1st Source Corporation Announces Year End Results.Business Editors SOUTH BEND South Bend, city (1990 pop. 105,511), seat of St. Joseph co., N Ind., on the great south bend of the St. Joseph River, in a farming and mint-growing region; inc. as a city 1865. , Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. .--(BUSINESS WIRE)--Jan. 29, 2004 1st Source Corporation (Nasdaq:SRCE SRCE Source ), parent company of 1st Source Bank, today reported net income of $19.15 million for the year 2003, an increase of 90.80 percent over the $10.04 million reported for the year 2002. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income per common share for 2003 amounted to $0.91, up 93.62 percent compared to $0.47 diluted net income per common share for 2002. Net income was $5.36 million for the fourth quarter of 2003 compared to the $0.96 million of net income reported for the fourth quarter of 2002. Diluted net income per common share for the fourth quarter of 2003 amounted to $0.26, compared to $0.05 per common share reported in the fourth quarter of 2002. The Board of Directors approved a fourth quarter cash dividend of $0.10 per share. The cash dividend is payable on February February: see month. 17, 2004 to shareholders of record on February 9, 2004, and is an increase of 11.11 percent over the fourth quarter cash dividend in 2002. Christopher J. Murphy III, Chairman of 1st Source Corporation, commented, "While the fourth quarter presented challenges to our margins, we were pleased with the improvements in the quality of our loan portfolios as evidenced by lower non-performing asset ratios and lower net charge offs than a year ago." Mr. Murphy continued, "At the end of the quarter, we closed down the asset securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. and purchased the loans in the 1st Source Master Trust. For many years, 1st Source was the originator Originator A bank, savings and loan, or mortgage banker that initially made a mortgage loan that is part of a pool. Also, an investment bank that has worked with the issuer of a new securities offering from the beginning and is usually appointed manager of the underwriting and servicer of loans sold to and owned by the Trust, which were mainly loans secured by business use and personal aircraft, or by car rental company vehicles. However, the Trust had outlived its usefulness as a source of funding, and its accounting and reporting requirements had become way too time consuming. Closing the Trust freed up intellectual capital which can be redirected to achieve better benefit for 1st Source." "We are also very pleased with the success of our new personal on-line banking product, InfoSource Online, which provides free basic home banking services to our customers. Introduced late in the third quarter, over 11,000 customers had decided to become active users by year end, which is a pretty sound endorsement of the product," Mr. Murphy concluded. The provision for loan losses was $2.83 million in the fourth quarter compared to $8.33 million in the fourth quarter of 2002. 1st Source's reserve for loan losses as of December December: see month. 31, 2003, was 3.14 percent of total loans, compared to 2.72 percent as of December 31, 2002. Net charge-offs were $2.83 million for the fourth quarter 2003, compared to $8.06 million a year ago. Net charge-offs for the year were $13.36 million compared to $38.06 million in 2002. The ratio of nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. to net loans and leases was 1.59 percent on December 31, 2003, compared to 2.79 percent on December 31, 2002. Noninterest income for the fourth quarter of 2003 was $19.39 million, down 7.18 percent from the fourth quarter of 2002. This decrease was due to the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. of mortgage loan refinancings, lower trading account Trading Account 1. An account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer. 2. An account held at a financial institution and administered by an investment dealer that the account holder uses to employ a securities gains, and lower securitization impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. in the fourth quarter of 2003 compared to the same period in 2002. For the