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 20, 2016 | ||
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1st Source Corporation | ||
(Exact name of registrant as specified in its charter) | ||
Indiana | 0-6233 | 35-1068133 |
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
100 North Michigan Street, South Bend, Indiana 46601 | ||
(Address of principal executive offices) (Zip Code) | ||
574-235-2000 | ||
(Registrant's telephone number, including area code) | ||
Not Applicable | ||
(Former name or former address, if changed since last report) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
1st SOURCE CORPORATION | ||
(Registrant) | ||
Date: October 20, 2016 | /s/ CHRISTOPHER J. MURPHY III | |
Christopher J. Murphy III | ||
Chairman of the Board and CEO | ||
Date: October 20, 2016 | /s/ ANDREA G. SHORT | |
Andrea G. Short | ||
Treasurer and Chief Financial Officer | ||
Principal Accounting Officer |
For: | Immediate Release | Contact: | Andrea Short |
October 20, 2016 | 574-235-2000 |
• | Net income improved to $14.26 million and diluted net income per common share improved to $0.55 from the prior year's quarter. |
• | Return on average assets of 1.05% and return on average common shareholders' equity of 8.47%. |
• | Net charge-offs of $4.63 million and nonperforming assets to loans and leases of 0.68%. |
• | Average loans and leases grew $278.36 million or 7.12% from the third quarter of 2015. |
• | Average deposits grew $357.46 million or 8.95% from the third quarter of 2015. |
• | Net interest income increased $0.49 million or 1.15% from the third quarter of 2015. |
• | Noninterest income increased $1.53 million or 7.25% from the third quarter of 2015 (increased 4.96% excluding equipment rental income). |
• | Noninterest expenses increased slightly from the third quarter of 2015 (decreased 1.75% excluding leased equipment depreciation). |
1st SOURCE CORPORATION | ||||||||||||||||
3rd QUARTER 2016 FINANCIAL HIGHLIGHTS | ||||||||||||||||
(Unaudited - Dollars in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
AVERAGE BALANCES | ||||||||||||||||
Assets | $ | 5,425,530 | $ | 5,343,630 | $ | 5,061,350 | $ | 5,326,670 | $ | 4,946,899 | ||||||
Earning assets | 5,066,375 | 4,986,635 | 4,733,336 | 4,972,604 | 4,627,111 | |||||||||||
Investments | 821,068 | 804,856 | 781,971 | 806,976 | 787,343 | |||||||||||
Loans and leases | 4,189,340 | 4,105,111 | 3,910,981 | 4,101,284 | 3,795,929 | |||||||||||
Deposits | 4,353,253 | 4,300,402 | 3,995,795 | 4,269,284 | 3,913,931 | |||||||||||
Interest bearing liabilities | 3,734,322 | 3,709,706 | 3,489,505 | 3,683,863 | 3,435,444 | |||||||||||
Common shareholders’ equity | 670,006 | 659,092 | 638,965 | 659,603 | 631,611 | |||||||||||
INCOME STATEMENT DATA | ||||||||||||||||
Net interest income | $ | 42,694 | $ | 42,293 | $ | 42,209 | $ | 126,276 | $ | 123,310 | ||||||
Net interest income - FTE(1) | 43,144 | 42,753 | 42,625 | 127,647 | 124,551 | |||||||||||
Provision for loan and lease losses | 2,067 | 2,049 | 992 | 5,091 | 2,160 | |||||||||||
