with noninterest income increasing 8.25% while
noninterest expense growth was held to a 2.68% increase over the
same quarter of 2016.”
“In April, we announced an exciting partnership with the South
Bend Cubs. 1st Source Bank has a five-year sponsorship of the South
Bend Cubs’ Performance Center located at Four Winds Field. This
collaboration is an investment for the bank intended to produce new
primary relationships and opportunities for growth in our home
market.”
“Moreover, we recently completed the reopening of the North
Calumet banking center on July 17, 2017. This new branch is a
significant rebuild and an enhancement to the client experience and
our service offerings in the Valparaiso market.”
“As always, we will continue to help our clients achieve
security, build wealth and realize their dreams,” Mr. Murphy
concluded.
SECOND QUARTER 2017 FINANCIAL
RESULTS
Loans
Average loans and leases of $4.31 billion increased $203.17
million, or 4.95% in the second quarter of 2017 from the year ago
quarter and have increased $121.05 million from the first quarter.
Year-to-date average loans and leases of $4.25 billion increased
$191.32 million, or 4.72% from the first six months of 2016.
Deposits
Average deposits of $4.45 billion grew $154.57 million, or 3.59%
for the quarter ended June 30, 2017 from the year ago quarter and
have increased $156.01 million, or 3.63% compared to the first
quarter. Average deposits for the first six months of 2017 were
$4.38 billion, an increase of $150.56 million or 3.56% from the
same period a year ago.
Net Interest Income and Net Interest Margin
Second quarter 2017 net interest income of $45.86 million
increased $3.57 million, or 8.44% from the second quarter a year
ago and increased $2.13 million, or 4.88% from the first
quarter.
For the first six months of 2017, tax-equivalent net interest
income was $90.51 million, an increase of $6.00 million, or 7.11%
compared to the same period a year ago.
Second quarter 2017 net interest margin was 3.53%, an
improvement of 12 basis points from the 3.41% for the same period
in 2016 and increased 4 basis points from the 3.49% in the first
quarter. Second quarter 2017 net interest margin on a fully
tax-equivalent basis was 3.57%, an increase of 12 basis points from
the 3.45% for the same period in 2016 and improved 4 basis points
from the 3.53% in the first quarter.
Net interest margin for the first six months of 2017 was 3.51%,
an increase of 10 basis points from the 3.41% for the same period
in 2016. Net interest margin on a fully tax-equivalent basis for
the first six months of 2017 was 3.55%, an increase of 10 basis
points from the 3.45% for the same period in 2016.
Noninterest Income
Noninterest income increased $1.84 million or 8.25% and $3.52
million or 8.01% in the three and six month periods ended June 30,
2017, respectively over the same periods a year ago. The growth in
noninterest income during the second quarter and first six months
of 2017 from the same periods a year ago was mainly due to gains on
the sale of available-for-sale equity securities, higher equipment
rental income related to an increase in the average equipment
rental portfolio and increased trust and wealth advisory fees,
which was offset by reduced partnership gains, resulting from the
liquidation of an investment during 2016, lower mutual fund income
and monogram fund income and decreased customer swap fees. The rise
in noninterest income from the first quarter of 2017 was primarily
a result of higher equipment rental income related to an increase
in the average equipment rental portfolio, increased trust and
wealth advisory fees and an improvement in mortgage banking income
offset by a reduction in gains on the sale of available-for-sale
equity securities and lower insurance contingent commissions.
Noninterest Expense
Noninterest expense increased $1.07 million or 2.68% and $1.49
million or 1.84% for the three and six months ended June 30, 2017,
respectively over the comparable periods a year ago. Excluding
depreciation on leased equipment, noninterest expenses were
relatively flat for the second quarter and first six months of
2017. The increase in noninterest expense from the same quarter a
year ago was primarily due to higher depreciation on leased
equipment, increased professional fees and marketing promotions,
offset by reduced group insurance claims, lower FDIC insurance
assessments and gains on the sale of leased equipment. The increase
in noninterest expense for the first six months of 2017 compared to
the first six months of 2016 was mainly due to higher depreciation
on leased equipment, increased charitable contributions and
marketing promotions, and increased professional fees, offset by
lower FDIC insurance assessments, reduced group insurance claims,
fewer writedowns on fixed assets and gains on the sale of leased
equipment.