year, noninterest income was $80.20 million, up 9.68 percent from 2002. The predominant pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. factor behind the growth in 2003 was mortgage loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. and sale income. This increase was partially offset by a decrease in equipment rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time and increased securitization impairment charges. Noninterest expense was $34.12 million for the fourth quarter of 2003, down 17.42 percent from the fourth quarter of 2002. This quarter to quarter decrease was primarily due to decreased loan collection and repossession The taking back of an item that has been sold on credit and delivered to the purchaser because the payments have not been made on it. For example, if an individual fails to render prompt payments on a new car, the car might be subject to repossession by the finance company, expense, including lower valuation adjustments on repossessed aircraft. Also, depreciation on leased equipment decreased due to reduced demand for equipment leases, and salaries and employee benefits decreased due to lower mortgage commissions as mortgage loan refinancings slowed. For the year, noninterest expense was $138.90 million, down 1.31 percent from 2002. In general, 2003 noninterest expense reflects decreased depreciation on equipment owned under operating leases Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. and decreased loan collection and repossession expense offset by increased salary and employee benefit expense. The 2003 earnings represent a return on average shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of 6.12 percent, compared to 3.23 percent for 2002. Return on total assets Return on total assets The ratio of earnings available to common stockholders to total assets. was 0.59 percent compared to 0.29 percent for 2002. As of December 31, 2003, the 1st Source common equity-to-assets ratio was 9.45 percent, compared to 9.08 percent a year ago. Shareholders' equity was $314.70 million, up 1.70 percent from $309.43 million a year ago. Total assets at the end of 2003 were $3.33 billion compared to $3.41 billion at the end of 2002. Total deposits were $2.49 billion, down 8.32 percent from the end of 2002, and total loans were $2.23 billion, up 2.37 percent from 2002. 1st Source takes pride in its identification as the largest locally owned financial institution headquartered in the Northern Indiana-Southwestern Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). area. While delivering a comprehensive range of consumer and commercial banking services, 1st Source Bank has distinguished itself with highly personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. services. 1st Source Bank also competes for business nationally by offering specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. financing services for used private and cargo aircraft A cargo aircraft is an airplane designed and used for the carriage of goods, rather than passengers. This role demands a number of features that makes a cargo aircraft instantly identifiable; a "fat" looking fuselage, a high-wing to allow the cargo area to sit near the ground, a , automobiles for leasing and rental agencies, medium and heavy duty trucks, construction and environmental equipment. The corporation includes 60 banking centers in 15 counties, 7 Trustcorp Mortgage offices in Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Ohio and Michigan, and 21 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 Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. 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 FTN Face the Nation (CBS News) FTN Family Television Network FTN Fido Technology Networks FTN FeedThe.Net (website) FTN Franja Transversal del Norte (Guatemala region) Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians Research Securities; Goldman Gold·man , Emma 1869-1940. Russian-born American anarchist. Jailed repeatedly for her advocacy of birth control and opposition to military conscription, she was deported to the Soviet Union in 1919. , Sachs Sachs , Hans 1494-1576. German writer and Meistersinger noted for his many dramas, poems, and songs. His life inspired Wagner's opera Die Meistersinger von Nürnberg (1868). & Company; Keefe, Bruyette & Woods, Inc.; Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. , Pierce Pierce may refer to: Places
