SRCE 1st Source Corp.

1st Source Corporation Reports First Quarter Results, Cash Dividend Declared

1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported quarterly net income of $27.39 million for the first quarter of 2022, down 2.54% from the $28.11 million reported in the first quarter a year ago. Diluted net income per common share for the first quarter of 2022 and 2021 was $1.10.

At its April 2022 meeting, the Board of Directors approved a cash dividend of $0.31 per common share, up 3.33% from the $0.30 per common share declared a year ago. The cash dividend is payable to shareholders of record on May 3, 2022 and will be paid on May 13, 2022.

Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, “We are pleased with our financial performance during the quarter. Average loans grew $185.66 million or 3.65% net of Paycheck Protection Program (PPP) loans from the first quarter last year. We continue to help clients finalize the forgiveness process with the SBA and plan to work through the remaining balances in the second quarter. The expected reduction in PPP loan fees and mortgage income had the largest impact on our net income results. After adjusting for the impact of PPP loans, our first quarter 2022 net interest margin increased 17 basis points from the fourth quarter of 2021 while maintaining stable loan and lease quality. We are hopeful that the Federal Reserve can successfully decelerate runaway inflation through prudent monetary policy as we move further into 2022 and beyond.

“We were thrilled to learn during the first quarter that Forbes had named 1st Source among ‘America’s Best Midsize Employers’ for the second consecutive year. The list consists of 500 companies with 1,000 employees or more. This ranking was compiled via a survey in partnership with Statista. Sixty thousand participants were asked to rate, on a scale of zero to 10, their willingness to recommend their employer to others. Respondents were also asked to rate their companies on factors such as working conditions, development opportunities and compensation. It’s long been our goal to provide a values-based workplace and culture that uplifts and encourages every team member. We hope that our colleagues are proud to be part of that culture, and the achievement of being named among the top midsize employers in the country once again lets us know our efforts are making a difference.

“Clearly, the past two years have proven to be difficult as we all faced, and continue to face, the challenges of the COVID-19 pandemic. We’ve worked hard to keep our 1st Source family healthy while providing our clients with the exceptional quality service they expected from us. We were recently able to relax our masking and gathering protocols following the CDC’s recent guideline changes and the overall high inoculation rate among our team, and our colleagues have enjoyed interacting with each other, our clients and our communities more freely as of late. As always, we will continue to monitor the information available to us and make decisions with the best interests of all those we interact with in mind, but it has been nice to get back to a sense of normalcy in how we conduct business,” Mr. Murphy concluded.

FIRST QUARTER 2022 FINANCIAL RESULTS

Loans

First quarter average loans and leases of $5.32 billion increased $185.66 million, up 3.65% net of PPP loans from the year ago quarter and increased $68.82 million, up 1.32% net of PPP loans from the previous quarter. PPP forgiveness and customer payments totaled $36.61 million in the first quarter of 2022. PPP loans of $37.94 million remained outstanding which is net of $1.24 million in unearned fees as of March 31, 2022. The aircraft, auto and light truck and construction equipment portfolios all grew in the first quarter of 2022 compared to the first quarter of 2021 and the previous quarter.

Deposits

Average deposits of $6.62 billion grew $636.40 million for the quarter ended March 31, 2022, up 10.64% from the year ago quarter and decreased $83.71 million, down 1.25% from the previous quarter. Deposit growth over the last year came from all areas - business, consumer and public fund deposits while brokered deposits have declined over the year.

Net Interest Income and Net Interest Margin

First quarter 2022 tax-equivalent net interest income of $59.73 million increased $2.19 million, or 3.81% from the first quarter a year ago and decreased $0.45 million, or 0.75% from the fourth quarter of 2021. We recognized $1.47 million in PPP loan fees during the first quarter of 2022 compared to $3.98 million in the first quarter of 2021.

First quarter 2022 net interest margin was 3.17%, a decrease of 18 basis points from the 3.35% for the same period in 2021 and an increase of eight basis points from the previous quarter. On a fully tax-equivalent basis, first quarter 2022 net interest margin was 3.18%, a decrease of 17 basis points from the 3.35% for the same period in 2021 and was higher by nine basis points compared to the previous quarter. Fees for PPP loans had a positive impact on the net interest margin of six basis points for the current quarter compared to a positive impact of 10 basis points in the same period a year ago. Additionally, lower interest expense on mandatorily redeemable securities due to book value adjustments had a positive six basis point impact on the net interest margin during the first quarter of 2022.

During the prior quarter, PPP loans had a positive impact on the net interest margin of 16 basis points, and we recognized $3.58 million in PPP loan fees during that quarter. Although the margin continues to experience pressure from the low interest rate environment, the Federal Reserve’s 25 basis point interest rate increase during the quarter and its signaling of additional rate increases throughout the remainder of 2022 could contribute to some relief.

Noninterest Income

First quarter 2022 noninterest income of $23.15 million decreased $2.72 million, or 10.53% from the first quarter a year ago and decreased $0.68 million, or 2.87% from the fourth quarter of 2021.

