-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FXJek0gQNG276jdaJOjs0XcQc6PaBuXBdy8x26bmRPh3TvVLRay690md3a4+FzVs aJnce1MPv5s1qpbpmlU+hg== 0000034782-03-000043.txt : 20031030 0000034782-03-000043.hdr.sgml : 20031030 20031030172254 ACCESSION NUMBER: 0000034782-03-000043 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030930 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031030 FILER: COMPANY DATA: COMPANY CONFORMED NAME: 1ST SOURCE CORP CENTRAL INDEX KEY: 0000034782 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 351068133 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-06233 FILM NUMBER: 03967522 BUSINESS ADDRESS: STREET 1: 100 NORTH MICHIGAN STREET CITY: SOUTH BEND STATE: IN ZIP: 46601 BUSINESS PHONE: 5742352702 MAIL ADDRESS: STREET 1: P O BOX 1602 STREET 2: P O BOX 1602 CITY: SOUTH BEND STATE: IN ZIP: 46634 FORMER COMPANY: FORMER CONFORMED NAME: FBT BANCORP INC DATE OF NAME CHANGE: 19820818 8-K 1 thirdquarter8k.txt 1ST SOURCE CORPORATION 3RD QUARTER 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 30, 2003 1st Source Corporation (Exact name of registrant as specified in its charter) Indiana 0-6233 35-1068133 (State or other jurisdiction of (Commission File No.) (I.R.S. Employer incorporation or organization) Identification No.) 100 North Michigan Street, South Bend, Indiana 46601 (Address and zip code of principle executive offices) (Zip Code) 574-235-2702 (Registrant's telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits 99.1 Press release dated October 30, 2003. ITEM 12. On October 30, 2003, 1st Source Corporation issued a press release that announced its third quarter earnings for 2003. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. The information in the preceding paragraph, as well as Exhibit 99.1 referenced therein, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 1st SOURCE CORPORATION (Registrant) Date: October 30, 2003 /s/Christopher J. Murphy III - ----- ---------------- ---------------------------- Christopher J. Murphy III Chairman of the Board, President and CEO Date: October 30, 2003 /s/Larry E. Lentych - ----- ---------------- ------------------- Larry E. Lentych Treasurer and Chief Financial Officer Principal Accounting Officer EX-99 3 thirdquarter8_k.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 For: Immediate Release Contact: Larry Lentych October 30, 2003 574 235 2702 Andrea Short 574 235 2348 THIRD QUARTER EARNINGS, CASH DIVIDEND ANNOUNCED FOR 1ST SOURCE CORPORATION South Bend, IN -- 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today reported net income of $4.64 million for the third quarter of 2003, a 120.99 percent increase over the $2.10 million for the third quarter of 2002. During the first nine months of 2003, net income for 1st Source Corporation was $13.79 million, up 51.97 percent over the $9.08 million reported for the same period in 2002. Diluted net income per common share for the third quarter of 2003 amounted to $0.22, up 120.00 percent compared to $0.10 for the third quarter of 2002. Diluted net income per common share for the first three quarters of 2003 was $0.65 versus $0.43, an increase of 51.16 percent over the same period a year ago. Earnings for the third quarter of 2003 represent a return on average common shareholders' equity of 5.83 percent, compared to 2.68 percent for the third quarter of 2002. Return on average total assets for the third quarter of 2003 was 0.56 percent, compared to 0.25 percent for the third quarter of 2002. Christopher J. Murphy III, Chairman and Chief Executive Officer, reported that at its October meeting, the Board of Directors approved a cash dividend increase for the third quarter to $0.10 per share. The cash dividend will be payable on November 17, 2003 to shareholders of record on November 10, 2003. The cash dividend is an 11.11 percent increase over the third quarter cash dividend in 2002. Mr. Murphy commented, "While we are pleased with the improvement in our earnings and credit quality for the quarter over last year, we