Noninterest income | 22,665 | 22,297 | 21,132 | 66,589 | 62,414 | |||||||||||
Noninterest expense | 41,145 | 40,034 | 41,068 | 121,884 | 117,370 | |||||||||||
Net income | 14,264 | 14,479 | 13,928 | 42,561 | 43,069 | |||||||||||
PER SHARE DATA | ||||||||||||||||
Basic net income per common share | $ | 0.55 | $ | 0.56 | $ | 0.53 | $ | 1.63 | $ | 1.63 | ||||||
Diluted net income per common share | 0.55 | 0.56 | 0.53 | 1.63 | 1.63 | |||||||||||
Common cash dividends declared | 0.180 | 0.180 | 0.164 | 0.540 | 0.491 | |||||||||||
Book value per common share | 25.91 | 25.59 | 24.51 | 25.91 | 24.51 | |||||||||||
Tangible book value per common share(1) | 22.65 | 22.32 | 21.26 | 22.65 | 21.26 | |||||||||||
Market value - High | 35.99 | 34.83 | 32.37 | 35.99 | 32.37 | |||||||||||
Market value - Low | 31.50 | 30.32 | 28.06 | 27.01 | 26.95 | |||||||||||
Basic weighted average common shares outstanding | 25,867,169 | 25,853,537 | 26,164,646 | 25,881,360 | 26,211,630 | |||||||||||
Diluted weighted average common shares outstanding | 25,867,169 | 25,853,537 | 26,164,646 | 25,881,360 | 26,211,630 | |||||||||||
KEY RATIOS | ||||||||||||||||
Return on average assets | 1.05 | % | 1.09 | % | 1.09 | % | 1.07 | % | 1.16 | % | ||||||
Return on average common shareholders’ equity | 8.47 | 8.84 | 8.65 | 8.62 | 9.12 | |||||||||||
Average common shareholders’ equity to average assets | 12.35 | 12.33 | 12.62 | 12.38 | 12.77 | |||||||||||
End of period tangible common equity to tangible assets(1) | 10.93 | 10.90 | 11.04 | 10.93 | 11.04 | |||||||||||
Risk-based capital - Common Equity Tier 1(2) | 12.35 | 12.20 | 12.48 | 12.35 | 12.48 | |||||||||||
Risk-based capital - Tier 1(2) | 13.56 | 13.41 | 13.77 | 13.56 | 13.77 | |||||||||||
Risk-based capital - Total(2) | 14.87 | 14.73 | 15.08 | 14.87 | 15.08 | |||||||||||
Net interest margin | 3.35 | 3.41 | 3.54 | 3.39 | 3.56 | |||||||||||
Net interest margin - FTE(1) | 3.39 | 3.45 | 3.57 | 3.43 | 3.60 | |||||||||||
Efficiency ratio: expense to revenue | 62.95 | 61.98 | 64.84 | 63.20 | 63.20 | |||||||||||
Efficiency ratio: expense to revenue - adjusted(1) | 60.10 | 58.76 | 61.98 | 60.36 | 60.57 | |||||||||||
Net charge offs to average loans and leases | 0.44 | (0.01 | ) | — | 0.14 | (0.01 | ) | |||||||||
Loan and lease loss reserve to loans and leases | 2.13 | 2.20 | 2.22 | 2.13 | 2.22 | |||||||||||
Nonperforming assets to loans and leases | 0.68 | 0.49 | 0.66 | 0.68 | 0.66 | |||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||
END OF PERIOD BALANCES | ||||||||||||||||
Assets | $ | 5,447,911 | $ | 5,379,938 | $ | 5,245,610 | $ | 5,187,916 | $ | 5,105,584 | ||||||
Loans and leases | 4,179,417 | 4,152,763 | 4,031,975 | 3,994,692 | 3,955,550 | |||||||||||
Deposits | 4,377,038 | 4,325,084 | 4,225,148 | 4,139,186 | 4,019,156 | |||||||||||
Reserve for loan and lease losses | 88,897 | 91,458 | 89,296 | 88,112 | 87,616 | |||||||||||
Goodwill and intangible assets | 84,244 | 84,386 | 84,530 | 84,676 | 84,822 | |||||||||||
Common shareholders’ equity | 670,259 | 661,756 | 649,973 | 644,053 | 639,221 | |||||||||||