Noninterest income was lower compared to the first quarter a year ago mainly from reduced mortgage banking income resulting from a lower balance of loans originated and sold in the secondary market as well as a lower margin recognized on those loans. Equipment rental income continued to shrink as demand for leases declined. This was offset by higher trust and wealth advisory fees and a rise in service charges on deposit accounts.

The decrease in noninterest income from the prior quarter was mainly due to decreased mortgage banking income as described above, reduced debit card income and lower equipment rental income offset by increased insurance commissions due to seasonal contingent commissions received and higher partnership investment gains.

Noninterest Expense

First quarter 2022 noninterest expense of $45.34 million increased $1.20 million, or 2.71% from the first quarter a year ago and decreased $3.41 million, or 7.00% from the prior quarter.

The increase in noninterest expense from the first quarter a year ago was mainly the result of a higher loan loss provision for unfunded loan commitments, higher business development costs tied to fewer COVID-19 restrictions and increased data processing charges offset by decreased leased equipment depreciation as the average equipment rental portfolio continues to decline.

The decrease in noninterest expense from the prior quarter was primarily the result of lower salaries and wages due to a one-time special COVID-19 vaccination reward in the prior quarter, reduced commission compensation, and decreased legal and professional consulting fees offset by an increased loan loss provision for unfunded loan commitments, higher snow removal costs due to seasonal weather conditions and increased data processing.

Credit

The allowance for loan and lease losses as of March 31, 2022 was 2.41% of total loans and leases compared to 2.38% at December 31, 2021 and 2.53% at March 31, 2021. The allowance calculation includes PPP loans which are guaranteed by the SBA. Excluding these loans from the calculation results in an allowance of 2.43% at March 31, 2022, compared to 2.42% at December 31, 2021 and 2.74% at March 31, 2021. Net recoveries of $0.23 million were recorded for the first quarter of 2022 compared with net charge-offs of $3.50 million in the same quarter a year ago and $5.15 million of net charge-offs in the prior quarter. The majority of recoveries during the quarter were related to the aircraft portfolio.

The provision for credit losses was $2.23 million for the first quarter of 2022, a decrease of $0.17 million compared with the same period in 2021 and an increase of $3.35 million from the previous quarter. The ratio of nonperforming assets to loans and leases was 0.66% as of March 31, 2022, compared to 0.77% on December 31, 2021 and 1.12% on March 31, 2021. Excluding PPP loans, the ratio of non-performing assets to loans and leases was 0.67% at March 31, 2022, 0.78% at December 31, 2021 and 1.22% at March 31, 2021. While nonperforming assets showed improvement during the quarter, the allowance for loan and lease losses increased at March 31, 2022 due to economic uncertainty stemming from the war in Ukraine, inflationary pressures and prolonged supply chain disruptions.

Capital

As of March 31, 2022, the common equity-to-assets ratio was 10.79%, compared to 11.32% at December 31, 2021 and 11.87% a year ago. The tangible common equity-to-tangible assets ratio was 9.85% at March 31, 2022 compared to 10.39% at December 31, 2021 and 10.87% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 13.88% at March 31, 2022 compared to 13.72% at December 31, 2021 and 13.43% a year ago. During the first quarter of 2022, 45,419 shares were repurchased for treasury reducing common shareholders’ equity by $2.18 million.

Book value per share declined to $34.97 primarily due to non-credit-related, negative market value adjustments to our investment securities available-for-sale portfolio during the quarter. Market value adjustments were the result of changes in interest rates, market spreads and market conditions subsequent to purchase.

ABOUT 1ST SOURCE CORPORATION

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 its clients, individuals, businesses and the communities it serves. For more information, visit .

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, and construction equipment. The Corporation includes 79 banking centers, 18 1st Source Bank Specialty Finance Group locations nationwide, nine Wealth Advisory Services locations and 10 1st Source Insurance offices.

FORWARD LOOKING STATEMENTS

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,” “hope,” “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.

NON-GAAP FINANCIAL MEASURES

The accounting and reporting policies of 1st Source conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures are used by management to evaluate and measure the Company’s performance. Although these non-GAAP financial measures are frequently used by investors to evaluate a financial institution, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. These include taxable-equivalent net interest income (including its individual components), net interest margin (including its individual components), the efficiency ratio, tangible common equity-to-tangible assets ratio and tangible book value per common share. Management believes that these measures provide users of the Company’s financial information a more meaningful view of the performance of the interest-earning assets and interest-bearing liabilities and of the Company’s operating efficiency. Other financial holding companies may define or calculate these measures differently.

Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent (“FTE”) basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a FTE basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses and lease depreciation), measures how much it costs to produce one dollar of revenue. Securities gains or losses and lease depreciation are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity-to-tangible assets ratio and tangible book value per common share as useful measurements of the Company’s equity.

See the table marked “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of certain non-GAAP financial measures used by the Company with their most closely related GAAP measures.

