1st Source Corporation Quarterly Earnings Up, Dividend Announced.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)--July 28, 2003 1st Source Corporation (Nasdaq:SRCE SRCE Source ), parent company of 1st Source Bank, today reported net income of $4.69 million for the second quarter of 2003, up 69.50 percent over the $2.77 million reported in the second quarter of 2002. During the first six months of 2003, net income for 1st Source Corporation was $9.15 million, a 31.19 percent increase over the $6.98 million reported for the same period in 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 the second quarter of 2003 amounted to $0.22, up 69.23 percent compared with $0.13 reported in the second quarter of 2002. Diluted net income per share for the first two quarters of 2003 was $0.43, an increase of 30.30 percent over the $0.33 reported in the same period a year ago. Earnings for the second quarter of 2003 represent a return on average common 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 5.95 percent, as compared to 3.59 percent for the second quarter of 2002. Return on average total assets for the second quarter of 2003 was 0.57 percent versus 0.32 percent reported in the second quarter of 2002. Christopher J. Murphy III, Chairman and Chief Executive Officer, reported that at the July July: see month. meeting, the Board of Directors approved a cash dividend for the second quarter of $ 0.09 per share. The cash dividend will be payable on August 15, 2003 to shareholders of record August 5, 2003. The cash dividend is equal to the second quarter cash dividend in 2002. Mr. Murphy commented, "We are pleased with the slight improvement in our earnings and the slowly improving credit picture. Progress has occurred without substantial improvement in the overall economy, which especially affects our transportation financing areas. The Commercial, Consumer, and Trust Banking businesses all did quite well during the quarter and mortgage volumes in both the Bank and Trustcorp (our mortgage banking subsidiary) were at record levels." "We made good progress in disposing of repossessed aircraft from both the Bank's and our securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. portfolio over the last year. The credit problems of early 2002 cascaded throughout the year and we finished 2002 having repossessed 52 aircraft. Through June June: see month. 30, 2003, we have repossessed or taken control of another 6 aircraft. We arranged for disposal of 39 planes leaving us with 19 repossessed aircraft at the end of June. Additionally, we have seen some stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. of the market values for aircraft and are hopeful that we can continue to work down these problems. Having said this, we know that there will continue to be some strong volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in repossessions and 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. among aircraft operators. We have also seen an increase in the delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. of our construction machinery customers as they deal with bad weather and slow payment from state and municipal governments." Mr. Murphy concluded, "We are especially pleased that we were able to end the quarter with an increase in the reserve for loan losses which now totals $63.19 million, up from $61.84 million at the close of the last quarter. Our reserve is 3.01 percent of outstanding loans, and covers our non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. 1.50 times. Overall, our core businesses performed well during the quarter, and our credit situation has improved over last year." 1st Source's reserve for loan losses as of June 30, 2003 increased to 3.01 percent of total loans compared to 2.92 percent in first quarter 2003. For the second quarter of 2003, 1st Source's provision for loan losses was $4.90 million compared to $5.55 million in the first quarter of 2003. Net charge-offs were $3.55 million for the second quarter 2003 compared to $2.92 million last quarter. The ratio of nonperforming assets to net loans and leases was 2.67 percent on June 30, 2003, compared to 3.17 percent on March 31, 2003. Tax-equivalent net interest income was $27.50 million for the second quarter of 2003, down 10.56 percent from 2002's second quarter. The net interest margin was 3.66 percent for the second quarter of 2003 versus 3.90 percent for the same period in 2002. For the first six months of 2003, tax-equivalent interest income was $54.82 million compared to $62.09 million for the first six months of 2002, a decrease of 11.72 percent. The net interest margin was 3.69 percent for the six months ending June 30, 2003, versus 3.95 percent for the same period in 2002. Both the lower tax-equivalent net interest income and the lower margin were due to reduced earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin and reduced asset yields, reflecting the effect of fewer loans and lower market interest rates. Noninterest income for the second quarter of 2003 was $21.92 million, up 22.16 percent from the second quarter of 2002. In the second quarter, 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 was up as increased mortgage revenue more than offset mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. rights valuation