Credit
The reserve for loan and lease losses as of June 30, 2017 was
2.10% of total loans and leases compared to 2.13% at March 31, 2017
and 2.20% at June 30, 2016. Net charge-offs of $0.94 million were
recorded for the second quarter of 2017 compared with net
recoveries of $0.11 million in the same quarter a year ago and
$0.58 million of net recoveries in the first quarter. Year-to-date
net charge-offs of $0.37 million have been recorded in 2017,
compared to net recoveries of $0.32 million for the first half of
2016.
The ratio of nonperforming assets to loans and leases was 0.66%
as of June 30, 2017, comparable to the 0.49% on June 30, 2016 and
the 0.63% on March 31, 2017.
Capital
As of June 30, 2017, the common equity-to-assets ratio was
12.29%, compared to 12.47% at March 31, 2017 and 12.30% a year ago.
The tangible common equity-to-tangible assets ratio was 10.98% at
June 30, 2017 and 11.11% at March 31, 2017 compared to 10.90% a
year earlier. The Common Equity Tier 1 ratio, calculated under
banking regulatory guidelines, was 12.43% at June 30, 2017 compared
to 12.69% at March 31, 2017 and 12.20% a year ago.
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 79 banking
centers, 23 1st Source Bank Specialty Finance Group locations
nationwide, eight Wealth Advisory Services locations and ten 1st
Source Insurance offices.
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
The accounting and reporting policies of 1st Source conform to
generally accepted accounting principles (“GAAP”) in the United
States and prevailing practices in the banking industry. However,
certain non-GAAP performance measures are used by management to
evaluate and measure the Company’s performance. Although these
non-GAAP financial measures are frequently used by investors to
evaluate a financial institution, they have limitations as
analytical tools, and should not be considered in isolation, or as
a substitute for analyses of results as reported under GAAP. These
include taxable-equivalent net interest income (including its
individual components), net interest margin (including its
individual components), the efficiency ratio, tangible common
equity-to-tangible assets ratio and tangible book value per common
share. Management believes that these measures provide users of the
Company’s financial information a more meaningful view of the
performance of the interest-earning assets and interest-bearing
liabilities and of the Company’s operating efficiency. Other
financial holding companies may define or calculate these measures
differently.
Management reviews yields on certain asset categories and the
net interest margin of the Company and its banking subsidiaries on
a fully taxable-equivalent (“FTE”) basis. In this non-GAAP
presentation, net interest income is adjusted to reflect tax-exempt
interest income on an equivalent before-tax basis. This measure
ensures comparability of net interest income arising from both
taxable and tax-exempt sources. Net interest income on a FTE basis
is also used in the calculation of the Company’s efficiency ratio.
The efficiency ratio, which is calculated by dividing non-interest
expense by total taxable-equivalent net revenue (less securities
gains or losses and lease depreciation), measures how much it costs
to produce one dollar of revenue. Securities gains or losses and
lease depreciation are excluded from this calculation to better
match revenue from daily operations to operational expenses.
Management considers the tangible common equity-to-tangible assets
ratio and tangible book value per common share as useful
measurements of the Company’s equity.
See the table marked “Reconciliation of Non-GAAP Financial
Measures” for a reconciliation of certain non-GAAP financial
measures used by the Company with their most closely related GAAP
measures.