are still quite cautious about the future. Interest rate margins have tightened and loan growth is almost non-existent. This has permitted us to allow wholesale funding to mature and roll off. As a result, we have very strong liquidity and rely on almost no brokered CDs, public funds, or other wholesale funding. Today, virtually everything on our balance sheet in the deposit or funding categories is essentially core funding. On the credit side, we have seen improvements in the market for used aircraft, and cash flows have improved somewhat for many of our equipment customers. For the quarter, our charge-offs and provisions were down significantly and our ratio of nonperforming assets to net loans and leases improved nicely." 1 Mr. Murphy continued, "Our branches are performing well, and based on recent market studies, we continue to enjoy dominant market deposit share in our 15 county area. Also, recently released government data highlights our continued strength in the small business, home improvement and mortgage financing sectors of our market. One of the most exciting things for us this past quarter was the introduction of InfoSource Online, our free online service for personal checking account customers. The overwhelmingly positive response of our customers to the new service reinforces our strategy of keeping our customers' best interests in mind and providing straight talk and sound advice." The provision for loan losses was $4.08 million in the third quarter of 2003 compared to $8.77 million in the third quarter of 2002. 1st Source's reserve for loan losses as of September 30, 2003 was 3.13 percent of total loans, compared to 2.60 percent as of September 30, 2002. Net charge-offs were $4.05 million for the third quarter 2003, compared to $7.24 million in the same quarter last year. The ratio of nonperforming assets to net loans and leases was 2.20 percent on September 30, 2003 compared to 3.44 percent on September 30, 2002. Noninterest income for the third quarter of 2003 was $18.85 million, up 20.79 percent from the third quarter of 2002. For the first nine months of 2003, noninterest income was $60.81 million, up 16.42 percent from 2002. The predominant factor behind the growth in 2003 was mortgage loan servicing and sale income, which reached near record levels in the first nine months of 2003. This increase was partially offset by a decrease in equipment rental income and the recording of $2.74 million of securitization impairment. The majority of this impairment is due to a change during the quarter in assumptions concerning the timing of future cash flows from the 1998 1st Source Master Trust Securitization to 1st Source Bank, as recorded under SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Noninterest expense was $32.70 million for the third quarter, compared to $33.51 million for the third quarter of 2002. For the first nine months, noninterest expense was $104.78 million, compared to $99.42 million for the same period in 2002. In general, year to date 2003 noninterest expense reflects higher personnel expense and an increase in expenses related to loan collection and repossessions. As of September 30, 2003, the 1st Source common equity-to-assets ratio was 9.95 percent compared to 9.08 percent a year ago. Common shareholders' equity was $318.87 million, up 2.53 percent from the $310.99 million reported a year ago. Total assets at the end of the third quarter of 2003 were $3.21 billion, down 6.36 percent from the same time last year. Total deposits were down 9.72 percent while total loans were down 10.72 percent over the comparable figures at the end of the third quarter of 2002. 2 1st Source Corporation 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 and cargo aircraft, automobiles for leasing and rental agencies, heavy duty trucks, construction and environmental equipment. The corporation includes 60 banking centers in fifteen counties, 7 Trustcorp Mortgage offices in Indiana, Ohio and Michigan, and 22 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 Dain Rauscher, Inc.; Goldman, Sachs & Company; Howe Barnes Investments, Inc.; Keefe, Bruyette & Woods, Inc.; Merrill Lynch, Pierce, Fenner; Morgan Stanley & Company; NatCity Investments; Sandler O'Neill & Partners; Schwab Capital Markets; Stifel, Nicolaus & Company, Incorporated; and William Blair & Company. 