Category: Earnings

(charts attached)

1st SOURCE CORPORATION

 

 

 

 

 

 

1st QUARTER 2022 FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

(Unaudited - Dollars in thousands, except per share data)

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

December 31,

March 31,

 

 

 

 

2022

2021

2021

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

Assets

$

8,008,738

 

$

8,111,055

 

$

7,350,413

 

 

 

 

Earning assets

 

7,620,248

 

 

7,715,838

 

 

6,960,551

 

 

 

 

Investments

 

1,887,055

 

 

1,715,227

 

 

1,230,977

 

 

 

 

Loans and leases

 

5,324,344

 

 

5,311,964

 

 

5,499,009

 

 

 

 

Deposits

 

6,616,869

 

 

6,700,575

 

 

5,980,471

 

 

 

 

Interest bearing liabilities

 

4,913,453

 

 

4,959,322

 

 

4,577,664

 

 

 

 

Common shareholders’ equity

 

910,793

 

 

918,950

 

 

894,553

 

 

 

 

Total equity

 

964,156

 

 

966,063

 

 

938,451

 

 

 

 

INCOME STATEMENT DATA

 

 

 

 

 

 

Net interest income

$

59,618

 

$

60,067

 

$

57,412

 

 

 

 

Net interest income - FTE(1)

 

59,726

 

 

60,176

 

 

57,533

 

 

 

 

Provision (recovery of provision) for credit losses

 

2,233

 

 

(1,117

)

 

2,398

 

 

 

 

Noninterest income

 

23,145

 

 

23,828

 

 

25,869

 

 

 

 

Noninterest expense

 

45,336

 

 

48,746

 

 

44,140

 

 

 

 

Net income

 

27,401

 

 

27,735

 

 

28,106

 

 

 

 

Net income available to common shareholders

 

27,390

 

 

27,723

 

 

28,105

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

Basic net income per common share

$

1.10

 

$

1.11

 

$

1.10

 

 

 

 

Diluted net income per common share

 

1.10

 

 

1.11

 

 

1.10

 

 

 

 

Common cash dividends declared

 

0.31

 

 

0.31

 

 

0.29

 

 

 

 

Book value per common share(2)

 

34.97

 

 

37.04

 

 

35.27

 

 

 

 

Tangible book value per common share(1)

 

31.57

 

 

33.64

 

 

31.95

 

 

 

 

Market value - High

 

52.70

 

 

51.20

 

 

50.38

 

 

 

 

Market value - Low

 

45.78

 

 

45.91

 

 

38.73

 

 

 

 

Basic weighted average common shares outstanding

 

24,743,790

 

 

24,775,288

 

 

25,320,930

 

 

 

 

Diluted weighted average common shares outstanding

 

24,743,790

 

 

24,775,288

 

 

25,320,930

 

 

 

 

KEY RATIOS

 

 

 

 

 

 

Return on average assets

 

1.39

%

 

1.36

%

 

1.55

%

 

 

 

Return on average common shareholders’ equity

 

12.20

 

 

11.97

 

 

12.74

 

 

 

 

Average common shareholders’ equity to average assets

 

11.37

 

 

11.33

 

 

12.17

 

 

 

 

End of period tangible common equity to tangible assets(1)

 

9.85

 

 

10.39

 

 

10.87

 

 

 

 

Risk-based capital - Common Equity Tier 1(3)

 

13.88

 

 

13.72

 

 

13.43

 

 

 

 

Risk-based capital - Tier 1(3)

 

15.67

 

 

15.50

 

 

15.12

 

 

 

 

Risk-based capital - Total(3)

 

16.93

 

 

16.76

 

 

16.39

 

 

 

 

Net interest margin

 

3.17

 

 

3.09

 

 

3.35

 

 

 

 

Net interest margin - FTE(1)

 

3.18

 

 

3.09

 

 

3.35

 

 

 

 

Efficiency ratio: expense to revenue

 

54.78

 

 

58.10

 

 

53.00

 

 

 

 

Efficiency ratio: expense to revenue - adjusted(1)

 

53.29

 

 

56.60

 

 

50.99

 

 

 

 

Net charge offs to average loans and leases

 

(0.02

)

 

0.38

 

 

0.26

 

 

 

 

Loan and lease loss allowance to loans and leases

 

2.41

 

 

2.38

 

 

2.53

 

 

 

 

Nonperforming assets to loans and leases

 

0.66

 

 

0.77

 

 

1.12

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

December 31,

September 30,

 

June 30,

March 31,

 

2022

2021

2021

 

2021

2021

END OF PERIOD BALANCES

 

 

 

 

 

 

Assets

$

8,012,463

 

$

8,096,289

 

$

7,964,092

 

 

$

7,718,694

$

7,511,931

Loans and leases

 

5,394,003

 

 

5,346,214

 

 

5,358,797

 

 

 

5,483,045

 

5,523,085

Deposits

 

6,673,092

 

 

6,679,065

 

 

6,522,505

 

 

 

6,345,410

 

