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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now. SOUTH BEND, Ind. — 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today announced third quarter net income of $14.95 million, up slightly compared to $14.90 million in the third quarter of 2013. The third quarter 2013 included $2.07 million of interest recoveries and expense reimbursements compared to $0.39 million in interest recoveries in 2014. However, for the first three quarters of the year, net income was $43.07 million versus $41.24 million a year earlier, a 4.44% increase. Diluted net income per common share for the third quarter of 2014 was $0.62 versus $0.60, up 3.33% over the same period in 2013. Diluted net income per common share for the first three quarters was $1.77 in 2014 compared to $1.67, up 5.99% over the previous year.
At its October meeting, the Board of Directors approved a cash dividend of $0.18 per common share. The dividend is payable to shareholders of record on November 5, 2014 and will be paid on November 14, 2014.
According to Christopher J. Murphy, III, Chairman, “1st Source Corporation had a productive third quarter. We completed extensive renovations of 6 banking centers in Fort Wayne, which introduced our new design of side by side banking. This defines everything 1st Source does with our clients – working in partnership with them; sharing information; providing straight talk and sound advice; and helping them achieve security, build wealth and realize their dreams. We will also be opening two new banking centers there before year end. A simultaneous grand reopening was held in early October at all 6 banking centers to celebrate our increased commitment to the Fort Wayne market.”
“Our net income for the quarter remained steady over a year ago despite reduced interest recoveries and expense reimbursements that benefited 2013's third quarter. Average loans and leases were up 6.22% in the third quarter from the same period last year, while credit quality remains strong with our nonperforming assets only 0.94% of net loans and leases. Additionally, average deposits were up over the third quarter a year ago, and we continue to add new clients to the Bank overall. Expenses remain in check and under 2013 levels as we're keeping a sharp eye on costs. To deliver for our shareholders, we continue our strategic focus on excellent credit quality, maintaining cost control, and outstanding client service,” Murphy concluded.
Total assets at the end of the third quarter of 2014 were $4.82 billion, up 3.67% from a year ago. Total loans and leases were $3.65 billion, up 5.37% from September 30, 2013. Total deposits were $3.84 billion, up 4.25% from the comparable figures at September 30, 2013. As of September 30, 2014, the common equity-to-assets ratio was 12.51%, compared to 12.44% a year ago and the tangible common equity-to-tangible assets ratio was 10.93% compared to 10.77% a year earlier.
The net interest margin was 3.58% for the third quarter of 2014 versus 3.79% for the same period in 2013. The net interest margin was 3.59% for the nine months ended September 30, 2014, versus 3.69% for the same period in 2013. Tax-equivalent net interest income was $41.17 million for the third quarter of 2014, compared to the $41.60 million from 2013's third quarter. For the first nine months of 2014, tax-equivalent net interest income was $120.88 million, compared to $119.15 million for the first nine months of 2013.
The reserve for loan and lease losses as of September 30, 2014 was 2.39% of total loans and leases compared to 2.44% at September 30, 2013. Net charge-offs of $2.58 million were recorded for the third quarter of 2014 (primarily due to one relationship) compared with net charge-offs of $0.76 million in the same quarter a year ago. Year-to-date, net charge-offs of $0.66 million have been recorded in 2014, compared to net charge-offs of $0.44 million through September 30, 2013. The ratio of nonperforming assets to net loans and leases was 0.94% as of September 30, 2014, compared to 1.14% on September 30, 2013.
Noninterest income for the third quarter of 2014 was $19.39 million, down 3.80% from the same period in 2013. The decrease for the quarter was mainly attributed to lower trust fees and losses on partnership investments. For the first nine months of 2014, noninterest income was $58.01 million, down 2.05% compared to 2013 primarily as a result of lower mortgage banking income and losses on partnership investments.
Noninterest expense was $37.65 million for the third quarter of 2014, down 2.02% from the third quarter of 2013. The decrease for the quarter was mainly attributed to lower loan and lease collection and repossession expenses. For the first nine months of 2014, noninterest expense was $108.05 million, down 2.42% compared with $110.72 million for the same period in 2013. Noninterest expense decreased primarily as a result of lower loan and lease collection and repossession expenses and reduced professional fees.