ASSET QUALITY | ||||||||||||||||
Loans and leases past due 90 days or more | $ | 611 | $ | 275 | $ | 728 | $ | 122 | $ | 411 | ||||||
Nonaccrual loans and leases | 19,922 | 12,579 | 12,982 | 12,718 | 18,985 | |||||||||||
Other real estate | 551 | 452 | 330 | 736 | 232 | |||||||||||
Former bank premises held for sale | — | — | — | — | 515 | |||||||||||
Repossessions | 8,089 | 7,619 | 7,201 | 6,927 | 6,602 | |||||||||||
Equipment owned under operating leases | 43 | 107 | 113 | 121 | 146 | |||||||||||
Total nonperforming assets | $ | 29,216 | $ | 21,032 | $ | 21,354 | $ | 20,624 | $ | 26,891 |
1st SOURCE CORPORATION | |||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||||||||||||||
(Unaudited - Dollars in thousands) | |||||||||||||||
September 30, | June 30, | December 31, | September 30, | ||||||||||||
2016 | 2016 | 2015 | 2015 | ||||||||||||
ASSETS | |||||||||||||||
Cash and due from banks | $ | 65,724 | $ | 58,944 | $ | 65,171 | $ | 61,124 | |||||||
Federal funds sold and interest bearing deposits with other banks | 30,100 | 14,297 | 14,550 | 3,065 | |||||||||||
Investment securities available-for-sale | 828,615 | 814,258 | 791,727 | 784,585 | |||||||||||
Other investments | 22,458 | 21,973 | 21,973 | 21,728 | |||||||||||
Mortgages held for sale | 19,986 | 15,924 | 9,825 | 9,187 | |||||||||||
Loans and leases, net of unearned discount: | |||||||||||||||
Commercial and agricultural | 786,167 | 759,175 | 744,749 | 750,780 | |||||||||||
Auto and light truck | 400,809 | 457,586 | 425,236 | 423,147 | |||||||||||
Medium and heavy duty truck | 271,478 | 273,674 | 278,254 | 264,784 | |||||||||||
Aircraft | 836,977 | 822,842 | 778,012 | 794,129 | |||||||||||
Construction equipment | 498,086 | 484,354 | 455,565 | 450,112 | |||||||||||
Commercial real estate | 744,972 | 715,932 | 700,268 | 658,589 | |||||||||||
Residential real estate and home equity | 490,186 | 482,979 | 464,129 | 463,824 | |||||||||||
Consumer | 150,742 | 156,221 | 148,479 | 150,185 | |||||||||||
Total loans and leases | 4,179,417 | 4,152,763 | 3,994,692 | 3,955,550 | |||||||||||
Reserve for loan and lease losses | (88,897 | ) | (91,458 | ) | (88,112 | ) | (87,616 | ) | |||||||
Net loans and leases | 4,090,520 | 4,061,305 | 3,906,580 | 3,867,934 | |||||||||||
Equipment owned under operating leases, net | 117,883 | 119,312 | 110,371 | 95,785 | |||||||||||
Net premises and equipment | 54,654 | 54,506 | 53,191 | 51,252 | |||||||||||
Goodwill and intangible assets | 84,244 | 84,386 | 84,676 | 84,822 | |||||||||||
Accrued income and other assets | 133,727 | 135,033 | 129,852 | 126,102 | |||||||||||
Total assets | $ | 5,447,911 | $ | 5,379,938 | $ | 5,187,916 | $ | 5,105,584 | |||||||
LIABILITIES | |||||||||||||||
Deposits: | |||||||||||||||
Noninterest bearing | $ | 992,776 | $ | 944,626 | $ | 902,364 | $ | 914,152 | |||||||
Interest-bearing deposits: | |||||||||||||||
Interest-bearing demand | 1,417,692 | 1,391,823 | 1,350,417 | 1,315,809 | |||||||||||
Savings | 799,891 | 779,899 | 745,661 | 735,710 | |||||||||||