6,131,341

Allowance for loan and lease losses

 

129,959

 

 

127,492

 

 

133,755

 

 

 

136,361

 

139,550

Goodwill and intangible assets

 

83,921

 

 

83,926

 

 

83,931

 

 

 

83,937

 

83,942

Common shareholders’ equity

 

864,850

 

 

916,255

 

 

911,333

 

 

 

901,226

 

891,295

Total equity

 

919,470

 

 

969,464

 

 

956,397

 

 

 

945,457

 

935,759

ASSET QUALITY

 

 

 

 

 

 

Loans and leases past due 90 days or more

$

274

 

$

249

 

$

96

 

 

$

44

$

66

Nonaccrual loans and leases

 

35,435

 

 

38,706

 

 

43,166

 

 

 

55,864

 

58,513

Other real estate

 

 

 

 

 

 

 

 

 

369

Repossessions

 

73

 

 

861

 

 

690

 

 

 

1,213

 

2,214

Equipment owned under operating leases

 

343

 

 

1,518

 

 

1,598

 

 

 

1,728

 

1,647

Total nonperforming assets

$

36,125

 

$

41,334

 

$

45,550

 

 

$

58,849

$

62,809

(1) See “Reconciliation of Non-GAAP Financial Measures” for more information on this performance measure/ratio.

(2) Calculated as common shareholders’ equity divided by common shares outstanding at the end of the period.

(3) Calculated under banking regulatory guidelines.

1st SOURCE CORPORATION

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

 

 

 

 

 

 

(Unaudited - Dollars in thousands)

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

March 31,

 

2022

 

2021

 

2021

 

2021

ASSETS

 

 

 

 

 

 

 

Cash and due from banks

$

69,195

 

 

$

54,420

 

 

$

77,740

 

 

$

69,683

 

Federal funds sold and interest bearing deposits with other banks

 

347,697

 

 

 

470,767

 

 

 

559,542

 

 

 

266,271

 

Investment securities available-for-sale

 

1,857,431

 

 

 

1,863,041

 

 

 

1,583,240

 

 

 

1,291,340

 

Other investments

 

25,538

 

 

 

27,189

 

 

 

27,189

 

 

 

27,429

 

Mortgages held for sale

 

4,757

 

 

 

13,284

 

 

 

34,594

 

 

 

9,351

 

Loans and leases, net of unearned discount:

 

 

 

 

 

 

 

Commercial and agricultural

 

869,093

 

 

 

918,712

 

 

 

1,005,849

 

 

 

1,238,708

 

Solar

 

337,485

 

 

 

348,302

 

 

 

303,995

 

 

 

296,124

 

Auto and light truck

 

629,780

 

 

 

603,775

 

 

 

605,258

 

 

 

552,676

 

Medium and heavy duty truck

 

255,277

 

 

 

259,740

 

 

 

248,604

 

 

 

268,636

 

Aircraft

 

957,040

 

 

 

898,401

 

 

 

900,077

 

 

 

873,770

 

Construction equipment

 

775,972

 

 

 

754,273

 

 

 

729,412

 

 

 

705,744

 

Commercial real estate

 

920,807

 

 

 

929,341

 

 

 

939,131

 

 

 

975,383

 

Residential real estate and home equity

 

510,537

 

 

 

500,590

 

 

 

492,893

 

 

 

486,156

 

Consumer

 

138,012

 

 

 

133,080

 

 

 

133,578

 

 

 

125,888

 

Total loans and leases

 

5,394,003

 

 

 

5,346,214

 

 

 

5,358,797

 

 

 

5,523,085

 

Allowance for loan and lease losses

 

(129,959

)

 

 

(127,492

)

 

 

(133,755

)

 

 

(139,550

)

Net loans and leases

 

5,264,044

 

 

 

5,218,722

 

 

 

5,225,042

 

 

 

5,383,535

 

Equipment owned under operating leases, net

 

41,792

 

 

 

48,433

 

 

 

51,478

 

 

 

61,395

 

Net premises and equipment

 

45,960

 

 

 

47,038

 

 

 

46,748

 

 

 

48,288

 

Goodwill and intangible assets

 

83,921

 

 

 

83,926

 

 

 

83,931

 

 

 

83,942

 

Accrued income and other assets

 

272,128

 

 

 

269,469

 

 

 

274,588

 

 

 

270,697

 

Total assets

$

8,012,463

 

 

$

8,096,289

 

 

$

7,964,092

 

 

$

7,511,931

 

LIABILITIES

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Noninterest-bearing demand

$

2,061,111

 

 

$

2,052,981

 

 

$

2,012,389

 

 

$

1,833,116

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest-bearing demand

 

2,430,979

 

 

 

2,455,580

 

 

 

2,358,512

 

 

 

2,068,382

 

Savings

 

1,328,981

 

 

 

1,286,367

 

 

 

1,214,088

 

 

 

1,148,823

 

Time

 

852,021

 

 

 

884,137

 

 

 

937,516

 

