1st Source Corporation (NASDAQ:SRCE), parent company of 1st Source Bank, today reported net income of $15.63 million for the second quarter of 2015, up 7.84% over the $14.49 million earned in the second quarter of 2014. Year to date, net income was $29.14 million, up 3.61% compared to the first six months of last year. Diluted net income per common share for the second quarter amounted to $0.59, up 9.26% compared to the $0.54 in the second quarter of 2014. Diluted net income per common share for the first half of 2015 was $1.10, an increase of 5.77% compared to the $1.04 earned a year earlier. (All share and per share information has been adjusted for a 10% stock dividend declared on July 22, 2015, unless otherwise noted.)
At its July 2015 meeting, the Board of Directors approved a cash dividend of $0.18 per common share (unadjusted). The cash dividend is payable to shareholders of record on August 4, 2015. The Board also approved a ten percent (10%) stock dividend of 1st Source common stock. The stock dividend is payable to shareholders of record on August 5, 2015. Both the cash and the stock dividend will be paid on August 14, 2015.
According to Christopher J. Murphy, III, Chairman, "It was a solid quarter for 1st Source as we achieved record quarterly net income of $15.63 million, up 7.84% from one year ago. Credit quality continues to be strong with nonperforming assets reduced by 47.14% to $21.72 million from $41.09 million a year ago and we saw steady growth in loans and deposits. The quarter also benefited from net interest recoveries. We look forward to the remainder of 2015 as the economy continues to improve."
"This quarter we opened our 81st banking center in a high traffic area of Elkhart, Indiana, and we started construction on a new banking center in the heart of downtown New Haven, Indiana. Additionally, next week we will open a location in Portage, Michigan, our second banking center in the greater Kalamazoo, Michigan market. We continue to add new clients every day by staying true to our mission of helping our clients achieve security, build wealth and realize their dreams and by giving straight talk and sound advice, keeping their best interests in mind for the long term."
The net interest margin was 3.64% for the second quarter of 2015 versus 3.59% for the same period in 2014. The net interest margin was 3.61% for the six months ended June 30, 2015, versus 3.59% for the same period in 2014. Tax-equivalent net interest income was $42.07 million for the second quarter of 2015, compared to the $40.62 million from 2014’s second quarter. For the first six months of 2015, tax equivalent net interest income was $81.93 million, compared to $79.71 million for the first six months of 2014.
The reserve for loan and lease losses as of June 30, 2015 was 2.25% of total loans and leases compared to 2.38% at June 30, 2014. Net recoveries of $0.68 million were recorded for the second quarter of 2015 compared with net recoveries of $1.22 million in the same quarter a year ago. Year to date, net recoveries of $0.35 million have been recorded in 2015, compared to net recoveries of $1.92 million for the first half of 2014. The provision for loan and lease losses was $0.81 million for the second quarter of 2015, compared with $2.54 million for the same period in 2014. For the first six months of 2015, the provision for loan and lease losses was $1.17 million compared with $3.35 million for the first six months of 2014. The ratio of nonperforming assets to net loans and leases improved to 0.55% as of June 30, 2015, compared to 1.08% on June 30, 2014.
Total assets at the end of the second quarter of 2015 were $5.01 billion, up 1.79% from the $4.93 billion a year ago. Total loans and leases were $3.85 billion, up 3.47% from June 30, 2014. Total deposits were $3.96 billion, up 3.85% from the comparable figure at June 30, 2014. As of June 30, 2015, the common equity-to-assets ratio was 12.60%, compared to 12.06% a year ago and the tangible common equity-to-tangible assets ratio was 11.09% compared to 10.50% a year earlier.
Noninterest income for the second quarter of 2015 was $21.53 million, an increase of 12.02% from the same period in 2014. For the first six months of 2015, noninterest income was $41.28 million, up 6.90% compared to 2014. Noninterest income increased primarily as a result of increased equipment rental income and trust fees.
Noninterest expense was $38.24 million for the second quarter of 2015, up 11.09% from the second quarter of 2014. For the six months ended June 30, 2015, noninterest expense was $76.30 million, up 8.39% compared with $70.40 million for the same period in 2014. Noninterest expense increased primarily as a result of higher salary expense, group insurance costs and depreciation on leased equipment.
1st Source common stock is traded on the NASDAQ Global Select Market under “SRCE” and appears in the National Market System tables in many daily newspapers under the code name “1st Src.” Since 1863, 1st Source has been committed to the success of the communities it serves. For more information, visit www.1stsource.com.
1st Source serves the northern half of Indiana and southwest Michigan and is the largest locally controlled financial institution headquartered in the area. While delivering a comprehensive range of consumer and commercial banking services through its community bank offices, 1st Source has distinguished itself with highly personalized services. 1st Source Bank also competes for business nationally by offering specialized financing services for new and used private and cargo aircraft, automobiles for leasing and rental agencies, medium and heavy duty trucks, and construction equipment. The Corporation includes 81 community banking centers in 17 counties, 8 trust and wealth management locations, 8 1st Source Insurance offices, as well as 22 specialty finance locations nationwide.
In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this press release contains certain non-GAAP financial measures. 1st Source Corporation believes that providing non-GAAP financial measures provides investors with information useful to understanding our financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on “tangible equity” which is “common shareholders’ equity” excluding intangible assets.
Except for historical information contained herein, the matters discussed in this document express “forward-looking statements.” Generally, the words “believe,” “contemplate,” “seek,” “plan,” “possible,” “assume,” “expect,” “intend,” “targeted,” “continue,” “remain,” “estimate,” “anticipate,” “project,” “will,” “should,” “indicate,” “would,” “may” 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.