Time | 1,166,679 | 1,208,736 | 1,140,744 | 1,053,485 | |||||||||||
Total interest-bearing deposits | 3,384,262 | 3,380,458 | 3,236,822 | 3,105,004 | |||||||||||
Total deposits | 4,377,038 | 4,325,084 | 4,139,186 | 4,019,156 | |||||||||||
Short-term borrowings: | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 167,029 | 161,826 | 130,662 | 139,414 | |||||||||||
Other short-term borrowings | 48,978 | 44,150 | 102,567 | 144,096 | |||||||||||
Total short-term borrowings | 216,007 | 205,976 | 233,229 | 283,510 | |||||||||||
Long-term debt and mandatorily redeemable securities | 64,760 | 64,738 | 57,379 | 57,577 | |||||||||||
Subordinated notes | 58,764 | 58,764 | 58,764 | 58,764 | |||||||||||
Accrued expenses and other liabilities | 61,083 | 63,620 | 55,305 | 47,356 | |||||||||||
Total liabilities | 4,777,652 | 4,718,182 | 4,543,863 | 4,466,363 | |||||||||||
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 September 30, 2016, June 30, 2016, December 31, 2015 and September 30, 2015, respectively | 436,538 | 436,538 | 436,538 | 436,538 | |||||||||||
Retained earnings | 280,335 | 270,744 | 251,812 | 242,102 | |||||||||||
Cost of common stock in treasury (2,338,581, 2,342,904, 2,178,090, and 2,123,527 shares at September 30, 2016, June 30, 2016, December 31, 2015, and September 30, 2015, respectively) | (56,262 | ) | (56,357 | ) | (50,852 | ) | (49,120 | ) | |||||||
Accumulated other comprehensive income | 9,648 | 10,831 | 6,555 | 9,701 | |||||||||||
Total shareholders’ equity | 670,259 | 661,756 | 644,053 | 639,221 | |||||||||||
Total liabilities and shareholders’ equity | $ | 5,447,911 | $ | 5,379,938 | $ | 5,187,916 | $ | 5,105,584 |
1st SOURCE CORPORATION | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
(Unaudited - Dollars in thousands, except per share amounts) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
Interest income: | |||||||||||||||||||
Loans and leases | $ | 44,965 | $ | 43,891 | $ | 42,560 | $ | 131,592 | $ | 124,747 | |||||||||
Investment securities, taxable | 2,384 | 3,040 | 3,277 | 8,504 | 8,929 | ||||||||||||||
Investment securities, tax-exempt | 672 | 697 | 738 | 2,061 | 2,261 | ||||||||||||||
Other | 279 | 309 | 246 | 879 | 730 | ||||||||||||||
Total interest income | 48,300 | 47,937 | 46,821 | 143,036 | 136,667 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 3,879 | 3,790 | 2,874 | 11,440 | 8,271 | ||||||||||||||
Short-term borrowings | 150 | 119 | 147 | 430 | 381 | ||||||||||||||
Subordinated notes | 1,055 | 1,055 | 1,055 | 3,165 | 3,165 | ||||||||||||||
Long-term debt and mandatorily redeemable securities | 522 | 680 | 536 | 1,725 | 1,540 | ||||||||||||||
Total interest expense | 5,606 | 5,644 | 4,612 | 16,760 | 13,357 | ||||||||||||||
Net interest income | 42,694 | 42,293 | 42,209 | 126,276 | 123,310 | ||||||||||||||
Provision for loan and lease losses | 2,067 | 2,049 | 992 | 5,091 | 2,160 | ||||||||||||||
Net interest income after provision for loan and lease losses | 40,627 | 40,244 | 41,217 | 121,185 | 121,150 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Trust fees | 4,691 | 5,108 | 4,634 | 14,422 | 14,438 | ||||||||||||||