(charts attached)
1st SOURCE CORPORATION 2nd QUARTER 2017 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,
2017 2017 2016
2017 2016 AVERAGE BALANCES Assets $
5,586,192 $ 5,437,247 $ 5,343,630 $ 5,512,131 $ 5,276,697 Earning
assets 5,205,508 5,075,410 4,986,635 5,140,819 4,925,204
Investments 836,915 839,283 804,856 838,093 799,853 Loans and
leases 4,308,276 4,187,231 4,105,111 4,248,088 4,056,772 Deposits
4,454,975 4,298,964 4,300,402 4,377,400 4,226,838 Interest bearing
liabilities 3,882,915 3,747,752 3,709,706 3,815,706 3,658,357
Common shareholders’ equity 697,229 683,647 659,092 690,476 654,344
INCOME STATEMENT DATA Net interest income $ 45,861 $
43,727 $ 42,293 $ 89,588 $ 83,582 Net interest income - FTE(1)
46,319 44,188 42,753 90,507 84,503 Provision for loan and lease
losses 2,738 1,000 2,049 3,738 3,024 Noninterest income 24,136
23,307 22,297 47,443 43,924 Noninterest expense 41,105 41,119
40,034 82,224 80,739 Net income 16,669 16,206 14,479 32,875 28,297
PER SHARE DATA Basic net income per common share $
0.64 $ 0.62 $ 0.56 $ 1.26 $ 1.08 Diluted net income per common
share 0.64 0.62 0.56 1.26 1.08 Common cash dividends declared 0.19
0.18 0.18 0.37 0.36 Book value per common share 26.96 26.46 25.59
26.96 25.59 Tangible book value per common share(1) 23.73 23.22
22.32 23.73 22.32 Market value - High 50.78 49.11 34.83 50.78 34.83
Market value - Low 43.58 42.15 30.32 42.15 27.01 Basic weighted
average common shares outstanding 25,927,032 25,903,397 25,853,537
25,915,280 25,888,534 Diluted weighted average common shares
outstanding 25,927,032 25,903,397 25,853,537 25,915,280 25,888,534
KEY RATIOS Return on average assets 1.20 % 1.21 %
1.09 % 1.20 % 1.08 % Return on average common shareholders’ equity
9.59 9.61 8.84 9.60 8.70 Average common shareholders’ equity to
average assets 12.48 12.57 12.33 12.53 12.40 End of period tangible
common equity to tangible assets(1) 10.98 11.11 10.90 10.98 10.90
Risk-based capital - Common Equity Tier 1(2) 12.43 12.69 12.20
12.43 12.20 Risk-based capital - Tier 1(2) 13.58 13.88 13.41 13.58
13.41 Risk-based capital - Total(2) 14.88 15.18 14.73 14.88 14.73
Net interest margin 3.53 3.49 3.41 3.51 3.41 Net interest margin -
FTE(1) 3.57 3.53 3.45 3.55 3.45 Efficiency ratio: expense to
revenue 58.72 61.34 61.98 60.00 63.32 Efficiency ratio: expense to
revenue - adjusted(1) 54.66 57.81 58.76 56.20 60.50 Net charge offs
to average loans and leases 0.09 (0.06 ) (0.01 ) 0.02 (0.02 ) Loan
and lease loss reserve to loans and leases 2.10 2.13 2.20 2.10 2.20
Nonperforming assets to loans and leases 0.66 0.63 0.49 0.66 0.49
June 30, March 31, December 31,
September 30, June 30, 2017
2017 2016 2016
2016 END OF PERIOD BALANCES Assets $ 5,687,230 $
5,501,526 $ 5,486,268 $ 5,447,911 $ 5,379,938 Loans and leases
4,381,314 4,234,862 4,188,071 4,179,417 4,152,763 Deposits
4,482,036 4,336,976 4,333,760 4,377,038 4,325,084 Reserve for loan
and lease losses 91,914 90,118 88,543 88,897 91,458 Goodwill and
intangible assets 83,848 83,960 84,102 84,244 84,386 Common
shareholders’ equity 699,202 685,934 672,650 670,259 661,756
ASSET QUALITY Loans and leases past due 90 days or more $
178 $ 344 $ 416 $ 611 $ 275 Nonaccrual loans and leases 15,923
18,090 19,907 19,922 12,579 Other real estate 710 916 704 551 452
Repossessions 13,052 8,121 9,373 8,089 7,619 Equipment owned under
operating leases 21 27 34
43 107 Total nonperforming assets
$ 29,884 $ 27,498 $ 30,434
$ 29,216 $ 21,032 (1) See
“Reconciliation of Non-GAAP Financial Measures” for more
information on this performance measure/ratio. (2) Calculated under
banking regulatory guidelines.
