-----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, FjC8M/0kW3C2sSyVLiTXNeMGcqnF8VVeCU63/4ugkpXXrJt6MsEWD/EKkoLL1jaY Bs79na7XMICeB6X28IltnQ== 0000034782-04-000031.txt : 20040428 0000034782-04-000031.hdr.sgml : 20040428 20040427192914 ACCESSION NUMBER: 0000034782-04-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040331 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040428 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: 04758262 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 firstqtr04_8k.txt 1ST QUARTER 2004 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): April 27, 2004 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 principal 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 April 27, 2004. ITEM 12. On April 27, 2004, 1st Source Corporation issued a press release that announced its first quarter earnings for 2004. 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. SIGNATURE 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: April 27, 2004 /s/ CHRISTOPHER J. MURPHY III ------------------------------ Christopher J. Murphy III Chairman of the Board, President and CEO Date: April 27, 2004 /s/ LARRY E. LENTYCH --------------------- Larry E. Lentych Treasurer and Chief Financial Officer Principal Accounting Officer EX-99.1 2 prfirstqtr04.txt PRESS RELEASE DATED APRIL 27, 2004 For: Immediate Release Contact: Larry Lentych April 27, 2004 574 235 2702 Andrea Short 574 235 2348 1ST SOURCE INCOME UP 13.88 PERCENT IN FIRST QUARTER, DIVIDEND REPORTED South Bend, IN -- 1st Source Corporation (Nasdaq: SRCE), parent company of 1st Source Bank, today reported net income of $5.08 million for the first quarter of 2004, up 13.88 percent over the $4.46 million in the first quarter of 2003. Diluted net income per share of common stock for the first quarter of 2004 amounted to $0.24 compared with $0.21 for the first quarter of 2003, an increase of 14.29 percent. Return on average common shareholders' equity for 1st Source Corporation was 6.43 percent compared to 5.80 percent for the first quarter of 2003, and return on average total assets was 0.63 percent compared to 0.55 percent a year ago. At their April meeting, the Board of Directors approved a first quarter cash dividend of $0.10 per common share. The cash dividend will be payable on May 17, 2004, to shareholders of record May 10, 2004, and is an increase of 11.11 percent over the first quarter cash dividend in 2003. Christopher J. Murphy III, Chairman and Chief Executive Officer, commented on the first quarter by saying, "We are pleased with the gradual improvement in our earnings and are particularly gratified by the improvement in our nonperforming assets. We have spent the last year and a half working through the collection and sale of both aircraft and automobiles from troubled customers. While we have not completed all reconditioning and sale of our nonperforming assets, the markets have stabilized and we see some improvement among customers Page 2 - April 27, 2004 1st Source Corporation in the air cargo and aircraft sales businesses as well as with our rental car customers. Margins remain tight and we continue to see significant volatility in the valuation of our mortgage servicing rights due to the variability of historically low mortgage rates and the resulting high mortgage refinance volumes," Murphy concluded. As of March 31, 2004, the common equity-to-assets ratio for 1st Source was 9.93 percent, up from 9.57 percent a year ago. Common shareholders' equity was $319.86 million, up 2.02 percent from March 31, 2003. At the end of the first quarter of 2004, total assets were $3.22 billion, down 1.62 percent from a year ago. Loans increased 2.80 percent and deposits decreased 7.43 percent from a year ago. For the first quarter of 2004, 1st Source's provision for loan losses was $0.10 million as compared to $5.55 million for the first quarter of 2003. Net charge-offs were $0.10 million for the first quarter of 2004 compared to $2.93 million in the first quarter of 2003. The resulting reserve for loan losses as of March 31, 2004, was 3.22 percent of total loans, compared to 2.92 percent as of March 31, 2003. The ratio of nonperforming assets to net loans and leases was 1.45 percent on March 31, 2004, compared to 3.13 percent for the same period last year. Tax-equivalent net interest income was $26.48 million for the first quarter, down 3.06 percent from 2003's