Service charges on deposit accounts | 2,366 | 2,276 | 2,413 | 6,749 | 6,977 | ||||||||||||||
Debit card | 2,745 | 2,816 | 2,583 | 8,160 | 7,610 | ||||||||||||||
Mortgage banking | 1,334 | 1,115 | 969 | 3,495 | 3,459 | ||||||||||||||
Insurance commissions | 1,350 | 1,233 | 1,460 | 4,146 | 4,147 | ||||||||||||||
Equipment rental | 6,657 | 6,517 | 5,881 | 19,247 | 16,302 | ||||||||||||||
Gains (losses) on investment securities available-for-sale | 989 | (209 | ) | — | 790 | 4 | |||||||||||||
Other | 2,533 | 3,441 | 3,192 | 9,580 | 9,477 | ||||||||||||||
Total noninterest income | 22,665 | 22,297 | 21,132 | 66,589 | 62,414 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Salaries and employee benefits | 22,136 | 21,194 | 21,835 | 64,681 | 63,554 | ||||||||||||||
Net occupancy | 2,435 | 2,307 | 2,496 | 7,243 | 7,302 | ||||||||||||||
Furniture and equipment | 4,898 | 4,811 | 4,604 | 14,499 | 13,471 | ||||||||||||||
Depreciation - leased equipment | 5,570 | 5,444 | 4,858 | 16,115 | 13,342 | ||||||||||||||
Professional fees | 1,244 | 1,190 | 1,237 | 3,653 | 3,215 | ||||||||||||||
Supplies and communication | 1,256 | 1,374 | 1,307 | 4,138 | 4,122 | ||||||||||||||
FDIC and other insurance | 647 | 911 | 848 | 2,437 | 2,544 | ||||||||||||||
Business development and marketing | 1,263 | 1,025 | 1,244 | 3,268 | 3,507 | ||||||||||||||
Loan and lease collection and repossession | 324 | 385 | 416 | 1,136 | 485 | ||||||||||||||
Other | 1,372 | 1,393 | 2,223 | 4,714 | 5,828 | ||||||||||||||
Total noninterest expense | 41,145 | 40,034 | 41,068 | 121,884 | 117,370 | ||||||||||||||
Income before income taxes | 22,147 | 22,507 | 21,281 | 65,890 | 66,194 | ||||||||||||||
Income tax expense | 7,883 | 8,028 | 7,353 | 23,329 | 23,125 | ||||||||||||||
Net income | $ | 14,264 | $ | 14,479 | $ | 13,928 | $ | 42,561 | $ | 43,069 | |||||||||
Per common share: | |||||||||||||||||||
Basic net income per common share | $ | 0.55 | $ | 0.56 | $ | 0.53 | $ | 1.63 | $ | 1.63 | |||||||||
Diluted net income per common share | $ | 0.55 | $ | 0.56 | $ | 0.53 | $ | 1.63 | $ | 1.63 | |||||||||
Cash dividends | $ | 0.180 | $ | 0.180 | $ | 0.164 | $ | 0.540 | $ | 0.491 | |||||||||
Basic weighted average common shares outstanding | 25,867,169 | 25,853,537 | 26,164,646 | 25,881,360 | 26,211,630 | ||||||||||||||
Diluted weighted average common shares outstanding | 25,867,169 | 25,853,537 | 26,164,646 | 25,881,360 | 26,211,630 |
1st SOURCE CORPORATION | ||||||||||||||||||||||||||||||||
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||
INTEREST RATES AND INTEREST DIFFERENTIAL | ||||||||||||||||||||||||||||||||
(Unaudited - Dollars in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||
September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||||||||||||||||
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 | $ | 690,867 | $ | 2,384 | 1.37 | % | $ | 678,849 | $ | 3,040 | 1.80 | % | $ | 660,921 | $ | 3,277 | 1.97 | % | ||||||||||||||
