1st Source Touts Net Income Record
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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 a record profit of nearly $55 million for 2013, compared to more than $49 million the previous year. During the fourth quarter, profit also rose to $13.7 million from $12.6 million a year earlier. Chief Executive Officer Chris Murphy says performance was bolstered by strong credit quality and the opening of a second Lafayette branch. January 23, 2014
News Release
SOUTH BEND, Ind. – 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today announced record net income of $54.96 million for the year of 2013, a 10.73 percent increase over the $49.63 million in 2012. The annual net income is the highest in company history. Fourth quarter net income was $13.72 million, up 11.10 percent compared to $12.35 million in the fourth quarter of 2012.
Diluted net income per common share for the year was $2.23, another all-time record and an increase of 10.40 percent over the $2.02 per common share a year earlier. Diluted net income per common share for the fourth quarter was $0.56, up 12.00 percent compared to $0.50 per common share reported in the fourth quarter of the previous year.
At its January 2014 meeting, the 1st Source Board of Directors approved a cash dividend of $0.17 per common share. The cash dividend is payable on February 14, 2014 to shareholders of record on February 4, 2014. Dividends for 2013 increased 3.03 percent over the previous year.
Christopher J. Murphy, III, Chairman, commented, “I'm pleased to report a strong fourth quarter and a strong year for 1st Source Corporation. This was another record year in earnings, and continues our streak of 26 years of consecutive dividend growth. The yearly results were helped considerably by our credit performance. Our credit quality continues to be strong as net charge-offs for the year were remarkably low at about two tenths of one percent of average loans and leases.”
“The fourth quarter was quite busy. We opened our second banking center in Lafayette, Indiana, a good market in a college town that fits us well. We also continued our 150th Anniversary celebrations with receptions for clients in each of our banking centers. Additionally, we produced a promotion designed to highlight the strength of our communities – the “150 years, $150,000 Cheers” campaign. 1st Source donated $150,000 in $1,000 increments to not-for-profit organizations, an important part of the fabric of the communities we serve. The charities were nominated by community members and selected in each region based on the quality and quantity of nominations. Two final not-for-profits received $15,000 each to help fill needs in our area. The community involvement was outstanding – we received over 13,500 nominations for over 1,500 different charities.”
“At 1st Source, we continue to focus on the basics of delivering exceptional client service, practicing rigorous cost control, and maintaining pristine credit quality. We look forward optimistically and with enthusiasm to continue building a company that all of us and our long term shareholder partners can be proud of,” concluded Mr. Murphy.
The net interest margin was 3.59 percent for the fourth quarter of 2013 versus 3.64 percent for the same period in 2012. The net interest margin was 3.67 percent for the year ending December 31, 2013 versus 3.69 percent for the year ending December 31, 2012. Tax-equivalent net interest income was $39.50 million for the fourth quarter of 2013, compared to $39.00 million for 2012's fourth quarter. For the twelve months of 2013, tax-equivalent net interest income was $158.64 million, compared to $153.84 million for the twelve months of 2012.
As of December 31, 2013, the common equity-to-assets ratio was 12.39 percent, compared to 12.28 percent at December 31, 2012 and the tangible common equity-to-tangible assets ratio was 10.76 percent at December 31, 2013 compared to 10.56 percent at December 31, 2012. Common shareholders' equity was $585.38 million, up from $558.66 million a year ago. Total assets at the end of 2013 were $4.72 billion, up 3.78 percent from the same period last year. Total loans and leases at December 31, 2013 were $3.55 billion, up 6.66 percent, and total deposits at December 31, 2013 were $3.65 billion, up slightly from the comparable figures at the end of 2012.
Reserve for loan and lease losses as of December 31, 2013 was 2.35 percent of total loans and leases, compared to 2.50 percent as of December 31, 2012. Net charge-offs were $0.14 million for the fourth quarter 2013, compared to $0.98 million in the fourth quarter 2012. Net charge-offs for the full year were $0.58 million in 2013 compared to $4.09 million in 2012. The ratio of nonperforming assets to net loans and leases was 1.29 percent on December 31, 2013, compared to 1.25 percent on December 31, 2012.
Noninterest income for the fourth quarter of 2013 was $17.99 million, down 12.58 percent compared to $20.57 million for the fourth quarter of 2012. The fourth quarter decrease was primarily a result of reduced mortgage banking income, lower trust fees and lower services charges on deposit accounts. For the year, noninterest income was $77.21 million, down 4.90 percent from the $81.19 million in 2012. The year-to-date decrease was mainly a result of reduced equipment rental income, mortgage banking income and lower service charges on deposit accounts offset by higher trust fees, increased debit card income and higher mutual fund and dividend income.
Noninterest expense for the fourth quarter of 2013 was $38.59 million, down 2.84 percent compared to $39.72 million for the fourth quarter of 2012. The leading factors for the fourth quarter decrease were lower loan and lease collection and repossession expenses, reduced salary and employee benefits expense and a reduction in professional fees offset by higher business development and marketing expenses. For the year ending December 31, 2013, noninterest expense was $149.31 million, down 1.47 percent from $151.54 million one year ago. The annual difference was primarily a result of reduced salary and employee benefit expense, depreciation on leased equipment and loan and lease collection and repossession expenses. These decreases were offset by increased furniture and equipment expenses and other expenses.
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, construction and environmental equipment. The Corporation includes 77 community banking centers in 17 counties, 9 trust and wealth management locations, 8 1st Source Insurance offices, as well as 22 specialty finance locations nationwide. Celebrating 150 years, 1st Source has a history dating back to 1863. The Bank has a tradition of providing superior service to clients while playing a leadership role in the continued development of the communities it serves.
Source: 1st Source Corp.