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited -
Dollars in thousands)
June 30,
March 31, December 31, June 30,
2017 2017 2016
2016
ASSETS
Cash and due from banks $ 63,473 $ 58,429 $ 58,578 $ 58,944 Federal
funds sold and interest bearing deposits with other banks 12,561
33,687 49,726 14,297 Investment securities available-for-sale
850,314 836,682 850,467 814,258 Other investments 24,238 22,458
22,458 21,973 Mortgages held for sale 16,204 8,409 15,849 15,924
Loans and leases, net of unearned discount: Commercial and
agricultural 876,404 843,757 812,264 759,175 Auto and light truck
512,021 430,489 411,764 457,586 Medium and heavy duty truck 290,687
290,167 294,790 273,674 Aircraft 787,516 783,523 802,414 822,842
Construction equipment 539,097 512,545 495,925 484,354 Commercial
real estate 720,078 723,623 719,170 715,932 Residential real estate
and home equity 526,592 522,772 521,931 506,369 Consumer
128,919 127,986 129,813
132,831
Total loans and leases 4,381,314 4,234,862
4,188,071 4,152,763 Reserve for loan and lease losses
(91,914 ) (90,118 ) (88,543 ) (91,458 )
Net
loans and leases 4,289,400 4,144,744 4,099,528 4,061,305
Equipment owned under operating leases, net 144,509 127,323 118,793
119,312 Net premises and equipment 54,783 55,167 56,708 54,506
Goodwill and intangible assets 83,848 83,960 84,102 84,386 Accrued
income and other assets 147,900 130,667
130,059 135,033
Total assets
$ 5,687,230 $ 5,501,526 $
5,486,268 $ 5,379,938
LIABILITIES
Deposits: Noninterest-bearing demand $ 979,801 $ 966,903 $ 991,256
$ 944,626 Interest-bearing deposits: Interest-bearing demand
1,519,419 1,418,395 1,471,526 1,391,823 Savings 832,341 839,257
814,326 779,899 Time 1,150,475 1,112,421
1,056,652 1,208,736
Total
interest-bearing deposits 3,502,235
3,370,073 3,342,504 3,380,458
Total deposits 4,482,036 4,336,976
4,333,760 4,325,084 Short-term
borrowings: Federal funds purchased and securities sold under
agreements to repurchase 148,109 176,079 162,913 161,826 Other
short-term borrowings 158,474 103,666
129,030 44,150
Total short-term
borrowings 306,583 279,745
291,943 205,976 Long-term debt and mandatorily
redeemable securities 70,438 85,479 74,308 64,738 Subordinated
notes 58,764 58,764 58,764 58,764 Accrued expenses and other
liabilities 70,207 54,628 54,843
63,620
Total liabilities
4,988,028 4,815,592 4,813,618
4,718,182
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, 2017, March 31, 2017, December 31,
2016, and June 30, 2016, respectively
436,538 436,538 436,538 436,538 Retained earnings 314,889 303,009
290,824 270,744 Cost of common stock in treasury (2,270,350,
2,282,044, 2,329,909, and 2,342,904 shares at June 30, 2017, March
31, 2017, December 31, 2016, and June 30, 2016, respectively)
(54,662 ) (54,940 ) (56,056 ) (56,357 ) Accumulated other
comprehensive income 2,437 1,327
1,344 10,831
Total shareholders’ equity
699,202 685,934 672,650
661,756
Total liabilities and shareholders’
equity $ 5,687,230 $ 5,501,526
$ 5,486,268 $ 5,379,938
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, 2017
2017 2016 2017
2016 Interest income: Loans and leases $ 48,032 $ 44,884 $
43,891 $ 92,916 $ 86,627 Investment securities, taxable 3,370 3,514
3,040 6,884 6,120 Investment securities, tax-exempt 677 683 697
1,360 1,389 Other 319 291 309
610 600
Total interest
income 52,398 49,372 47,937
101,770 94,736 Interest expense:
Deposits 4,511 3,734 3,790 8,245 7,561 Short-term borrowings 272
227 119 499 280 Subordinated notes 1,055 1,055 1,055 2,110 2,110
Long-term debt and mandatorily redeemable securities 699
629 680 1,328
1,203
Total interest expense 6,537
5,645 5,644 12,182
11,154
Net interest income 45,861 43,727
42,293 89,588 83,582 Provision for loan and lease losses
2,738 1,000 2,049 3,738
3,024
Net interest income after provision
for loan and lease losses 43,123 42,727
40,244 85,850 80,558
Noninterest income: Trust and wealth advisory 5,627 5,001