Tax exempt(1) | 130,201 | 973 | 2.97 | % | 126,007 | 1,012 | 3.23 | % | 121,050 | 1,087 | 3.56 | % | ||||||||||||||||||||
Mortgages held for sale | 14,681 | 134 | 3.63 | % | 11,100 | 110 | 3.99 | % | 9,610 | 100 | 4.13 | % | ||||||||||||||||||||
Loans and leases, net of unearned discount(1) | 4,189,340 | 44,980 | 4.27 | % | 4,105,111 | 43,926 | 4.30 | % | 3,910,981 | 42,527 | 4.31 | % | ||||||||||||||||||||
Other investments | 41,286 | 279 | 2.69 | % | 65,568 | 309 | 1.90 | % | 30,774 | 246 | 3.17 | % | ||||||||||||||||||||
Total earning assets(1) | 5,066,375 | 48,750 | 3.83 | % | 4,986,635 | 48,397 | 3.90 | % | 4,733,336 | 47,237 | 3.96 | % | ||||||||||||||||||||
Cash and due from banks | 60,665 | 60,786 | 59,172 | |||||||||||||||||||||||||||||
Reserve for loan and lease losses | (92,237 | ) | (90,107 | ) | (87,109 | ) | ||||||||||||||||||||||||||
Other assets | 390,727 | 386,316 | 355,951 | |||||||||||||||||||||||||||||
Total assets | $ | 5,425,530 | $ | 5,343,630 | $ | 5,061,350 | ||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||
Interest-bearing deposits | 3,393,457 | 3,879 | 0.45 | % | 3,380,208 | 3,790 | 0.45 | % | 3,107,108 | 2,874 | 0.37 | % | ||||||||||||||||||||
Short-term borrowings | 217,460 | 150 | 0.27 | % | 204,828 | 119 | 0.23 | % | 266,201 | 147 | 0.22 | % | ||||||||||||||||||||
Subordinated notes | 58,764 | 1,055 | 7.14 | % | 58,764 | 1,055 | 7.22 | % | 58,764 | 1,055 | 7.12 | % | ||||||||||||||||||||
Long-term debt and mandatorily redeemable securities | 64,641 | 522 | 3.21 | % | 65,906 | 680 | 4.15 | % | 57,432 | 536 | 3.70 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 3,734,322 | 5,606 | 0.60 | % | 3,709,706 | 5,644 | 0.61 | % | 3,489,505 | 4,612 | 0.52 | % | ||||||||||||||||||||
Noninterest-bearing deposits | 959,796 | 920,194 | 888,687 | |||||||||||||||||||||||||||||
Other liabilities | 61,406 | 54,638 | 44,193 | |||||||||||||||||||||||||||||
Shareholders’ equity | 670,006 | 659,092 | 638,965 | |||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 5,425,530 | $ | 5,343,630 | $ | 5,061,350 | ||||||||||||||||||||||||||
Less: Fully tax-equivalent adjustments | (450 | ) | (460 | ) | (416 | ) | ||||||||||||||||||||||||||
Net interest income/margin (GAAP-derived)(1) | $ | 42,694 | 3.35 | % | $ | 42,293 | 3.41 | % | $ | 42,209 | 3.54 | % | ||||||||||||||||||||
Fully tax-equivalent adjustments | 450 | 460 | 416 | |||||||||||||||||||||||||||||
Net interest income/margin - FTE(1) | $ | 43,144 | 3.39 | % | $ | 42,753 | 3.45 | % | $ | 42,625 | 3.57 | % |
1st SOURCE CORPORATION | |||||||||||||||||||||
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||
INTEREST RATES AND INTEREST DIFFERENTIAL | |||||||||||||||||||||
(Unaudited - Dollars in thousands) | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2016 | September 30, 2015 | ||||||||||||||||||||
Average Balance | Interest Income/Expense | Yield/ Rate | Average Balance | Interest Income/Expense | Yield/ Rate | ||||||||||||||||
ASSETS | |||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||
Taxable | $ | 680,606 | $ | 8,504 | 1.67 | % | $ | 664,787 | $ | 8,929 | 1.80 | % | |||||||||