adjustments and decreased 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. income. Insurance commissions and trading security income also increased in 2003, while 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 decreased due to a decrease in 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. . For the first six months of 2003, noninterest income was $41.96 million, up 14.56 percent from 2002. Significant items affecting comparability between six month periods included: increased mortgage revenue, insurance commissions, and trading security income; and decreased securitization income and equipment rental income. Noninterest expense was $37.28 million for the second quarter of 2003, compared with $33.66 million for the second quarter of 2002. For the first six months, noninterest expense was $72.08 million, compared with $65.91 million for the same period in 2002. In general, noninterest expense in 2003 reflects higher personnel expense and an increase in expenses related to loan collection. As 1st Source continues to work through problem loans and dispose of dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although primarily in its aircraft and auto financing businesses, expenses in this area remain higher than one year ago. During the second quarter, 1st Source began to voluntarily liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the its aircraft and auto rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. loan securitization due to reduced loan demand and strong deposit base. The 1st Source Master Trust Securitization was issued in July 1998 with a seven year revolving period followed by scheduled amortization beginning July 2005. As of June 30, 2003, there were $309.06 million outstanding auto and aircraft loans as compared to $387.79 million at December December: see month. 31, 2002. As of June 30, 2003, the 1st Source common equity-to-assets ratio was 9.63 percent compared to 9.05 percent a year ago. Common shareholders' equity was $317.17 million, up 1.83 percent from the $311.48 million a year ago. Total assets at the end of the second quarter of 2003 were $3.29 billion, down 4.30 percent from the same time last year. Total deposits were down 5.29 percent and total loans were down 11.67 percent over the comparable figures at the end of the second quarter of 2002. 1st Source Corporation is 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 innovative products and 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 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 No invention has so transformed the landscape of the United States as the automobile, and no other country has so thoroughly adopted the automobile as its favorite means of transportation. for leasing and rental agencies, heavy duty trucks, construction and environmental equipment. 1st Source Bank has 60 banking centers located in 15 counties; Trustcorp Mortgage has 7 offices located 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 the 1st Source Bank Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Finance Group has 23 outlets located nationwide. 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 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 Boenning & Scattergood, Inc.; Crowell Crowell can refer to: People
Places: In England:
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.; Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. & Company; NatCity Investments; Sandler Sandler is the surname of:
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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 third quarter, 2003 on the floating rate securities is 3.16 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, Incorporated. 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.
1st SOURCE CORPORATION
2nd QUARTER 2003 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands except Per Share Data)
3 Months Ended 6 Months Ended
June 30 June 30
2003 2002 2003 2002
END OF PERIOD BALANCES
Assets $3,294,473 $3,442,347
Loans 2,098,788 2,376,043
Deposits 2,643,744 2,791,336
Reserve for Loan Losses 63,194 57,420
Intangible Assets 27,034 29,215
Common Shareholders'
Equity 317,172 311,478
AVERAGE BALANCES
Assets $3,299,570 $3,477,245 $3,286,796 $3,483,249
Earning Assets 3,013,449 3,163,082 2,995,225 3,168,943
Investments 670,173 643,147 663,215 646,116
Loans 2,112,248 2,392,107 2,131,930 2,393,975
Deposits 2,625,319 2,786,071 2,604,273 2,777,294
Interest Bearing
Liabilities 2,500,961 2,778,062 2,508,611 2,779,655
Common Shareholders'
Equity 315,934 309,104 313,887 310,399
INCOME STATEMENT DATA
Net Interest Income $ 26,740 $ 29,952 $ 53,296 $ 60,493
Net Interest Income
- FTE 27,504 30,752 54,816 62,094
Provision for
Loan Losses 4,901 10,750 10,451 22,559
Noninterest Income 21,918 17,942 41,957 36,624
Noninterest Expense 37,275 33,663 72,077 65,908
Net Income 4,690 2,767 9,150 6,975
PER SHARE DATA
Basic Net Income
Per Common Share $ 0.22 $ 0.13 $ 0.43 $ 0.33
Diluted Net Income
Per Common Share 0.22 0.13 0.43 0.33
Cash Dividends
Per Common Share 0.090 0.090 0.180 0.180
Book Value
Per Common Share 15.05 14.86 15.05 14.86
Market Value -- High 19.500 26.890 19.500 26.890
Market Value -- Low 12.570 21.000 12.570 19.750
Basic Weighted
Avg Common Shares
Outstanding 21,071,946 20,950,747 21,036,329 20,909,450
Diluted Weighted