5,108 10,628 9,731 Service charges on deposit accounts 2,464 2,239
2,276 4,703 4,383 Debit card 2,986 2,750 2,816 5,736 5,415 Mortgage
banking 1,304 947 1,115 2,251 2,161 Insurance commissions 1,310
1,767 1,233 3,077 2,796 Equipment rental 7,586 6,832 6,517 14,418
12,590 Gains (losses) on investment securities available-for-sale
465 1,285 (209 ) 1,750 (199 ) Other 2,394
2,486 3,441 4,880 7,047
Total noninterest income 24,136
23,307 22,297 47,443
43,924 Noninterest expense: Salaries and employee benefits
20,712 21,345 21,194 42,057 42,545 Net occupancy 2,368 2,594 2,307
4,962 4,808 Furniture and equipment 5,108 4,793 4,811 9,901 9,601
Depreciation - leased equipment 6,296 5,680 5,444 11,976 10,545
Professional fees 1,672 1,077 1,190 2,749 2,409 Supplies and
communication 1,345 1,250 1,374 2,595 2,882 FDIC and other
insurance 573 623 911 1,196 1,790 Business development and
marketing 1,501 1,652 1,025 3,153 2,005 Loan and lease collection
and repossession 329 636 385 965 812 Other 1,201
1,469 1,393 2,670
3,342
Total noninterest expense 41,105
41,119 40,034 82,224
80,739 Income before income taxes 26,154 24,915
22,507 51,069 43,743 Income tax expense 9,485
8,709 8,028 18,194 15,446
Net income $ 16,669 $ 16,206
$ 14,479 $ 32,875 $
28,297 Per common share: Basic net income per common share
$ 0.64 $ 0.62 $ 0.56
$ 1.26 $ 1.08 Diluted net income per
common share $ 0.64 $ 0.62 $
0.56 $ 1.26 $ 1.08 Cash
dividends $ 0.19 $ 0.18 $ 0.18
$ 0.37 $ 0.36 Basic weighted
average common shares outstanding 25,927,032
25,903,397 25,853,537 25,915,280
25,888,534 Diluted weighted average common shares
outstanding 25,927,032 25,903,397
25,853,537 25,915,280 25,888,534
1st SOURCE CORPORATION DISTRIBUTION OF
ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY INTEREST RATES
AND INTEREST DIFFERENTIAL (Unaudited - Dollars in thousands)
Three Months Ended
June 30, 2017 March 31, 2017 June
30, 2016 Average
Balance
InterestIncome/Expense
Yield/
Rate
Average
Balance
InterestIncomeExpense
Yield/
Rate
Average
Balance
InterestIncome/Expense
Yield/
Rate
ASSETS
Investment securities
available-for-sale: Taxable $ 707,373 $ 3,370 1.91 % $ 708,249 $
3,514 2.01 % $ 678,849 $ 3,040 1.80 % Tax exempt(1) 129,542 983
3.04 % 131,034 994 3.08 % 126,007 1,012 3.23 % Mortgages held for
sale 11,325 115 4.07 % 8,155 81 4.03 % 11,100 110 3.99 % Loans and
leases, net of unearned discount(1) 4,308,276 48,069 4.48 %
4,187,231 44,953 4.35 % 4,105,111 43,926 4.30 % Other investments
48,992 319 2.61 % 40,741
291 2.90 % 65,568
309 1.90 % Total earning assets(1) 5,205,508 52,856
4.07 % 5,075,410 49,833 3.98 % 4,986,635 48,397 3.90 % Cash and due
from banks 61,801 59,967 60,786 Reserve for loan and lease losses
(91,044 ) (90,222 ) (90,107 ) Other assets 409,927
392,092
386,316
Total assets $ 5,586,192
$ 5,437,247 $
5,343,630
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Interest-bearing deposits 3,503,444 4,511 0.52 % 3,345,670 3,734
0.45 % 3,380,208 3,790 0.45 % Short-term borrowings 236,716 272
0.46 % 267,823 227 0.34 % 204,828 119 0.23 % Subordinated notes
58,764 1,055 7.20 % 58,764 1,055 7.28 % 58,764 1,055 7.22 %
Long-term debt and mandatorily redeemable securities 83,991
699 3.34 % 75,495
629 3.38 % 65,906 680
4.15 % Total interest-bearing liabilities 3,882,915 6,537
0.68 % 3,747,752 5,645 0.61 % 3,709,706 5,644 0.61 %
Noninterest-bearing deposits 951,531 953,294 920,194 Other
liabilities 54,517 52,554 54,638 Shareholders’ equity
697,229 683,647
659,092
Total liabilities and shareholders’ equity $
5,586,192 $ 5,437,247
$ 5,343,630
Less: Fully tax-equivalent adjustments (458 )
(461 ) (460 ) Net interest income/margin (GAAP-derived)(1)
$ 45,861 3.53 % $
43,727 3.49 % $ 42,293
3.41 % Fully tax-equivalent adjustments 458 461 460 Net
interest income/margin - FTE(1) $ 46,319
3.57 % $ 44,188
3.53 % $ 42,753 3.45 % (1)
See “Reconciliation of Non-GAAP Financial Measures” for more
information on this performance measure/ratio.