first quarter, and the net interest margin was 3.53 percent versus 3.72 percent in the first quarter of 2003. Noninterest income for the first quarter 2004 was $14.02 million, down 30.04 percent from the first quarter of 2003. The predominant factor behind the decrease was a reduction of loan servicing and sale income. Loan servicing and sale income decreased due to a reduction in mortgage origination volumes, decreased gains on sales of mortgage loans into the secondary market and increased mortgage servicing rights impairment. Mortgage servicing rights impairment was $3.23 million in the first quarter of 2004 versus $1.78 million for the same period in 2003. Noninterest expense was $32.34 million for the first quarter 2004, down 7.07 percent from the first quarter of 2003, primarily due to decreased salaries and employee benefits, and decreased loan collection and repossession expense, which were offset by increased professional fees. Page 3 - April 27, 2004 1st Source Corporation Salaries and employee benefits decreased mainly because of the capitalization of $1.26 million in salaries and benefits in connection with the deferral of loan origination costs in the first quarter of 2004 and decreased mortgage commissions. These decreases were partially offset by higher executive incentive accruals and increased group insurance costs. Loan collection and repossession expense decreased as valuation adjustments and other expenses related to repossessed assets decreased. 1st Source is the largest locally controlled 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 highly personalized services. 1st Source Bank also competes for business nationally by offering specialized financing services for used private and cargo aircraft, automobiles for leasing and rental agencies, medium and heavy duty trucks, construction and environmental equipment. The corporation includes 61 banking centers in 15 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 Bank 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 FTN Midwest Research Securities; Goldman, Sachs & Company; Keefe, Bruyette & Woods, Inc.; Morgan Stanley & Company, Inc.; NatCity Investments, Inc.; Prudential Equity Group, Inc.; RBC Dain Rauscher, Inc.; Sandler O'Neill & Partners; Stifel, Nicolaus & Company, Inc.; and William Blair & Company. A portion of 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 first quarter 2004 on the floating rate securities is 3.21 percent. Marketmakers in those securities are Goldman, Sachs & Company; Howe, Barnes Investments, Inc.; Schwab Capital Markets; and Stifel, Nicolaus & Company, Incorporated. Page 4 - April 27, 2004 1st Source Corporation 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. 1ST SOURCE CORPORATION PAGE 5 1ST QUARTER 2004 FINANCIAL HIGHLIGHTS (UNAUDITED-DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) 3 MONTHS ENDED MARCH 31 2004 2003 ----------- ----------- END OF PERIOD BALANCES Assets $ 3,222,713 $3,275,846 Loans 2,176,113 2,116,913 Deposits 2,403,990 2,597,056 Reserve for loan losses 70,045 61,843 Intangible assets 25,561 27,691 Common shareholders' equity 319,860 313,542 AVERAGE BALANCES Assets $ 3,250,559 $3,273,880 Earning assets 3,016,130 2,976,799 Investments 740,804 656,181 Loans 2,199,040 2,151,832 Deposits 2,413,793 2,582,992 Interest bearing liabilities 2,514,040 2,516,345 Common shareholders' equity 317,571 311,818 INCOME STATEMENT DATA Net interest income $ 25,762 $ 26,556 Net interest income - FTE 26,475 27,312 Provision for loan losses 101 5,550 Noninterest income 14,019 20,039 Noninterest expense 32,342 34,802 Net income 5,079 4,460 PER SHARE DATA Basic net income per common share $ 0.25 $ 0.21 Diluted net income per common share 0.24 0.21 Cash dividends 0.100 0.090 Book value per common share 15.42 14.88 Market value - High 24.900 17.520 Market value - Low 20.960 12.800 Basic weighted average common shares outstanding 20,727,035 21,000,317 Diluted weighted average common shares outstanding 21,035,918 21,331,419 KEY RATIOS Return on average assets 0.63% 0.55% Return on average common shareholders' equity 6.43 5.80 Average common shareholders' equity to average assets 9.77 9.52 End of period tangible common equity to tangible assets 9.21 8.80 Net interest margin 3.53 3.72 Efficiency: expense to revenue 76.79 69.65 Net charge offs to average loans 0.02 0.55 Loan loss reserve to loans 3.22 2.92 Nonperforming assets to loans and