 

 

1,081,020

 

Total interest-bearing deposits

 

4,611,981

 

 

 

4,626,084

 

 

 

4,510,116

 

 

 

4,298,225

 

Total deposits

 

6,673,092

 

 

 

6,679,065

 

 

 

6,522,505

 

 

 

6,131,341

 

Short-term borrowings:

 

 

 

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

 

193,798

 

 

 

194,727

 

 

 

210,275

 

 

 

173,302

 

Other short-term borrowings

 

5,360

 

 

 

5,300

 

 

 

5,390

 

 

 

7,299

 

Total short-term borrowings

 

199,158

 

 

 

200,027

 

 

 

215,665

 

 

 

180,601

 

Long-term debt and mandatorily redeemable securities

 

69,563

 

 

 

71,251

 

 

 

81,301

 

 

 

81,722

 

Subordinated notes

 

58,764

 

 

 

58,764

 

 

 

58,764

 

 

 

58,764

 

Accrued expenses and other liabilities

 

92,416

 

 

 

117,718

 

 

 

129,460

 

 

 

123,744

 

Total liabilities

 

7,092,993

 

 

 

7,126,825

 

 

 

7,007,695

 

 

 

6,576,172

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Preferred stock; no par value

Authorized 10,000,000 shares; none issued or outstanding

 

 

 

 

 

 

 

 

 

 

 

Common stock; no par value

Authorized 40,000,000 shares; issued 28,205,674 shares at March 31, 2022, December 31, 2021, September 30, 2021, and March 31, 2021, respectively

 

436,538

 

 

 

436,538

 

 

 

436,538

 

 

 

436,538

 

Retained earnings

 

624,503

 

 

 

603,787

 

 

 

583,631

 

 

 

535,737

 

Cost of common stock in treasury (3,473,139, 3,466,162, 3,408,141, and 2,936,987 shares at March 31, 2022, December 31, 2021, September 30, 2021, and

March 31, 2021, respectively)

 

(115,654

)

 

 

(114,209

)

 

 

(111,253

)

 

 

(88,223

)

Accumulated other comprehensive (loss) income

 

(80,537

)

 

 

(9,861

)

 

 

2,417

 

 

 

7,243

 

Total shareholders’ equity

 

864,850

 

 

 

916,255

 

 

 

911,333

 

 

 

891,295

 

Noncontrolling interests

 

54,620

 

 

 

53,209

 

 

 

45,064

 

 

 

44,464

 

Total equity

 

919,470

 

 

 

969,464

 

 

 

956,397

 

 

 

935,759

 

Total liabilities and equity

$

8,012,463

$

8,096,289

$

7,964,092

$

7,511,931

1st SOURCE CORPORATION

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

(Unaudited - Dollars in thousands, except per share amounts)

 

 

 

 

 

Three Months Ended

 

March 31,

 

December 31,

 

March 31,

 

2022

 

2021

 

2021

Interest income:

 

 

 

 

 

Loans and leases

$

55,208

 

 

$

58,327

 

 

$

57,864

 

Investment securities, taxable

 

6,344

 

 

 

5,091

 

 

 

3,988

 

Investment securities, tax-exempt

 

134

 

 

 

133

 

 

 

174

 

Other

 

363

 

 

 

430

 

 

 

266

 

Total interest income

 

62,049

 

 

 

63,981

 

 

 

62,292

 

Interest expense:

 

 

 

 

 

Deposits

 

2,376

 

 

 

2,624

 

 

 

3,526

 

Short-term borrowings

 

24

 

 

 

25

 

 

 

36

 

Subordinated notes

 

823

 

 

 

819

 

 

 

818

 

Long-term debt and mandatorily redeemable securities

 

(792

)

 

 

446

 

 

 

500

 

Total interest expense

 

2,431

 

 

 

3,914

 

 

 

4,880

 

Net interest income

 

59,618

 

 

 

60,067

 

 

 

57,412

 

Provision (recovery of provision) for credit losses

 

2,233

 

 

 

(1,117

)

 

 

2,398

 

Net interest income after provision for credit losses

 

57,385

 

 

 

61,184

 

 

 

55,014

 

Noninterest income:

 

 

 

 

 

Trust and wealth advisory

 

5,914

 

 

 

5,949

 

 

 

5,481

 

Service charges on deposit accounts

 

2,792

 

 

 

2,867

 

 

 

2,447

 

Debit card

 

4,194

 

 

 

4,619

 

 

 

4,182

 

Mortgage banking

 

1,377

 

 

 

1,913

 

 

 

3,901

 

Insurance commissions

 

1,905

 

 

 

1,549

 

 

 

2,152

 

Equipment rental

 

3,662

 

 

 

3,817

 

 

 

4,629

 

Gains on investment securities available-for-sale

 

 

 

 

 

 

 

 

Other

 

3,301

 

 

 

3,114

 

 

 

3,077

 

Total noninterest income

 

23,145

 

 

 

23,828

 

 

 

25,869

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

25,467

 

