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     117  0 Kommentare 1st Source Corporation Reports Earnings for Full Year and Fourth Quarter 2020, Cash Dividend Increased, History of Increased Dividends Continues

    1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported net income of $81.44 million for 2020, a decrease of 11.44% compared to $91.96 million earned in 2019. Fourth quarter net income was $26.46 million, an increase of 20.61% compared to $21.94 million earned in the fourth quarter of 2019. The annual net income comparison was adversely impacted by an increased provision for credit losses of $20.17 million primarily due to the negative impact on our clients from COVID-19, sizeable impairments in a few accounts, and higher special attention loan balances.

    Diluted net income per common share for the year was $3.17, down 11.20% from the $3.57 earned a year earlier. Diluted net income per common share for the fourth quarter was $1.03, up 19.77% from the $0.86 earned in the fourth quarter of the previous year.

    At its January 2021 meeting, the Board of Directors approved a cash dividend of $0.29 per common share, up 3.57% from the $0.28 per common share declared in the previous quarter and equal to that declared a year ago. The cash dividend is payable to shareholders of record on February 2, 2021 and will be paid on February 12, 2021.

    Christopher J. Murphy III, Chairman, President and Chief Executive Officer, commented, “Given the unique challenges presented by the COVID-19 pandemic during 2020, I am proud of my colleagues for keeping themselves and our clients safe while delivering great client service. We helped our communities and clients by providing over 3,500 Paycheck Protection Program (PPP) loans for over $597 million, keeping businesses going and people employed. At the end of the year, $236 million of these loans had been forgiven. Over half of our PPP loans were for less than $50,000, so we are truly serving the small businesses in our communities. Considering the challenges of the COVID-19 pandemic and the reduced interest rate environment the Federal Reserve set in motion to stimulate the economy, I am pleased we were able to achieve our third highest year of net income and the 33rd consecutive year of dividend growth. We were glad to see continued economic improvement during the fourth quarter which led to providing $4.97 million to the allowance for loan and lease losses (our lowest quarter of the year for the credit loss provision) as we continue to work through the immediate and longer term negative impacts on our clients from the coronavirus pandemic.

    “We spent the final weeks of the year monitoring the legislative progress on the Coronavirus Response and Relief Supplemental Appropriations Act, which included another round of PPP loans. We were pleased the legislation was finalized and enacted on December 27, 2020. We are now actively helping our clients work through the application process, with special attention paid to women-owned and minority-owned small businesses that have been statistically underserved nationally during the CARES Act PPP efforts.

    “At 1st Source, one of our foundational values is Community Leadership. We encourage our team members and leaders to support the organizations and causes they are passionate about, and to serve their communities in the ways they are able. The pandemic certainly had an effect on volunteer opportunities and events that often bring people together to support those in need. But I am pleased to report it did not stop our colleagues from doing what they could, when and how they could, throughout the year. During 2020, 1st Source employees volunteered over 12,000 hours of their time to such causes, and collectively, the 1st Source Foundation and 1st Source Bank donated over $2 million to community organizations, much of which was directed toward COVID-19 relief and support efforts for those directly impacted by the pandemic.

    “Throughout the pandemic, our focus has remained on keeping our clients, our colleagues, and families safe so we can deliver the highest level of service. All safety measures we put in place in the spring of 2020 have proven successful in stopping the spread among our staff and clients, and we plan to keep such measures in place until we are confident the well-being of all those we employ and serve can be protected by other means. As always, we will continue to review and analyze data from local health departments to make the best decisions possible for the health and safety of our team members, clients and communities,” Mr. Murphy concluded.

    FULL YEAR AND FOURTH QUARTER 2020 FINANCIAL RESULTS

    Loans

    Annual average loans and leases of $5.46 billion increased $463.28 million, up 9.27% from the full year 2019. Quarterly average loans and leases of $5.52 billion increased $471.07 million, up 9.33% in the fourth quarter of 2020 from the year ago quarter and have decreased $151.91 million from the third quarter. Loan growth is primarily from Paycheck Protection Program (PPP) originations when compared to 2019. As expected, the decrease during the fourth quarter of 2020 compared to the previous quarter was due to $236.25 million in PPP forgiveness by the SBA as we assisted our clients with the relief they sought from the government. As of the end of December, we had submitted PPP loan forgiveness requests to the SBA for more than 60% of the total PPP loan amounts we funded.