1st SOURCE
CORPORATION DISTRIBUTION OF ASSETS, LIABILITIES AND
SHAREHOLDERS’ EQUITY INTEREST RATES AND INTEREST
DIFFERENTIAL (Unaudited - Dollars in thousands)
Six
Months Ended June 30, 2017 June 30, 2016
Average
Balance
InterestIncome/Expense
Yield/
Rate
Average
Balance
InterestIncome/Expense
Yield/
Rate
ASSETS
Investment securities
available-for-sale: Taxable $ 707,809 $ 6,884 1.96 % $ 675,419 $
6,120 1.82 % Tax exempt(1) 130,284 1,977 3.06 % 124,434 2,025 3.27
% Mortgages held for sale 9,748 196 4.05 % 10,119 205 4.07 % Loans
and leases, net of unearned discount(1) 4,248,088 93,022 4.42 %
4,056,772 86,707 4.30 % Other investments 44,890
610 2.74 % 58,460 600
2.06 % Total earning assets(1) 5,140,819 102,689 4.03
% 4,925,204 95,657 3.91 % Cash and due from banks 60,889 59,818
Reserve for loan and lease losses (90,635 ) (89,476 ) Other assets
401,058 381,151
Total assets $ 5,512,131
$ 5,276,697
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Interest-bearing deposits 3,424,992 8,245 0.49 % 3,317,235 7,561
0.46 % Short-term borrowings 252,183 499 0.40 % 218,153 280 0.26 %
Subordinated notes 58,764 2,110 7.24 % 58,764 2,110 7.22 %
Long-term debt and mandatorily redeemable securities 79,767
1,328 3.36 % 64,205
1,203 3.77 % Total interest-bearing
liabilities 3,815,706 12,182 0.64 % 3,658,357 11,154 0.61 %
Noninterest-bearing deposits 952,408 909,603 Other liabilities
53,541 54,393 Shareholders’ equity 690,476
654,344
Total liabilities and shareholders’ equity $
5,512,131 $ 5,276,697
Less: Fully tax-equivalent
adjustments (919 ) (921 ) Net interest income/margin
(GAAP-derived)(1) $ 89,588 3.51
% $ 83,582 3.41 % Fully
tax-equivalent adjustments 919 921 Net interest income/margin -
FTE(1) $ 90,507 3.55 %
$ 84,503 3.45 % (1) See
“Reconciliation of Non-GAAP Financial Measures” for more
information on this performance measure/ratio.