 

 

28,128

 

 

 

25,196

 

Net occupancy

 

2,811

 

 

 

2,624

 

 

 

2,719

 

Furniture and equipment

 

1,295

 

 

 

1,589

 

 

 

1,474

 

Data processing

 

5,208

 

 

 

5,026

 

 

 

4,984

 

Depreciation – leased equipment

 

3,015

 

 

 

3,132

 

 

 

3,773

 

Professional fees

 

1,608

 

 

 

3,102

 

 

 

1,613

 

FDIC and other insurance

 

850

 

 

 

844

 

 

 

665

 

Business development and marketing

 

1,268

 

 

 

1,200

 

 

 

997

 

Loan and lease collection and repossession

 

134

 

 

 

 

 

 

129

 

Other

 

3,680

 

 

 

3,101

 

 

 

2,590

 

Total noninterest expense

 

45,336

 

 

 

48,746

 

 

 

44,140

 

Income before income taxes

 

35,194

 

 

 

36,266

 

 

 

36,743

 

Income tax expense

 

7,793

 

 

 

8,531

 

 

 

8,637

 

Net income

 

27,401

 

 

 

27,735

 

 

 

28,106

 

Net (income) loss attributable to noncontrolling interests

 

(11

)

 

 

(12

)

 

 

(1

)

Net income available to common shareholders

$

27,390

 

 

$

27,723

 

 

$

28,105

 

Per common share:

 

 

 

 

 

Basic net income per common share

$

1.10

 

 

$

1.11

 

 

$

1.10

 

Diluted net income per common share

$

1.10

 

 

$

1.11

 

 

$

1.10

 

Cash dividends

$

0.31

 

 

$

0.31

 

 

$

0.29

 

Basic weighted average common shares outstanding

 

24,743,790

 

 

 

24,775,288

 

 

 

25,320,930

 

Diluted weighted average common shares outstanding

24,743,790

 

24,775,288

25,320,930

1st SOURCE CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

INTEREST RATES AND INTEREST DIFFERENTIAL

 

 

 

 

 

 

 

 

 

 

(Unaudited - Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 2022

 

December 31, 2021

 

March 31, 2021

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

$

1,857,557

 

 

$

6,344

 

 

1.39

%

 

$

1,686,231

 

 

$

5,091

 

 

1.20

%

 

$

1,193,583

 

 

$

3,987

 

 

1.35

%

Tax exempt(1)

 

29,498

 

 

 

165

 

 

2.27

%

 

 

28,996

 

 

 

163

 

 

2.23

%

 

 

37,394

 

 

 

214

 

 

2.32

%

Mortgages held for sale

 

8,791

 

 

 

67

 

 

3.09

%

 

 

28,693

 

 

 

188

 

 

2.60

%

 

 

14,285

 

 

 

86

 

 

2.44

%

Loans and leases, net of unearned discount(1)

 

5,324,344

 

 

 

55,218

 

 

4.21

%

 

 

5,311,964

 

 

 

58,218

 

 

4.35

%

 

 

5,499,009

 

 

 

57,860

 

 

4.27

%

Other investments

 

400,058

 

 

 

363

 

 

0.37

%

 

 

659,954

 

 

 

430

 

 

0.26

%

 

 

216,280

 

 

 

266

 

 

0.50

%

Total earning assets(1)

 

7,620,248

 

 

 

62,157

 

 

3.31

%

 

 

7,715,838

 

 

 

64,090

 

 

3.30

%

 

 

6,960,551

 

 

 

62,413

 

 

3.64

%

Cash and due from banks

 

77,063

 

 

 

 

 

 

 

80,754

 

 

 

 

 

 

 

75,178

 

 

 

 

 

Allowance for loan and lease losses

 

(128,647

)

 

 

 

 

 

 

(134,217

)

 

 

 

 

 

 

(143,206

)

 

 

 

 

Other assets

 

440,074

 

 

 

 

 

 

 

448,680

 

 

 

 

 

 

 

457,890

 

 

 

 

 

Total assets

$

8,008,738

 

 

 

 

 

 

$

8,111,055

 

 

 

 

 

 

$

7,350,413

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

$

4,587,242

 

 

$

2,376

 

 

0.21

%

 

$

4,628,802

 

 

$

2,624

 

 

0.22

%

 

$

4,261,207

 

 

$

3,526

 

 

0.34

%

Short-term borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

192,108

 

 

 

23

 

 

0.05

%

 

 

194,678

 

 

 

24

 

 

0.05

%

 

 

169,180

 

 

 

35

 

 

0.08

%

Other short-term borrowings

 

5,372

 

 

 

1

 

 

0.08

%

 

 

5,474

 

 

 

1

 

 

0.07

%

 

 

7,546

 

 

 

1

 

 

0.05

%

Subordinated notes

 

58,764

 

 

 

823

 

 

5.68

%

 

 

58,764

 

 

 

819

 

 

5.53

%

 

 

58,764

 

 

 

818

 

 