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Company, Inc.; NatCity Investments, Inc.; Prudential Prudential is the name of two different companies and buildings named after them:Companies:
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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 fourth quarter, 2003 on the floating rate securities is 3.15 percent. Marketmakers in those securities are Goldman, Sachs & Company; Howe, Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. Investments, Inc.; Schwab Capital Markets; and Stifel, Nicolaus & Company, Inc. Except for historical information contained herein, the matters discussed in this document express "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ." 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ; 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , which filings are available from the SEC. 1st Source undertakes no obligation to publicly update or revise any forward-looking statements. (Charts attached)
1st SOURCE CORPORATION
4th QUARTER 2003 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except Per Share Data)
3 Months Ended 12 Months Ended
December 31 December 31
2003 2002 2003 2002
------------ ------------ ------------- -------------
END OF PERIOD
BALANCES
Assets $ 3,330,153 $ 3,407,468
Loans 2,231,000 2,179,452
Deposits 2,487,215 2,712,905
Reserve for
Loan Losses 70,045 59,218
Intangible
Assets 25,740 27,895
Common
Shareholders'
Equity 314,691 309,429
AVERAGE BALANCES
Assets $ 3,177,552 $ 3,503,022 $ 3,258,174 $ 3,466,382
Earning Assets 2,922,488 3,181,936 2,981,622 3,149,632
Investments 787,701 634,611 702,973 639,178
Loans 2,032,231 2,225,297 2,091,004 2,332,992
Deposits 2,438,887 2,831,058 2,559,261 2,771,310
Interest
Bearing
Liabilities 2,423,947 2,723,923 2,477,831 2,738,624
Common
Shareholders'
Equity 313,245 309,397 312,793 310,412
INCOME STATEMENT
DATA
Net Interest
Income $ 25,412 $ 29,051 $ 103,252 $ 118,686
Net Interest
Income - FTE 26,143 29,825 106,244 121,822
Provision for
Loan Losses 2,832 8,333 17,361 39,657
Noninterest
Income 19,385 20,884 80,196 73,117
Noninterest
Expense 34,123 41,321 138,904 140,741
Net Income 5,361 963 19,154 10,039
PER SHARE DATA
Basic Net
Income Per
Common Share $ 0.26 $ 0.05 $ 0.92 $ 0.48
Diluted Net
Income Per
Common Share 0.26 0.05 0.91 0.47
Cash Dividends
Per Common
Share 0.100 0.090 0.370 0.360
Book Value Per
Common Share 15.19 14.77 15.19 14.77
Market Value --
High 22.640 17.810 22.640 26.890
Market Value --
Low 18.850 10.900 12.570 10.900
Basic Weighted
Avg. Common
Shares
Outstanding 20,690,334 20,957,401 20,858,720 20,935,212
Diluted Weighted
Avg. Common
Shares
Outstanding 20,987,840 21,281,079 21,150,009 21,309,580
KEY RATIOS
Return on
Average Assets 0.67% 0.11% 0.59% 0.29%
Return on Average
Common
Shareholders'
Equity 6.79 1.23 6.12 3.23
Average Common
Shareholders'
Equity to
Average Assets 9.86 8.83 9.60 8.95
End of Period
Tangible Common
Equity to Tangible
Assets 8.74 8.33 8.74 8.33
Net Interest Margin 3.55 3.72 3.56 3.87
Efficiency: Expense
to Revenue 71.72 76.22 69.83 67.27
Net Charge Offs to
Average Loans 0.55 1.44 0.64 1.63
Loan Loss Reserve
to Loans 3.14 2.72 3.14 2.72
Nonperforming Assets
to Loans and
Leases 1.59 2.79 1.59 2.79
ASSET QUALITY
Loans Past Due
90 Days or More $ 212 $ 154
Non-accrual Loans 27,085 35,664
Other Real Estate
Owned 3,010 4,362
Repossessions 6,263 21,343
Equipment Owned Under
Operating Leases 257 2,594
Total Nonperforming
Assets 36,827 64,117
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
1st Source Corporation and Subsidiaries
(Unaudited - Dollars in thousands)
December 31, December 31,
2003 2002
------------- -------------
ASSETS
Cash and due from banks $ 109,787 $ 120,894
Federal funds sold and
interest bearing deposits
with other banks 1,355 81,881
Investment securities
available-for-sale
(amortized cost of $759,945
and $640,224 at
December 31, 2003 and 2002,
respectively) 763,763 647,617
Trading account securities 0 13,347
Mortgages held for sale 60,215 146,640
Loans - net of unearned discount
Commercial and agricultural 402,905 428,367