Tax exempt(1) | 126,370 | 2,998 | 3.17 | % | 122,556 | 3,332 | 3.63 | % | |||||||||||||
Mortgages held for sale | 11,650 | 339 | 3.89 | % | 12,010 | 351 | 3.91 | % | |||||||||||||
Loans and leases, net of unearned discount(1) | 4,101,284 | 131,687 | 4.29 | % | 3,795,929 | 124,566 | 4.39 | % | |||||||||||||
Other investments | 52,694 | 879 | 2.23 | % | 31,829 | 730 | 3.07 | % | |||||||||||||
Total earning assets(1) | 4,972,604 | 144,407 | 3.88 | % | 4,627,111 | 137,908 | 3.98 | % | |||||||||||||
Cash and due from banks | 60,103 | 61,047 | |||||||||||||||||||
Reserve for loan and lease losses | (90,403 | ) | (86,321 | ) | |||||||||||||||||
Other assets | 384,366 | 345,062 | |||||||||||||||||||
Total assets | $ | 5,326,670 | $ | 4,946,899 | |||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||
Interest-bearing deposits | 3,342,828 | 11,440 | 0.46 | % | 3,077,922 | 8,271 | 0.36 | % | |||||||||||||
Short-term borrowings | 217,920 | 430 | 0.26 | % | 241,570 | 381 | 0.21 | % | |||||||||||||
Subordinated notes | 58,764 | 3,165 | 7.19 | % | 58,764 | 3,165 | 7.20 | % | |||||||||||||
Long-term debt and mandatorily redeemable securities | 64,351 | 1,725 | 3.58 | % | 57,188 | 1,540 | 3.60 | % | |||||||||||||
Total interest-bearing liabilities | 3,683,863 | 16,760 | 0.61 | % | 3,435,444 | 13,357 | 0.52 | % | |||||||||||||
Noninterest-bearing deposits | 926,456 | 836,009 | |||||||||||||||||||
Other liabilities | 56,748 | 43,835 | |||||||||||||||||||
Shareholders’ equity | 659,603 | 631,611 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 5,326,670 | $ | 4,946,899 | |||||||||||||||||
Less: Fully tax-equivalent adjustments | (1,371 | ) | (1,241 | ) | |||||||||||||||||
Net interest income/margin (GAAP-derived)(1) | $ | 126,276 | 3.39 | % | $ | 123,310 | 3.56 | % | |||||||||||||
Fully tax-equivalent adjustments | 1,371 | 1,241 | |||||||||||||||||||
Net interest income/margin - FTE(1) | $ | 127,647 | 3.43 | % | $ | 124,551 | 3.60 | % |
1st SOURCE CORPORATION | |||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||||||||||||
(Unaudited - Dollars in thousands, except per share data) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Calculation of Net Interest Margin | |||||||||||||||||
(A) | Interest income (GAAP) | $ | 48,300 | $ | 47,937 | $ | 46,821 | $ | 143,036 | $ | 136,667 | ||||||
Fully tax-equivalent adjustments: | |||||||||||||||||
(B) | - Loans and leases | 150 | 145 | 67 | 434 | 170 | |||||||||||
(C) | - Tax-exempt investment securities | 300 | 315 | 349 | 937 | 1,071 | |||||||||||
(D) | Interest income - FTE (A+B+C) | 48,750 | 48,397 | 47,237 | 144,407 | 137,908 | |||||||||||
(E) | Interest expense (GAAP) | 5,606 | 5,644 | 4,612 | 16,760 | 13,357 | |||||||||||
(F) | Net interest income (GAAP) (A-E) | 42,694 | 42,293 | 42,209 | 126,276 | 123,310 | |||||||||||
(G) | Net interest income - FTE (D-E) | 43,144 | 42,753 | 42,625 | 127,647 | 124,551 | |||||||||||
(H) | Annualization factor | 3.978 | 4.022 | 3.967 | 1.336 | 1.337 | |||||||||||
