1st Source Reports 2nd Quarter Net Income up 13.4 Percent
21 July 1999
1st Source Reports 2nd Quarter Net Income up 13.4 Percent, Earnings Per Common Share up 13.2 Percent
SOUTH BEND, Ind.--July 20, 1999--1st Source Corp. , parent company of 1st Source Bank, today reported net income of $8.3 million for the second quarter of 1999, up 13.4 percent from the $7.3 million for the second quarter of 1998.On a diluted per share of common stock basis, net income for the second quarter of 1999 is up 13.2 percent to 43 cents from the 38 cents reported a year ago.
During the first six months of 1999, net income for 1st Source Corp. was $16.2 million, up 11.8 percent from the $14.5 million for the same period in 1998. Diluted net income per common share for the first six months of 1999 was 84 cents, up 13.5 percent from the 74 cents for the comparable period a year ago. The per share computations take into account the ten percent (10%) stock dividend declared in January 1999.
Earnings for the second quarter of 1999 represent a return on average common shareholders' equity of 14.89 percent, compared to the 14.52 percent for the second quarter of 1998. Return on average total assets for the second quarter of 1999 was 1.22 percent, compared to 1.16 percent for the second quarter of 1998.
Christopher J. Murphy III, chairman and chief executive officer, reported that at the July meeting, the board of directors approved a cash dividend for the second quarter of 8 cents per share which is 10.0 percent higher than the dividend a year ago. The second quarter cash dividend is payable Aug. 13, 1999 to shareholders of record Aug. 5, 1999.
Murphy went on to say, "With today's volatile markets, we are pleased with 1st Source's performance in the second quarter. We have continued our strong growth in earnings while managing the effects of tight net interest margins and absorbing a $400,000 write down of an investment in our venture capital company. We continue to grow one customer at a time by adding locations (two new banking centers and two mortgage offices have opened since January), yet remain challenged to manage the extra costs that this strategy entails."
Murphy continued, "In the first half of 1999, we experienced increased personnel and consulting expenses to ensure 1st Source's Year 2000 readiness. All of our critical programs have now been tested, and most installed, while only a handful of others are still being worked on. We understand the importance of this issue to our customers, and to our future. We will invest the time and talent necessary to assure the continuation of professional banking services in a very personal manner for the Year 2000 and beyond, just as our customers expect."
As of June 30, 1999, the 1st Source common equity-to-assets ratio was 8.0 percent, compared to 7.8 percent a year ago. Common shareholders' equity was $225.5 million, up 10.6 percent from the $203.9 million a year ago. Total assets at the end of the second quarter of 1999 were $2.81 billion, up 7.2 percent from the same time last year. Total deposits were up 7.6 percent and total loans up 3.2 percent over the comparable figures at the end of the second quarter of 1998.
1st Source's reserve for loan losses as of June 30, 1999 was 2.17 percent of total loans, compared to 2.05 percent as of June 30, 1998. The ratio of non-performing assets to net loans was 0.55 percent on June 30, 1999, compared to 0.51 percent on June 30, 1998. This gives 1st Source a solid coverage ratio of reserve for loan losses to non-performing assets of nearly four times.
1st Source Corp. takes pride in its identification as the largest locally owned financial institution headquartered in the Northern Indiana-Southwestern Michigan area. While delivering a comprehensive range of consumer and commercial banking services, 1st Source Bank has distinguished itself with innovative products and highly personalized services. 1st Source also competes for business nationally by offering specialized financing services for used private aircraft, automobiles for leasing and rental agencies, heavy duty trucks, and construction equipment. The corporation includes 50 banking locations in 12 counties, seven Trustcorp Mortgage offices in Indiana, Ohio and Kentucky; and 14 locations nationwide for the 1st Source Bank Specialty Finance Group. With a history dating back to 1863, 1st Source has a tradition of providing superior service to customers while playing a leadership role in the continued development of the communities in which it serves.
1st Source may be accessed on its home page at "www.1stsource.com." Its common stock is traded on the Nasdaq Stock Market under "SRCE" and appears in the National Market System tables in many daily newspapers under the code name "1st Src." Marketmakers in 1st Source common shares are ABN-AMRO Securities (USA); City Securities Corp.; Herzog, Heine, Geduld Inc.; Howe, Barnes Investments Inc.; Keefe, Bruyette & Woods Inc.; NatCity Investments; Roney Capital Markets; Sherwood Securities Corp.; Spear, Leeds & Kellogg; and Stifel, Nicolaus & Co. Inc.
1st Source's fixed and floating rate cumulative trust preferred securities are traded on the Nasdaq stock market under the symbols "SRCEP" and "SRCEO", respectively. The rate on the fixed rate securities is 9.0 percent and the rate for the third quarter, 1999 on the floating rate securities is 7.13 percent. Marketmakers in those securities are Howe, Barnes Investments Inc., Ryan Beck & Co. and Stifel, Nicolaus & Co.
Except for the historical information contained herein, this press release contains forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, such performance involves risks and uncertainties which may cause actual results to differ materially from those in such statements.
1st Source Corp.
2ND QUARTER 1999 FINANCIAL HIGHLIGHTS
(Unaudited -- Dollars in thousands except Per Share Data)
3 Months Ended 6 Months Ended
June 30 June 30
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1999 1998 1999 1998
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End of Period Balances
Assets $ 2,808,053 $2,618,926
Deposits 2,224,772 2,066,676
Loans 1,997,006 1,934,580
Reserve for Loan Losses 43,300 39,709
Nonperforming Assets 10,993 9,879
Common Shareholders'
Equity 225,491 203,910
Book Value Per Common
Share(a) 11.90 10.74
Common Shares
Outstanding(a) 18,952,650 18,978,795
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Income Statement Data
Net Interest Income $ 24,783 $ 23,611 $ 48,362 $ 46,855
Provision for Loan
Losses 1,443 2,689 2,736 5,090
Noninterest Income 14,853 11,776 29,039 22,438
Noninterest Expenses 24,701 20,487 48,301 40,341
Net Income 8,327 7,342 16,207 14,502
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Per Share Data(a)
Basic Net Income Per
Common Share $ .43 $ .38 $ .85 $ .76
Diluted Net Income
Per Common Share .43 .38 .84 .74
Cash Dividends .080 .066 .153 .132
Market Value-High 33.25 36.75 35.75 36.75
Market Value-Low 29.50 30.75 29.50 25.25
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Average Balances
Assets $2,738,957 $2,528,766 $ 2,688,876 $2,488,617
Deposits 2,182,565 1,998,422 2,123,985 1,930,513
Loans 1,949,409 1,883,477 1,917,540 1,860,377
Common Shareholders'
Equity 224,251 202,800 221,628 200,603
Earning Assets 2,478,587 2,327,967 2,438,149 2,295,432
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Key Ratios
Return on Average
Assets 1.22% 1.16% 1.22% 1.18%
Return on Average
Common Shareholders'
Equity 14.89 14.52 14.75 14.58
Average Common
Shareholders'
Equity to Average
Assets 8.19 8.02 8.24 8.06
Net Interest Margin 4.16 4.23 4.15 4.28
Net Charge Offs to
Average Loans .05 .14 .04 .09
Loan Loss Reserve
to Loans 2.17 2.05 2.17 2.05
Nonperforming Assets
to Loans .55 .51 .55 .51
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COMMON STOCK LISTING
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The Nasdaq Stock Market National Market Symbol; "SRCE"
CUSIP No. 336901 10 3
(a) Per share figures have been adjusted for a 10% stock dividend
declared Jan. 14, 1999.