Truck and automobile financing 491,052 445,195
Aircraft financing 489,155 323,802
Construction equipment financing 219,562 303,126
Loans secured by real estate 533,749 567,950
Consumer loans 94,577 111,012
------------- -------------
Total Loans 2,231,000 2,179,452
Reserve for loan losses (70,045) (59,218)
------------- -------------
Net Loans 2,160,955 2,120,234
Equipment owned under operating
leases, net of accumulated
depreciation 70,305 93,893
Premises and equipment 38,431 40,899
Accrued income and other assets 125,342 142,063
------------- -------------
Total Assets $ 3,330,153 $ 3,407,468
============= =============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits
Noninterest bearing $ 396,026 $ 419,289
Interest bearing 2,091,189 2,293,616
------------- -------------
Total Deposits 2,487,215 2,712,905
Federal funds purchased and
securities sold under
agreements to repurchase 276,040 212,040
Other short-term borrowings 114,814 48,638
Long-term debt and mandatorily
redeemable securities 22,802 16,878
Subordinated notes 56,444 54,750
Accrued expenses and other
liabilities 58,147 52,828
------------- -------------
Total Liabilities 3,015,462 3,098,039
Shareholders' equity:
Preferred stock-no par value 0 0
Common stock-no par value 7,578 7,579
Capital surplus 214,001 214,001
Retained earnings 100,534 90,897
Cost of common stock in treasury (9,777) (7,637)
Accumulated other comprehensive
income 2,355 4,589
------------- -------------
Total Shareholders' Equity 314,691 309,429
------------- -------------
Total Liabilities and
Shareholders' Equity $ 3,330,153 $ 3,407,468
============= =============
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
1st Source Corporation and Subsidiaries
(Unaudited - Dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
---------- --------- --------- ---------
INTEREST AND FEE INCOME
Loans $ 31,606 $ 40,472 $ 137,382 $ 171,029
Investment securities:
Taxable 4,961 4,915 18,410 21,359
Tax exempt 1,348 1,482 5,614 6,037
Other 134 839 916 1,078
---------- ---------- ---------- ----------
Total Interest Income 38,049 47,708 162,322 199,503
INTEREST EXPENSE
Deposits 10,276 16,049 49,153 71,084
Short-term borrowings 973 1,545 5,121 5,659
Subordinated notes 962 875 3,804 3,249
Long-term debt and
mandatorily redeemable
securities 426 188 992 825
---------- ---------- ---------- ----------
Total Interest Expense 12,637 18,657 59,070 80,817
---------- ---------- ---------- ----------
Net Interest Income 25,412 29,051 103,252 118,686
Provision for loan losses 2,832 8,333 17,361 39,657
---------- ---------- ---------- ----------
Net Interest Income After
Provision for Loan
Losses 22,580 20,718 85,891 79,029
NONINTEREST INCOME
Trust fees 2,645 2,325 10,664 10,252
Service charges on
deposit accounts 3,876 3,959 15,532 14,947
Loan servicing and
sale income 4,037 4,852 17,474 7,406
Equipment rental income 6,005 6,872 25,448 28,773
Other income 3,069 4,624 15,014 14,575
Investment securities
and other investment
losses (247) (1,748) (3,936) (2,836)
---------- ---------- ---------- ----------
Total Noninterest Income 19,385 20,884 80,196 73,117
---------- ---------- ---------- ----------
NONINTEREST EXPENSE
Salaries and employee
benefits 16,725 17,611 69,457 67,398
Net occupancy expense 1,506 1,736 6,881 6,861
Furniture and equipment
expense 2,444 2,827 10,363 10,719
Depreciation -- leased
equipment 4,576 5,637 19,773 23,494
Supplies and
communication 1,562 1,707 6,163 6,582
Loan collection and
repossession expense 2,251 6,752 8,112 9,851
Other expense 5,059 5,051 18,155 15,836
---------- ---------- ---------- ----------
Total Noninterest Expense 34,123 41,321 138,904 140,741
---------- ---------- ---------- ----------
Income before taxes 7,842 281 27,183 11,405
Income tax expense
(benefit) 2,481 (682) 8,029 1,366
---------- ---------- ---------- ----------
Net Income $ 5,361 $ 963 $ 19,154 $ 10,039
========== ========== ========== ==========
The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP CUSIP See: Committee on Uniform Securities Identification Procedures CUSIP See Committee on Uniform Securities Identification Procedures. #336901 10 3) Please contact us at shareholder@1stsource.com. |
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