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 fourth quarter, 2003 on the floating rate securities is 3.19 percent. Marketmakers in those securities are Goldman, Sachs & Company; Howe, Barnes Investments, Inc.; Schwab Capital Markets; and Stifel, Nicolaus & Company, Incorporated. Except for historical information contained herein, the matters discussed in this document express "forward-looking statements." Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" 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. 3
1ST SOURCE CORPORATION 3rd QUARTER 2003 FINANCIAL HIGHLIGHTS (Unaudited-Dollars in thousands except Per Share Data) 3 Months Ended 9 Months Ended September September 2003 2002 2003 2002 END OF PERIOD BALANCES Assets $ 3,206,248 $ 3,424,104 Loans 2,020,621 2,263,357 Deposits 2,493,037 2,761,384 Reserve for Loan Losses 63,222 58,946 Intangible Assets 26,386 28,624 Common Shareholders' Equity 318,868 310,986 AVERAGE BALANCES Assets $ 3,282,485 $ 3,396,561 $ 3,285,343 $ 3,454,035 Earning Assets 3,013,994 3,079,337 3,001,550 3,138,744 Investments 696,463 630,098 674,420 640,717 Loans 2,069,261 2,320,707 2,110,811 2,369,284 Deposits 2,591,080 2,699,788 2,599,827 2,751,175 Interest Bearing Liabilities 2,465,260 2,672,602 2,494,002 2,743,578 Common Shareholders' Equity 316,086 311,451 314,628 310,754 INCOME STATEMENT DATA Net Interest Income $ 24,544 $ 29,142 $ 77,840 $ 89,635 Net Interest Income - FTE 25,285 29,903 80,101 91,997 Provision for Loan Losses 4,078 8,765 14,529 31,324 Noninterest Income 18,854 15,609 60,811 52,233 Noninterest Expense 32,704 33,512 104,781 99,420 Net Income 4,643 2,101 13,793 9,076 PER SHARE DATA Basic Net Income Per Common Share $ 0.23 $ 0.10 $ 0.66 $ 0.43 Diluted Net Income per Common Share 0.22 0.10 0.65 0.43 Cash Dividends 0.090 0.090 0.270 0.270 Book Value Per Common Share 15.13 14.84 15.13 14.84 Market Value - High 21.800 24.575 21.800 26.890 Market Value - Low 17.000 13.540 12.570 13.540 Basic Weighted Average Common Shares Outstanding 21,076,921 20,963,707 21,050,008 20,927,734 Diluted Weighted Average Common Shares Outstanding 21,435,717 21,346,977 21,381,398 21,316,672 KEY RATIOS Return on Average Assets 0.56% 0.25% 0.56% 0.35% Return on Average Common Shareholders' Equity 5.83 2.68 5.86 3.90 Average Common Shareholders' Equity to Average Assets 9.63 9.17 9.58 9.00 End of Period Tangible Common Equity to Tangible Assets 9.20 8.32 9.20 8.32 Net Interest Margin 3.33 3.85 3.57 3.92 Efficiency: Expense to Revenue 65.71 68.79 69.23 63.99 Net Charge Offs to Average Loans 0.78 1.24 0.67 1.69 Loan Loss Reserve to Loans 3.13 2.60 3.13 2.60 Nonperforming Assets to Loans and Leases 2.20 3.44 2.20 3.44 ASSET QUALITY Loans Past Due 90 Days or More $ 353 $ 309 Non-accrual Loans 32,865 54,685 Other Real Estate 3,111 4,873 Repossessions 9,369 19,536 Equipment Owned Under Operating Leases 305 1,888 Total Nonperforming Assets 46,003 81,291
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 1ST SOURCE CORPORATION AND SUBSIDIARIES (UNAUDITED - DOLLARS IN THOUSANDS) September 30, September 30, 2003 2002 ------------------------------- ASSETS Cash and due from banks $ 103,256 $ 118,762 Federal funds sold and interest bearing deposits with other banks 66,109 61,162 Investment securities available-for-sale (amortized cost of $754,106 and $620,169 at September 30, 2003 and September 30, 2002, respectively) 760,865 628,261 Trading account securities 10,822 -- Mortgages held for sale 67,496 128,061 Loans - net of unearned discount Commercial and agricultural 406,096 442,297 Truck and automobile financing 480,196 435,961 Aircraft financing 273,149 352,206 Construction equipment financing 241,945 324,822 Loans