    COVID-19 related loan modifications across our portfolios (including those that were in the process of receiving or we expect to receive an extension) were $168 million at December 31, 2020, compared to $195 million at September 30, 2020. Our transportation (particularly auto rental and charter bus) clients and hotel industry clients remain severely impacted by the COVID-19 pandemic and account for approximately 75% of the year-end COVID-19 related loan modification balances.

    Deposits

    Annual average deposits for 2020 were $5.74 billion, an increase of $459.87 million, up 8.71% from 2019. Quarterly average deposits of $5.97 billion grew $555.35 million, up 10.26% for the quarter ended December 31, 2020 compared to the year ago quarter and have increased $80.34 million, up 1.36% compared to the third quarter. Deposit growth is primarily from PPP loan fundings and increased consumer deposit levels compared to 2019.

    Net Interest Income and Net Interest Margin

    For the twelve months of 2020, tax-equivalent net interest income was $226.36 million, an increase of $1.81 million, up 0.81% compared to the full year 2019. Fourth quarter 2020 tax-equivalent net interest income of $62.23 million increased $6.78 million, or 12.22% from the fourth quarter a year ago and increased $7.24 million, or 13.16% from the third quarter.

    Net interest margin for the year ending December 31, 2020 was 3.38%, a decrease of 29 basis points from the 3.67% for the year ending December 31, 2019. Net interest margin on a tax-equivalent basis for the year ending December 31, 2020 was 3.39%, a decrease of 29 basis points from the 3.68% for the year ending December 31, 2019. The margin continues to experience pressure from numerous Federal Reserve interest rate decreases during the second half of 2019 and first three months of 2020.

    Fourth quarter 2020 net interest margin was 3.54%, an improvement of three basis points from the 3.51% for the same period in 2019 and an increase of 35 basis points from the third quarter. Fourth quarter 2020 net interest margin on a fully tax-equivalent basis was 3.55%, an increase of three basis points from the 3.52% for the same period in 2019 and an increase of 35 basis points from the 3.20% in the third quarter. The increased margin in the fourth quarter compared to the previous quarter was primarily due to accelerated PPP loan origination fee amortization due to SBA forgiveness. We have recognized $12.06 million in PPP loan fees during 2020, $7.84 million of which was recognized during the fourth quarter compared to $2.41 million during the third quarter.

    The PPP loan impact on the tax-equivalent net interest margin was a positive five basis points for the twelve months ended December 31, 2020, and a positive 27 basis points for the fourth quarter. PPP loans caused a six basis points reduction for the third quarter due to the low interest rate and fees accrued compared to our base business.

    Noninterest Income

    Noninterest income for the twelve months ended December 31, 2020 was $103.89 million, up $2.76 million or 2.73% compared to the twelve months ended December 31, 2019. Fourth quarter 2020 noninterest income of $25.99 million increased $0.41 million, or 1.60% from the fourth quarter a year ago and decreased $2.06 million or 7.33% from the third quarter.

    Noninterest income during the twelve months ended December 31, 2020 was higher compared to a year ago mainly from improved mortgage banking income driven by gains on a higher volume of loan sales and increased partnership investment gains. These positives were offset by reduced equipment rental income due to a decrease in the size of the average equipment rental portfolio as demand for leases declined and lower service charges on deposit accounts due to fewer overdraft and non-sufficient fund transactions in 2020 compared to 2019. Additionally, we recognized $0.81 million of impairment charges on our mortgage servicing rights during 2020 as prepayment speeds accelerated.

    The decrease in noninterest income from the third quarter was mainly due to a reduction in mortgage banking income driven by a lower volume of loan sales and lower claim proceeds on bank-owned life insurance offset by higher partnership investment gains, increased trust and wealth advisory fees as market values improved, and increased customer swap fees with solar loan growth.

    Noninterest Expense

    Noninterest expense for the twelve months ended December 31, 2020 was $187.37 million, a decrease of $1.64 million, or 0.87% compared to the same period a year ago. Fourth quarter 2020 noninterest expense of $48.96 million decreased $0.38 million, or 0.77% from the fourth quarter a year ago and increased $1.92 million or 4.08% from the prior quarter. Excluding depreciation on leased equipment, noninterest expenses were up 1.58% and 2.00% for the fourth quarter and twelve months ended December 31, 2020, respectively.

