South Bend, IN - 1st Source Corporation (Nasdaq:SRCE), parent
company of 1st Source Bank, today announced net income of
$48.20 million for the year of 2011, an increase of 16.85%
over the $41.24 million reported in 2010. The annual net
income sets a record as the highest in company history.
Fourth quarter net income was $11.18 million, down 11.02%
compared to $12.57 million in the fourth quarter of 2010,
partially due to lower interest recoveries on nonperforming
loans and lower mortgage banking income in the quarter.
Diluted net income per common share for the year was $1.96,
an all-time record and an increase of 61.98% over the $1.21
per common share a year earlier. Diluted net income per
common share for the fourth quarter was $0.45, up 80.00%
compared to $0.25 per common share reported in the fourth
quarter of the previous year. The December 2010 TARP
repurchase led to significant improvement in diluted earnings
per share, as diluted net income per common share for the
fourth quarter and year of 2010 was negatively impacted by
the preferred stock dividends and the accretion of discount
on the preferred stock issued to the US Treasury under the
TARP program in January 2009. Adjusting for these, the
diluted net income would have been $1.70 per common share for
the year of 2010 and $0.52 per common share for the fourth
quarter of 2010.
At the January 2012 meeting, the Board of Directors approved
a cash dividend of $0.16 per common share. The cash dividend
is payable on February 15, 2012 to shareholders of record on
February 6, 2012. Dividends for 2011 increased 4.92% over the
previous year and achieved 24 years of consecutive dividend
growth.
Christopher J. Murphy, III, Chairman of 1st Source,
commented, "2011 was a good year for 1st Source
Corporation. We set a record for annual net income and for
earnings per share; and we continue a record of 24 years of
consecutive dividend growth. 1st Source is strong and stable,
and because of that, through good times and bad, we have been
able to live up to our commitment of keeping our client's
best interests in mind while working to meet their unique
individual needs."
"Our focus has been on three things - outstanding customer
service, pristine credit quality, and superior financial
returns. We concentrated on providing guidance to our
clients, along with friendly, helpful service which assisted
in expanding our relationships with them. We attracted new
primary customers within our retail market area, and are
pleased to have achieved our new client growth goals for the
year. With all the financial uproar over the past year, from
Occupy Wall Street to Bank Transfer Day, we remain a
community bank committed to delivering highly personal
service and distinctive convenience to our clients."
"Credit continues to improve. Our 30 day delinquency rate
ended 2011 at 0.30% of total loans and leases; our net
charge-offs for 2011 were 0.27% to average net loans and
leases; while our net charge-offs in dollars were $8.36
million compared to $20.57 million a year earlier."
"At 1st Source, we've tightly managed our expenses, while
spending money to grow when we needed to, whether by adding
new staff members, or upgrading our facilities. I thank my
colleagues and our loyal clients for a good year." Mr.
Murphy concluded. The net interest margin was 3.66% for the
fourth quarter of 2011 versus 3.67% for the same period in
2010.
The net interest margin was 3.69% for the year ending
December 31, 2011, versus 3.59% for the same period in 2010.
Tax-equivalent net interest income was $37.89 million for the
fourth quarter of 2011, compared to $39.96 million for 2010's
fourth quarter. 2010's fourth quarter included $0.95 million
more in net interest recoveries than were experienced in
2011. For the twelve months of 2011, tax-equivalent net
interest income was $150.91 million, compared to $150.87
million for the twelve months of 2010.
As of December 31, 2011, the 1st Source common
equity-to-assets ratio was 11.98%, compared to 10.94% at
December 31, 2010 and its tangible common equity-to-tangible
assets ratio was 10.18% at December 31, 2011 compared to
9.12% at December 31, 2010. Common shareholders' equity was
$523.92 million, up from $486.38 million a year ago. Total
assets at the end of 2011 were $4.37 billion, down slightly
from the same period last year. Total loans and leases at
December 31, 2011 were $3.09 billion, up slightly, and total
deposits at December 31, 2011 were $3.52 billion, down 2.83%
from the comparable figures at the end of 2010.
1st Source's reserve for loan and lease losses as of December
31, 2011 was 2.64% of total loans and leases, compared to
2.83% as of December 31, 2010. Net charge-offs were $2.17
million for the fourth quarter 2011, compared to $6.08
million in the fourth quarter 2010. Net charge-offs for the
full year were $8.36 million in 2011 compared to $20.57
million in 2010. The ratio of nonperforming assets to net
loans and leases was 2.28% on December 31, 2011, compared to
2.81% on December 31, 2010.
Noninterest income for the fourth quarter of 2011 was $20.27
million, down 9.60% compared to $22.42 million for the fourth
quarter of 2010. For the year, noninterest income was $80.87
million, down 6.71% from the $86.69 million in 2010. The
predominate factors in the fourth quarter and year-to-date
change were lower mortgage banking income, equipment rental
income, and investment securities and other investment gains.
Noninterest expense for the fourth quarter of 2011 was $40.79
million, up 2.13% compared to $39.94 million for the fourth
quarter of 2010. The leading factors for the fourth quarter
increase were higher loan and lease collection and
repossession expense and salaries and employee benefits
expense offset by lower expenses associated with the disposal
of fixed assets. For the year ending December 31, 2011,
noninterest expense was $152.35 million, down 1.39% from
$154.51 million one year ago. The annual decrease was a
result of lower depreciation on leased equipment, FDIC and
other insurance expense, and lower expenses associated with
the disposal of fixed assets offset by higher furniture and
equipment expense and salaries and employee benefit expenses.
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 75 community banking
centers in 17 counties, 23 specialty finance locations
nationwide, 8 trust and wealth management locations, and 8
1st Source Insurance offices. With a history dating back to
1863, 1st Source Bank has a tradition of providing superior
service to clients while playing a leadership role in the
continued development of the communities it serves.
In addition to the results presented in accordance with
generally accepted accounting principles in the United States
of America, this press release contains certain non-GAAP
financial measures. 1st Source Corporation believes that
providing non-GAAP financial measures provides investors with
information useful to understanding our financial
performance. Additionally, these non-GAAP measures are used
by management for planning and forecasting purposes,
including measures based on "tangible equity" which is
"common shareholders' equity" excluding intangible assets.
1st Source may be accessed on its home page at
"www.1stsource.com." Its 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". 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.
Media Contact: Andrea Short, (574) 235-2000
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