secured by real estate 522,852 593,310 Consumer loans 96,383 114,761 ------------------------------- Total loans 2,020,621 2,263,357 Reserve for loan losses (63,222) (58,946) ------------------------------- Net loans 1,957,399 2,204,411 Equipment owned under operating leases, net of accumulated depreciation 74,916 101,560 Net premises and equipment 38,488 42,077 Other assets 126,897 139,810 ------------------------------- Total assets $3,206,248 $3,424,104 =============================== LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Noninterest bearing $ 404,544 $ 399,848 Interest bearing 2,088,493 2,361,536 ------------------------------- Total deposits 2,493,037 2,761,384 Federal funds purchased and securities sold under agreements to repurchase 223,405 203,457 Other short-term borrowings 43,533 48,466 Long-term debt 16,994 11,698 Subordinated notes 56,444 44,750 Other liabilities 53,967 43,363 ------------------------------- Total liabilities 2,887,380 3,113,118 Shareholders' equity: Preferred stock-no par value - - Common stock-no par value 7,578 7,579 Capital surplus 214,001 214,001 Retained earnings 98,528 91,853 Cost of common stock in treasury (5,409) (7,462) Accumulated other comprehensive income 4,170 5,015 ------------------------------- Total shareholders' equity 318,868 310,986 ------------------------------- Total liabilities and shareholders' equity $3,206,248 $3,424,104 ===============================
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CONSOLIDATED STATEMENTS OF INCOME 1ST SOURCE CORPORATION AND SUBSIDIARIES (UNAUDITED - DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30 September 30 ------------------------ ------------------------- 2003 2002 2003 2002 ------------------------ ------------------------- Interest and Fee Income: Loans $ 33,063 $ 42,233 $ 105,776 $ 130,557 Investment securities: Taxable 4,205 5,122 13,449 16,444 Tax-exempt 1,386 1,463 4,266 4,555 Other 337 41 782 239 ------------------------ ------------------------- TOTAL INTEREST INCOME 38,991 48,859 124,273 151,795 Interest Expense: Deposits 11,919 17,129 38,877 55,035 Short-term borrowings 1,386 1,586 4,148 4,114 Subordinated notes 961 789 2,842 2,374 Long-term debt 181 213 566 637 ------------------------ ------------------------- TOTAL INTEREST EXPENSE 14,447 19,717 46,433 62,160 ------------------------ ------------------------- NET INTEREST INCOME 24,544 29,142 77,840 89,635 Provision for loan losses 4,078 8,765 14,529 31,324 ------------------------ ------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 20,466 20,377 63,311 58,311 Noninterest Income: Trust fees 2,643 2,606 8,019 7,927 Service charges on deposit accounts 4,010 3,833 11,656 10,988 Loan servicing and sale income 5,786 (1,025) 13,437 2,554 Equipment rental income 6,217 7,157 19,443 21,901 Other income 3,332 3,638 11,945 9,951 Investment securities and other investment losses (3,134) (600) (3,689) (1,088) ------------------------ ------------------------- TOTAL NONINTEREST INCOME 18,854 15,609 60,811 52,233 ------------------------ ------------------------- Noninterest Expense: Salaries and employee benefits 17,195 16,792 52,732 49,787 Net occupancy expense 1,726 1,745 5,375 5,125 Furniture and equipment expense 2,601 2,537 7,919 7,892 Depreciation - leased equipment 4,789 5,744 15,197 17,857 Supplies and communication 1,532 1,614 4,601 4,875 Loan collection and repossession expense 291 1,224 5,861 3,099 Other 4,570 3,856 13,096 10,785 ------------------------ ------------------------- TOTAL NONINTEREST EXPENSE 32,704 33,512 104,781 99,420 ------------------------ ------------------------- INCOME BEFORE INCOME TAXES 6,616 2,474 19,341 11,124 Income taxes 1,973 373 5,548 2,048 ------------------------ ------------------------- NET INCOME $ 4,643 $ 2,101 $ 13,793 $ 9,076 ======================== =========================
The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP #336901 10 3). Please contact us at Shareholder@1stsource.com. 6 -----END PRIVACY-ENHANCED MESSAGE-----