5.65

%

Long-term debt and mandatorily redeemable securities

 

69,967

 

 

 

(792

)

 

(4.59

) %

 

 

71,604

 

 

 

446

 

 

2.47

%

 

 

80,967

 

 

 

500

 

 

2.50

%

Total interest-bearing liabilities

 

4,913,453

 

 

 

2,431

 

 

0.20

%

 

 

4,959,322

 

 

 

3,914

 

 

0.31

%

 

 

4,577,664

 

 

 

4,880

 

 

0.43

%

Noninterest-bearing deposits

 

2,029,627

 

 

 

 

 

 

 

2,071,773

 

 

 

 

 

 

 

1,719,264

 

 

 

 

 

Other liabilities

 

101,502

 

 

 

 

 

 

 

113,897

 

 

 

 

 

 

 

115,034

 

 

 

 

 

Shareholders’ equity

 

910,793

 

 

 

 

 

 

 

918,950

 

 

 

 

 

 

 

894,553

 

 

 

 

 

Noncontrolling interests

 

53,363

 

 

 

 

 

 

 

47,113

 

 

 

 

 

 

 

43,898

 

 

 

 

 

Total liabilities and equity

$

8,008,738

 

 

 

 

 

 

$

8,111,055

 

 

 

 

 

 

$

7,350,413

 

 

 

 

 

Less: Fully tax-equivalent adjustments

 

 

 

(108

)

 

 

 

 

 

 

(109

)

 

 

 

 

 

 

(121

)

 

 

Net interest income/margin (GAAP-derived)(1)

 

 

$

59,618

 

 

3.17

%

 

 

 

$

60,067

 

 

3.09

%

 

 

 

$

57,412

 

 

3.35

%

Fully tax-equivalent adjustments

 

 

 

108

 

 

 

 

 

 

 

109

 

 

 

 

 

 

 

121

 

 

 

Net interest income/margin - FTE(1)

 

 

$

59,726

 

 

3.18

%

 

 

 

$

60,176

 

 

3.09

%

 

 

 

$

57,533

 

 

3.35

%

(1) See “Reconciliation of Non-GAAP Financial Measures” for more information on this performance measure/ratio.

1st SOURCE CORPORATION

 

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

(Unaudited - Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

December 31,

March 31,

 

 

2022

2021

2021

Calculation of Net Interest Margin

 

 

 

(A)

Interest income (GAAP)

$

62,049

 

$

63,981

 

$

62,292

 

 

Fully tax-equivalent adjustments:

 

 

 

(B)

– Loans and leases

 

77

 

 

79

 

 

81

 

(C)

– Tax exempt investment securities

 

31

 

 

30

 

 

40

 

(D)

Interest income – FTE (A+B+C)

 

62,157

 

 

64,090

 

 

62,413

 

(E)

Interest expense (GAAP)

 

2,431

 

 

3,914

 

 

4,880

 

(F)

Net interest income (GAAP) (A-E)

 

59,618

 

 

60,067

 

 

57,412

 

(G)

Net interest income - FTE (D-E)

 

59,726

 

 

60,176

 

 

57,533

 

(H)

Annualization factor

 

4.056

 

 

3.967

 

 

4.056

 

(I)

Total earning assets

$

7,620,248

 

$

7,715,838

 

$

6,960,551

 

 

Net interest margin (GAAP-derived) (F*H)/I

 

3.17

%

 

3.09

%

 

3.35

%

 

Net interest margin – FTE (G*H)/I

 

3.18

%

 

3.09

%

 

3.35

%

 

 

 

 

 

Calculation of Efficiency Ratio

 

 

 

(F)

Net interest income (GAAP)

$

59,618

 

$

60,067

 

$

57,412

 

(G)

Net interest income – FTE

 

59,726

 

 

60,176

 

 

57,533

 

(J)

Plus: noninterest income (GAAP)

 

23,145

 

 

23,828

 

 

25,869

 

(K)

Less: gains/losses on investment securities and partnership investments

 

(444

)

 

(285

)

 

(460

)

(L)

Less: depreciation – leased equipment

 

(3,015

)

 

(3,132

)

 

(3,773

)

(M)

Total net revenue (GAAP) (F+J)

 

82,763

 

 

83,895

 

 

83,281

 

(N)

Total net revenue – adjusted (G+J–K–L)

 

79,412

 

 

80,587

 

 

79,169

 

(O)

Noninterest expense (GAAP)

 

45,336

 

 

48,746

 

 

44,140

 

(L)

Less:depreciation – leased equipment

 

(3,015

)

 

(3,132

)

 

(3,773

)

(P)

Noninterest expense – adjusted (O–L)

 

42,321

 

 

45,614

 

 

40,367

 

 

Efficiency ratio (GAAP-derived) (O/M)

 

54.78

%

 

58.10

%

 

53.00

%

 

Efficiency ratio – adjusted (P/N)

 

53.29

%

 

56.60

%

 

50.99

%

 

 

 

 

 

 

 