leases 1.45 3.13 ASSET QUALITY Loans past due 90 days or more $ 230 $ 569 Non-accrual loans 23,356 39,297 Other real estate owned 2,541 5,667 Repossessions 6,235 22,734 Equipment owned under operating leases 280 1,563 Total nonperforming assets 32,642 69,830 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION PAGE 6 1st Source Corporation and Subsidiaries (Unaudited-Dollars in thousands) March 31, March 31, 2004 2003 ---------------------------- ASSETS Cash and due from banks $ 78,134 $ 125,880 Federal funds sold and interest bearing deposits with other banks 1,055 1,693 Investment securities available-for-sale (amortized cost of $723,011 and $651,935 at March 31, 2004 and 2003, respectively) 729,924 659,010 Trading account securities - 13,539 Mortgages held for sale 81,650 146,932 Loans - net of unearned discount Commercial and agricultural 407,166 430,379 Auto , light truck and environmental equipment 244,444 249,076 Medium and heavy duty truck 224,912 201,498 Aircraft financing 458,788 295,428 Construction equipment financing 211,388 290,341 Loans secured by real estate 538,066 548,487 Consumer loans 91,349 101,704 ------------ ------------- Total loans 2,176,113 2,116,913 Reserve for loan losses (70,045) (61,843) ------------ ------------- Net loans 2,106,068 2,055,070 Equipment owned under operating leases, net of accumulated depreciation 62,994 87,157 Premises and equipment 38,093 40,120 Accrued income and other assets 124,795 146,445 ------------ ------------- Total assets $ 3,222,713 $ 3,275,846 ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Noninterest bearing $ 378,209 $ 425,924 Interest bearing 2,025,781 2,171,132 ------------ ------------- Total deposits 2,403,990 2,597,056 Federal funds purchased and securities sold under agreements to repurchase 248,779 199,538 Other short-term borrowings 109,842 40,327 Long-term debt and mandatorily redeemable securities 23,181 17,390 Subordinated notes 56,444 54,750 Accrued expenses and other liabilities 60,617 53,243 ------------ ------------- Total liabilities 2,902,853 2,962,304 Shareholders' equity: Preferred stock-no par value - - Common stock-no par value 7,578 7,578 Capital surplus 214,001 214,001 Retained earnings 103,529 93,123 Cost of common stock in treasury (9,512) (5,552) Accumulated other comprehensive income 4,264 4,392 ------------ ------------- Total shareholders' equity 319,860 313,542 ------------ ------------- Total liabilities and shareholders' equity $ 3,222,713 $ 3,275,846 ============ ============= 1ST SOURCE CORPORATION PAGE 7 CONSOLIDATED STATEMENTS OF INCOME 1st Source Corporation and Subsidiaries (Unaudited - Dollars in thousands, except per share amounts) Three Months Ended March 31, 2004 2003 ----------------------------- INTEREST AND FEE INCOME: Loans $ 32,454 $ 36,610 Investment securities: Taxable 4,289 4,534 Tax-exempt 1,317 1,435 Other 65 150 ----------------------------- Total interest income 38,125 42,729 INTEREST EXPENSE: Deposits 9,823 13,771 Short-term borrowings 1,257 1,264 Subordinated notes 961 940 Long-term debt and mandatorily redeemable securities 322 198 ----------------------------- Total interest expense 12,363 16,173 ----------------------------- Net interest income 25,762 26,556 Provision for loan losses 101 5,550 ----------------------------- Net interest income after provision for loan losses 25,661 21,006 NONINTEREST INCOME: Trust fees 3,090 2,640 Service charges on deposit accounts 3,706 3,724 Loan servicing and sale income (1,785) 3,206 Equipment rental income 5,824 6,771 Other income 3,436 3,978 Investment securities and other investment losses (252) (280) ----------------------------- Total noninterest income 14,019 20,039 ----------------------------- NONINTEREST EXPENSE: Salaries and employee benefits 15,754 17,247 Net occupancy expense 1,833 1,864 Furniture and equipment expense 2,584 2,641 Depreciation - leased equipment 4,536 5,358 Supplies and communication 1,432 1,511 Loan collection and repossession expense 1,055 1,871 Other expense 5,148 4,310 ----------------------------- Total noninterest expense 32,342 34,802 ----------------------------- Income before taxes 7,338 6,243 Income tax expense 2,259 1,783 ----------------------------- NET INCOME $ 5,079 $ 4,460 ============================= The Nasdaq Stock Market Symbol: "SRCE" (CUSIP # 336901 10 3) Please contact us at shareholder@1stsource.com -----END PRIVACY-ENHANCED MESSAGE-----