Avg Common Shares
Outstanding 21,407,824 21,368,441 21,368,940 21,297,194
KEY RATIOS
Return on Average Assets 0.57% 0.32% 0.56% 0.40%
Return on Average Common
Shareholders' Equity 5.95 3.59 5.88 4.53
Average Common
Shareholders' Equity
to Average Assets 9.58 8.89 9.55 8.91
End of Period Tangible
Common Equity to
Tangible Assets 8.88 8.27 8.88 8.27
Net Interest Margin 3.66 3.90 3.69 3.95
Efficiency: Expense
to Revenue 72.18 64.82 70.95 61.77
Net Charge Offs
to Average Loans 0.67 1.88 0.61 1.92
Loan Loss Reserve
to Loans 3.01 2.42 3.01 2.42
Nonperforming Assets
to Loans and Leases 2.67 2.45 2.67 2.45
ASSET QUALITY
Loans Past Due
90 Days or More $ 289 $ 411
Non-accrual Loans 41,930 51,483
Other Real Estate Owned 3,213 3,362
Repossessions 12,583 4,591
Equipment Owned Under Operating Leases 168 1,149
Total Nonperforming Assets 58,183 60,996
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
1st Source Corporation and Subsidiaries
(Unaudited - Dollars in thousands)
June 30, June 30,
2003 2002
ASSETS
Cash and due from banks $ 122,422 $ 91,453
Federal funds sold and interest bearing
deposits with other banks 61,351 23,411
Investment securities available-for-sale
(amortized cost of $676,431 and $636,598
at June 30, 2003 and 2002, respectively) 684,926 645,681
Trading account securities 13,303 --
Mortgages held for sale 125,724 84,916
Loans - net of unearned discount
Commercial and agricultural loans 427,760 465,114
Truck and automobile financing 486,712 438,262
Aircraft financing 288,110 409,012
Construction equipment financing 270,582 353,089
Loans secured by real estate 527,047 593,672
Consumer loans 98,577 116,894
------------ ------------
Total Loans 2,098,788 2,376,043
Reserve for loan losses (63,194) (57,420)
------------ ------------
Net Loans 2,035,594 2,318,623
Equipment owned under operating leases,
net of accumulated depreciation 80,135 109,467
Premises and equipment 39,376 42,008
Other assets 131,642 126,788
------------ ------------
Total Assets $ 3,294,473 $ 3,442,347
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest bearing $ 444,705 $ 352,454
Interest bearing 2,199,039 2,438,882
------------ ------------
Total Deposits 2,643,744 2,791,336
Federal funds purchased and securities
sold under agreements to repurchase 172,586 194,601
Other short-term borrowings 35,707 39,619
Long-term debt 17,253 11,818
Guaranteed junior subordinated debentures 54,750 44,750
Other liabilities 53,261 48,745
------------ ------------
Total Liabilities 2,977,301 3,130,869
Shareholders' equity:
Preferred stock-no par value -- --
Common stock-no par value 7,578 7,579
Capital surplus 214,001 214,001
Retained earnings 95,855 91,651
Cost of common stock in treasury (5,535) (7,382)
Accumulated other comprehensive income 5,273 5,629
------------ ------------
Total Shareholders' Equity 317,172 311,478
------------ ------------
Total Liabilities and
Shareholders' Equity $ 3,294,473 $ 3,442,347
============ ============
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
1st Source Corporation and Subsidiaries
(Unaudited - Dollars in thousands)
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
INTEREST AND FEE INCOME
Loans $ 36,103 $ 43,134 $ 72,713 $ 88,324
Investment securities:
Taxable 4,710 5,586 9,244 11,322
Tax-exempt 1,445 1,550 2,880 3,092
Other 295 127 445 198
-------- -------- -------- --------
Total Interest Income 42,553 50,397 85,282 102,936
INTEREST EXPENSE
Deposits 13,187 18,227 26,958 37,906
Short-term borrowings 1,498 1,211 2,762 2,528
Guaranteed preferred beneficial
interests in the Company's
subordinated debentures 941 794 1,881 1,585
Long-term debt 187 213 385 424
-------- -------- -------- --------
Total Interest Expense 15,813 20,445 31,986 42,443
-------- -------- -------- --------
Net Interest Income 26,740 29,952 53,296 60,493
Provision for loan losses 4,901 10,750 10,451 22,559
-------- -------- -------- --------
Net Interest Income After
Provision for Loan Losses 21,839 19,202 42,845 37,934
NONINTEREST INCOME
Trust fees 2,736 2,661 5,376 5,321
Service charges on
deposit accounts 3,922 3,684 7,646 7,155
Loan servicing and sale income 4,445 1,124 7,651 3,579
Equipment rental income 6,455 7,464 13,226 14,744
Other income 4,635 3,009 8,613 6,313
Investment securities and
other investment losses (275) 0 (555) (488)
-------- -------- -------- --------
Total Noninterest Income 21,918 17,942 41,957 36,624
-------- -------- -------- --------
NONINTEREST EXPENSE
Salaries and
employee benefits 18,290 16,417 35,537 32,995
Net occupancy expense 1,785 1,678 3,649 3,380
Furniture and
equipment expense 2,677 2,626 5,318 5,355
Depreciation -- leased
equipment 5,050 5,966 10,408 12,113
Supplies and communications 1,558 1,594 3,069 3,261
Repossession valuation
adjustments, loan collection
and repossession expenses 3,972 1,438 5,570 1,875
Other 3,943 3,944 8,526 6,929
-------- -------- -------- --------
Total Noninterest Expense 37,275 33,663 72,077 65,908
-------- -------- -------- --------
Income Before Income Taxes 6,482 3,481 12,725 8,650
Income Taxes 1,792 714 3,575 1,675
-------- -------- -------- --------
Net Income $ 4,690 $ 2,767 $ 9,150 $ 6,975
======== ======== ======== ========
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) Contact us at shareholder@1stsource.com. |
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