1st SOURCE
CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited - Dollars in thousands, except per share
data)
Three Months
Ended Six Months Ended June 30, March 31,
June 30, June 30, June 30,
2017 2017 2016
2017 2016
Calculation of
Net Interest Margin
(A) Interest income (GAAP) $ 52,398 $ 49,372 $ 47,937 $ 101,770 $
94,736 Fully tax-equivalent adjustments: (B) - Loans and leases 152
150 145 302 285 (C) - Tax exempt investment securities
306 311 315 617
636 (D) Interest income - FTE (A+B+C) 52,856
49,833 48,397 102,689 95,657 (E) Interest expense (GAAP) 6,537
5,645 5,644 12,182 11,154 (F) Net interest income (GAAP)
(A-E) 45,861 43,727 42,293
89,588 83,582 (G) Net
interest income - FTE (D-E) 46,319 44,188
42,753 90,507 84,503
(H) Annualization factor 4.011 4.056 4.022 2.017 2.011 (I)
Total earning assets $ 5,205,508 $ 5,075,410 $ 4,986,635 $
5,140,819 $ 4,925,204 Net interest margin (GAAP-derived) (F*H)/I
3.53 % 3.49 % 3.41 % 3.51 % 3.41 % Net interest margin - FTE
(G*H)/I 3.57 % 3.53 % 3.45 % 3.55 % 3.45 %
Calculation of
Efficiency Ratio
(F) Net interest income (GAAP) $ 45,861 $ 43,727 $ 42,293 $ 89,588
$ 83,582 (G) Net interest income - FTE 46,319 44,188 42,753 90,507
84,503 (J) Plus: noninterest income (GAAP) 24,136 23,307 22,297
47,443 43,924 (K) Less: gains/losses on investment securities and
partnership investments (477 ) (1,314 ) (743 ) (1,791 ) (1,853 )
(L) Less: depreciation - leased equipment (6,296 )
(5,680 ) (5,444 ) (11,976 ) (10,545 )
(M) Total net revenue (GAAP) (F+J) 69,997
67,034 64,590 137,031
127,506 (N) Total net revenue - adjusted
(G+J–K–L) 63,682 60,501 58,863
124,183 116,029 (O) Noninterest
expense (GAAP) 41,105 41,119 40,034 82,224 80,739 (L)
Less:depreciation - leased equipment (6,296 ) (5,680 ) (5,444 )
(11,976 ) (10,545 ) (P) Less: contribution expense limited
to gains on investment securities in (K) —
(462 ) — (462 ) — (Q)
Noninterest expense - adjusted (O–L–P) 34,809 34,977 34,590 69,786
70,194 Efficiency ratio (GAAP-derived) (O/M) 58.72 % 61.34 % 61.98
% 60.00 % 63.32 % Efficiency ratio - adjusted (Q/N) 54.66 % 57.81 %
58.76 % 56.20 % 60.50 %
End of Period June 30,
March 31, June 30,
2017 2017 2016
Calculation of
Tangible Common Equity-to-Tangible Assets Ratio
(R) Total common shareholders’ equity (GAAP) $ 699,202 $ 685,934 $
661,756 (S) Less: goodwill and intangible assets
(83,848 ) (83,960 ) (84,386 ) (T) Total
tangible common shareholders’ equity (R–S) $ 615,354
$ 601,974 $ 577,370 (U) Total assets
(GAAP) 5,687,230 5,501,526 5,379,938 (S) Less: goodwill and
intangible assets (83,848 ) (83,960 ) (84,386
) (V) Total tangible assets (U–S) $ 5,603,382
$ 5,417,566 $ 5,295,552 Common
equity-to-assets ratio (GAAP-derived) (R/U) 12.29 % 12.47 % 12.30 %
Tangible common equity-to-tangible assets ratio (T/V) 10.98 % 11.11
% 10.90 %
Calculation of
Tangible Book Value per Common Share
(R) Total common shareholders’ equity (GAAP) $ 699,202 $ 685,934 $
661,756 (W) Actual common shares outstanding
25,935,324 25,923,630 25,862,770
Book value per common share (GAAP-derived) (R/W)*1000 $ 26.96 $
26.46 $ 25.59 Tangible common book value per share (T/W)*1000 $
23.73 $ 23.22 $ 22.32
The NASDAQ Stock Market National Market Symbol: “SRCE” (CUSIP
#336901 10 3)Please contact us at shareholder@1stsource.com
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170720005978/en/
1st Source CorporationAndrea Short, 574-235-2000
1st Source (NASDAQ:SRCE)
Historical Stock Chart
From Aug 2024 to Sep 2024
1st Source (NASDAQ:SRCE)
Historical Stock Chart
From Sep 2023 to Sep 2024