1st Source Q2 Earnings Up
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowSouth Bend-based 1st Source Corp. (Nasdaq: SRCE) is reporting second quarter net income of $14.5 million, compared to $14 million in the same period a year ago. Chief Executive Officer Chris Murphy says loan growth was “healthy,” up more than $145 million in the quarter. July 24, 2014
News Release
SOUTH BEND, Ind. — 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today reported net income of $14.49 million for the second quarter of 2014, up 3.96% over the $13.94 million earned in the second quarter of 2013. Year to date, net income was $28.13 million, up 6.76% compared to the first six months of last year. Diluted net income per common share for the second quarter amounted to $0.59, up 5.36% compared to $0.56 for the second quarter of 2013. Diluted net income per common share for the first half of 2014 was $1.15, an increase of 7.48%, compared to the $1.07 earned a year earlier.
At its July meeting, the Board of Directors approved a cash dividend of $0.18 per common share. The dividend is payable to shareholders of record on August 5, 2014 and will be paid on August 15, 2014.
According to Christopher J. Murphy, III, Chairman, “1st Source Corporation turned in a solid performance in the second quarter. Loan growth was healthy, up $145.97 million this quarter over the previous quarter, and up $230.15 million over the same quarter a year ago. In spite of somewhat lower yields, we have successfully maintained our net interest margin which held steady at 3.59%. Similar to national trends, in our markets we are seeing a consolidation of clients and a return of some of our competitors to loan structure and pricing practices that were prominent before the financial market meltdown in 2008. If this continues, it could put further pressure on interest margins and adversely impact credit quality across the country.”
“Also, we opened a new banking center at the University of Notre Dame, along with the installation of 5 additional ATMs on the campus. This enhances our ability to better serve students, faculty and staff, as well as the University's administrative offices. We are remodeling some of the banking centers in our system to serve our clients more conveniently and effectively. Four of the banking centers have been completed and more are scheduled to finish in September,” Mr. Murphy concluded.
Total assets were $4.93 billion, up 6.19% from a year earlier. Total loans and leases were $3.72 billion, up 6.59% from June 30, 2013. Total deposits were $3.82 billion, up 3.11% from the comparable figures at June 30, 2013. As of June 30, 2014, the common equity-to-assets ratio was 12.06%, down from 12.24% a year ago and the tangible common equity-to-tangible assets ratio was 10.50% compared to 10.56% a year earlier.
The net interest margin was 3.59% for the second quarter of 2014 versus 3.65% for the same period in 2013. The net interest margin was 3.59% for the six months ended June 30, 2014, versus 3.64% for the same period in 2013. Tax-equivalent net interest income was $40.62 million for the second quarter of 2014, compared to the $39.32 million from 2013's second quarter. For the first six months of 2014, tax-equivalent net interest income was $79.71 million, compared to $77.54 million for the first six months of 2013.
The reserve for loan and lease losses as of June 30, 2014 was 2.38% of total loans and leases compared to 2.45% at June 30, 2013. Net recoveries of $1.22 million were recorded for the second quarter of 2014, compared with net recoveries of $0.39 million in the same quarter a year ago. Year-to-date, net recoveries of $1.92 million have been recorded in 2014, compared to net recoveries of $0.33 million for the first half of 2013. The provision for loan and lease losses was $2.54 million for the second quarter of 2014, compared with $1.29 million from the same period in 2013. For the first six months of 2014, the provision for loan and lease losses was $3.35 million compared with $2.05 million for the first six months of 2013. The ratio of nonperforming assets to net loans and leases was 1.08% as of June 30, 2014 up from 1.01% on June 30, 2013.
Noninterest income for the second quarter of 2014 was $19.22 million, down 4.47% from same period in 2013. The decrease for the quarter was mainly attributed to lower mortgage banking income. For the first six months of 2014, noninterest income was $38.62 million, down 1.15% compared to 2013 primarily as a result of lower mortgage banking income and losses on partnership investments.
Noninterest expense was $34.42 million for the second quarter of 2014, down 3.69% from the second quarter of 2013. For the first six months of 2014, noninterest expense was $70.40 million, down 2.63% compared with $72.29 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 salaries and benefits.
Source: 1st Source Corporation