End of Period

 

 

March 31,

December 31,

March 31,

 

 

2022

2021

2021

Calculation of Tangible Common Equity-to-Tangible Assets Ratio

 

 

(Q)

Total common shareholders’ equity (GAAP)

$

864,850

 

$

916,255

 

$

891,295

 

(R)

Less: goodwill and intangible assets

 

(83,921

)

 

(83,926

)

 

(83,942

)

(S)

Total tangible common shareholders’ equity (Q–R)

$

780,929

 

$

832,329

 

$

807,353

 

(T)

Total assets (GAAP)

 

8,012,463

 

 

8,096,289

 

 

7,511,931

 

(R)

Less: goodwill and intangible assets

 

(83,921

)

 

(83,926

)

 

(83,942

)

(U)

Total tangible assets (T–R)

$

7,928,542

 

$

8,012,363

 

$

7,427,989

 

 

Common equity-to-assets ratio (GAAP-derived) (Q/T)

 

10.79

%

 

11.32

%

 

11.87

%

 

Tangible common equity-to-tangible assets ratio (S/U)

 

9.85

%

 

10.39

%

 

10.87

%

 

 

 

 

 

Calculation of Tangible Book Value per Common Share

 

 

 

(Q)

Total common shareholders’ equity (GAAP)

$

864,850

 

$

916,255

 

$

891,295

 

(V)

Actual common shares outstanding

 

24,732,535

 

 

24,739,512

 

 

25,268,687

 

 

Book value per common share (GAAP-derived) (Q/V)*1000

$

34.97

 

$

37.04

 

$

35.27

 

 

Tangible common book value per share (S/V)*1000

$

31.57

 

$

33.64

 

$

31.95

 

The NASDAQ Stock Market National Market Symbol: “SRCE” (CUSIP #336901 10 3)

Please contact us at

EN
21/04/2022

Underlying

To request access to management, click here to engage with our
partner Phoenix-IR's CorporateAccessNetwork.com

Reports on 1st Source Corp.

 PRESS RELEASE

1st Source Announces Two Promotions with an Eye on the Future

SOUTH BEND, Ind.--(BUSINESS WIRE)-- 1st Source Corporation and 1st Source Bank are pleased to announce that its Board of Directors has recently made two promotions with an eye on its future. This press release features multimedia. View the full release here: Chris Murphy (Photo: Business Wire) Effective December 1, 2022, Andrea G. Short, President of 1st Source Bank will also become its CEO. Christopher J. Murphy III will remain Chairman, President and CEO of 1st Source Corporation and Chairman of 1st Source Bank. In her new role, Ms. Short will have Personal Banking, Business Banking, Special...

Dave Nicoski ... (+2)
  • Dave Nicoski
  • Ross LaDuke

Vital Signs: Actionable charts

In this product we rank the most positive and negative domestic stocks, filter the symbols by market-cap and trading volume, and then divide the companies into sectors and groups. We then manually look through charts leadership/changes, bottoms-up/top-down ideas, short-term patterns that may have long-term significance, etc. We believe you will find this product valuable as significant price and relative moves begin in the daily charts.

 PRESS RELEASE

1st Source Corporation Reports Record Third Quarter Results, Cash Divi...

SOUTH BEND, Ind.--(BUSINESS WIRE)-- 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $32.74 million for the third quarter of 2022, up 0.78% from the $32.48 million reported in the third quarter a year ago, bringing the 2022 year-to-date net income to $89.44 million compared to $90.81 million in 2021. Diluted net income per common share for the third quarter of 2022 was $1.32 versus $1.29 in the third quarter of 2021. Diluted net income per common share for the first nine months of 2022 and 2021 was $3.59. At its October 20...

 PRESS RELEASE

1st Source Corporation Reports Second Quarter Results, a Record Quarte...

SOUTH BEND, Ind.--(BUSINESS WIRE)-- 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported quarterly net income of $29.31 million for the second quarter of 2022, down 3.01% from the $30.22 million reported in the second quarter a year ago, bringing the 2022 year-to-date net income to $56.70 million compared to $58.33 million in 2021. Excluding tax-effected PPP income, net income was a record $28.47 million for the quarter, up $1.06 million or 3.87% from the second quarter of 2021. Diluted net income per common share for the second quarter of 2022 was $1.18 ver...

 PRESS RELEASE

1st Source Bank Named as One of Indiana’s “Best In State Banks” by For...

SOUTH BEND, Ind.--(BUSINESS WIRE)-- Forbes recently announced the results of a survey conducted in partnership with market research firm Statista, which recognized 1st Source Bank as one of the “Best In State Banks” in Indiana. 26,000 Americans across all 50 states were asked to provide an overall satisfaction score for every bank where they hold a checking account, and they were also asked if they would recommend that bank to friends and family. Only 2.7% of all banks nationwide made the list, and 1st Source ranked #3 in Indiana. This press release features multimedia. View the full release h...

ResearchPool Subscriptions

Get the most out of your insights

Get in touch