    The decrease in noninterest expense for 2020 from 2019 was primarily due to lower leased equipment depreciation resulting from a reduction in the average equipment rental portfolio, reduced business development expenses as travel and entertainment were curtailed with the pandemic, fewer negative valuation adjustments on repossessed assets, decreased group insurance costs, and less professional consulting fees. These increases were offset by higher salaries as a result of normal merit increases, a one-time special award made to most employees at the end of 2020 as recognition for the dedication they have shown in serving our clients and embracing their role as essential workers. In addition, we incurred increased mortgage origination commissions on higher production as well as higher FDIC insurance premiums due to FDIC assessment credits received in 2019.

    The increase in noninterest expense from the third quarter was mainly due to higher salaries as a result of the one-time special award mentioned above to most employees at the end of 2020 and increased group insurance costs. These increases were offset by reduced valuation adjustments on repossessed assets, higher gains on the sale of operating lease equipment and lower marketing expenses due to fewer marketing promotions.

    Non-recurring 2020 items which added to net income included $0.55 million in FDIC insurance premium credits received and bank-owned life insurance claims of $0.36 million. These additions to income were offset by $1.52 million of negative valuation adjustments on repossessed assets, $0.81 million in mortgage servicing rights impairment charges, special salary awards to employees of $0.89 million and a $0.68 million impairment charge on leased equipment.

    Credit

    In the fourth quarter, we adopted the Current Expected Credit Loss (CECL) methodology for calculating the allowance for credit losses which resulted in a four basis point increase to the allowance for loan and lease losses at December 31, 2020. The allowance for loan and lease losses as of December 31, 2020 was 2.56% of total loans and leases compared to 2.43% at September 30, 2020 and 2.19% at December 31, 2019. The allowance calculation includes PPP loans which are guaranteed by the SBA. Excluding those loans from the calculation results in an allowance of 2.73% at December 31, 2020 compared to 2.69% at September 30, 2020.

    Net charge-offs that have been recorded for the full year of 2020 were $9.19 million compared to net charge-offs of $5.05 million in 2019. This resulted in a charge-off ratio of 0.17% for 2020 compared to 0.10% for 2019. The majority of the 2020 net charge-offs were related to one relationship within the construction equipment portfolio and numerous bus relationships in the auto and light truck portfolio that have been severely impacted by the pandemic shut down of events and tourism. Net charge-offs of $3.72 million were recorded for the fourth quarter of 2020 compared with net charge-offs of $0.64 million in the same quarter a year ago and down slightly from the $3.77 million of net charge-offs in the third quarter.

    The provision for credit losses was $36.00 million for the twelve months ended December 31, 2020 and $4.97 million for the fourth quarter of 2020, an increase of $20.17 million and $2.02 million, respectively, compared with the same periods in 2019. The ratio of nonperforming assets to loans and leases was 1.16% as of December 31, 2020, compared to 1.33% on September 30, 2020 and 0.37% on December 31, 2019. Excluding PPP loans, the ratio of nonperforming assets to loans and leases was 1.24% at December 31, 2020 compared to 1.48% at September 30, 2020. Nonperforming assets saw improvement in the fourth quarter as a result of lower nonaccrual loans and the sale of a long held repossessed aircraft.

    Capital

    As of December 31, 2020, the common equity-to-assets ratio was 12.12%, compared to 12.04% at September 30, 2020 and 12.51% a year ago. The tangible common equity-to-tangible assets ratio was 11.10% at December 31, 2020 compared to 11.01% at September 30, 2020 and 11.38% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 13.06% at December 31, 2020 compared to 12.92% at September 30, 2020 and 12.55% a year ago. During the fourth quarter of 2020, 166,446 shares were repurchased for treasury reducing common shareholders’ equity by $6.42 million. Additionally, during the fourth quarter, with the adoption of CECL, we recognized a one-time cumulative effect adjustment which reduced retained earnings by $2.55 million, net of deferred taxes, effective January 1, 2020. CECL resulted in a two-to-three basis point reduction to our regulatory capital ratios as of December 31, 2020.

    ABOUT 1ST SOURCE CORPORATION

    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 its clients, individuals, businesses and 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 79 banking centers, 18 1st Source Bank Specialty Finance Group locations nationwide, eight Wealth Advisory Services locations and ten 1st Source Insurance offices.

    FORWARD LOOKING STATEMENTS

    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.