(I) | Total earning assets | $ | 5,066,375 | $ | 4,986,635 | $ | 4,733,336 | $ | 4,972,604 | $ | 4,627,111 | ||||||
Net interest margin (GAAP-derived) (F*H)/I | 3.35 | % | 3.41 | % | 3.54 | % | 3.39 | % | 3.56 | % | |||||||
Net interest margin - FTE (G*H)/I | 3.39 | % | 3.45 | % | 3.57 | % | 3.43 | % | 3.60 | % | |||||||
Calculation of Efficiency Ratio | |||||||||||||||||
(F) | Net interest income (GAAP) | $ | 42,694 | $ | 42,293 | $ | 42,209 | $ | 126,276 | $ | 123,310 | ||||||
(G) | Net interest income - FTE | 43,144 | 42,753 | 42,625 | 127,647 | 124,551 | |||||||||||
(J) | Plus: noninterest income (GAAP) | 22,665 | 22,297 | 21,132 | 66,589 | 62,414 | |||||||||||
(K) | Less: gains/losses on investment securities and partnership investments | (1,046 | ) | (743 | ) | (477 | ) | (2,899 | ) | (1,881 | ) | ||||||
(L) | Less: depreciation - leased equipment | (5,570 | ) | (5,444 | ) | (4,858 | ) | (16,115 | ) | (13,342 | ) | ||||||
(M) | Total net revenue (GAAP) (F+J) | 65,359 | 64,590 | 63,341 | 192,865 | 185,724 | |||||||||||
(N) | Total net revenue - adjusted (G+J-K-L) | 59,193 | 58,863 | 58,422 | 175,222 | 171,742 | |||||||||||
(O) | Noninterest expense (GAAP) | 41,145 | 40,034 | 41,068 | 121,884 | 117,370 | |||||||||||
(L) | Less: depreciation - leased equipment | (5,570 | ) | (5,444 | ) | (4,858 | ) | (16,115 | ) | (13,342 | ) | ||||||
(P) | Noninterest expense - adjusted (O+L) | 35,575 | 34,590 | 36,210 | 105,769 | 104,028 | |||||||||||
Efficiency ratio (GAAP-derived) (O/M) | 62.95 | % | 61.98 | % | 64.84 | % | 63.20 | % | 63.20 | % | |||||||
Efficiency ratio - adjusted (P/N) | 60.10 | % | 58.76 | % | 61.98 | % | 60.36 | % | 60.57 | % | |||||||
End of Period | |||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||
2016 | 2016 | 2015 | |||||||||||||||
Calculation of Tangible Common Equity-to-Tangible Assets Ratio | |||||||||||||||||
(Q) | Total shareholders’ equity (GAAP) | $ | 670,259 | $ | 661,756 | $ | 639,221 | ||||||||||
(R) | Less: goodwill and intangible assets | (84,244 | ) | (84,386 | ) | (84,822 | ) | ||||||||||
(S) | Total tangible common shareholders’ equity (Q+R) | $ | 586,015 | $ | 577,370 | $ | 554,399 | ||||||||||
(T) | Total assets (GAAP) | 5,447,911 | 5,379,938 | 5,105,584 | |||||||||||||
(R) | Less: goodwill and intangible assets | (84,244 | ) | (84,386 | ) | (84,822 | ) | ||||||||||
(U) | Total tangible assets (T+R) | $ | 5,363,667 | $ | 5,295,552 | $ | 5,020,762 | ||||||||||
Common equity-to-assets ratio (GAAP-derived) (Q/T) | 12.30 | % | 12.30 | % | 12.52 | % | |||||||||||
Tangible common equity-to-tangible assets ratio (S/U) | 10.93 | % | 10.90 | % | 11.04 | % | |||||||||||
Calculation of Tangible Book Value per Common Share | |||||||||||||||||
(Q) | Total shareholders’ equity (GAAP) | $ | 670,259 | $ | 661,756 | $ | 639,221 | ||||||||||
(V) | Actual common shares outstanding | 25,867,093 | 25,862,770 | 26,082,147 | |||||||||||||
Book value per common share (GAAP-derived) (Q/V)*1000 | $ | 25.91 | $ | 25.59 | $ | 24.51 | |||||||||||
Tangible common book value per share (S/V)*1000 | $ | 22.65 | $ | 22.32 | $ | 21.26 |