    NON-GAAP FINANCIAL MEASURES

    The accounting and reporting policies of 1st Source conform to generally accepted accounting principles (“GAAP”) in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures are used by management to evaluate and measure the Company’s performance. Although these non-GAAP financial measures are frequently used by investors to evaluate a financial institution, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. These include taxable-equivalent net interest income (including its individual components), net interest margin (including its individual components), the efficiency ratio, tangible common equity-to-tangible assets ratio and tangible book value per common share. Management believes that these measures provide users of the Company’s financial information a more meaningful view of the performance of the interest-earning assets and interest-bearing liabilities and of the Company’s operating efficiency. Other financial holding companies may define or calculate these measures differently.

    Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent (“FTE”) basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a FTE basis is also used in the calculation of the Company’s efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses and lease depreciation), measures how much it costs to produce one dollar of revenue. Securities gains or losses and lease depreciation are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity-to-tangible assets ratio and tangible book value per common share as useful measurements of the Company’s equity.

    See the table marked “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of certain non-GAAP financial measures used by the Company with their most closely related GAAP measures.

    Category: Earnings

    (charts attached)

     

    1st SOURCE CORPORATION

    4th QUARTER 2020 FINANCIAL HIGHLIGHTS

    (Unaudited - Dollars in thousands, except per share data)

     

    Three Months Ended

     

    Twelve Months Ended

     

    December 31,

    September 30,

    December 31,

     

    December 31,

    December 31,

     

    2020

    2020

    2019

     

    2020

    2019

    AVERAGE BALANCES

     

     

     

     

     

     

    Assets

    $

    7,402,431

     

    $

    7,281,542

     

    $

    6,708,475

     

     

    $

    7,120,009

     

    $

    6,528,274

     

    Earning assets

    6,981,460

     

    6,841,720

     

    6,258,938

     

     

    6,684,246

     

    6,104,673

     

    Investments

    1,098,072

     

    1,057,780

     

    1,044,917

     

     

    1,058,060

     

    1,014,659

     

    Loans and leases

    5,517,707

     

    5,669,615

     

    5,046,639

     

     

    5,463,436

     

    5,000,161

     

    Deposits

    5,969,776

     

    5,889,434

     

    5,414,423

     

     

    5,736,602

     

    5,276,736

     

    Interest bearing liabilities

    4,635,661

     

    4,553,503

     

    4,483,686

     

     

    4,546,548

     

    4,440,905

     

    Common shareholders’ equity

    884,530

     

    876,992

     

    824,361

     

     

    865,278

     

    799,736

     

    Total equity

    921,913

     

    913,926

     

    844,447

     

     

    896,956

     

    808,785

     

    INCOME STATEMENT DATA

     

     

     

     

     

     

    Net interest income

    $

    62,107

     

    $

    54,868

     

    $

    55,296

     

     

    $

    225,820

     

    $

    223,866

     

    Net interest income - FTE(1)

    62,234

     

    54,996

     

    55,456

     

     

    226,363

     

    224,552

     

    Provision for credit losses

    4,970

     

    9,303

     

    2,951

     

     

    36,001

     

    15,833

     

    Noninterest income

    25,985

     

    28,041

     

    25,577

     

     

    103,889

     

    101,130

     

    Noninterest expense

    48,964

     

    47,043

     

    49,346

     

     

    187,367

     

    189,009

     

    Net income

    26,463

     

    20,054

     

    21,954

     

     

    81,461

     

    92,015

     

    Net income available to common shareholders

    26,464

     

    20,058

     

    21,941

     

     

    81,437

     

    91,960

     

    PER SHARE DATA

     

     

     

     

     

     

    Basic net income per common share

    $

    1.03

     

    $

    0.78

     

    $

    0.86

     

     

    $

    3.17

     

    $

    3.57

     

    Diluted net income per common share

    1.03

     

    0.78

     

    0.86

     

     

    3.17

     

    3.57

     

    Common cash dividends declared

    0.28

     

    0.28

     

    0.29

     

     

    1.13

     

    1.10

     

    Book value per common share(2)

    34.93

     

    34.35

     

    32.47

     

     

    34.93

     

    32.47

     

    Tangible book value per common share(1)

    31.62

     

    31.06

     

    29.18

     

     

    31.62

     

    29.18

     

    Market value - High

    41.10

     

    38.26

     

    53.42

     

     

    52.16

     

    53.42

     

    Market value - Low

    30.33

     

    28.72

     

    44.12

     

     

    26.07

     

    39.11

     

    Basic weighted average common shares outstanding

    25,492,140

     

    25,552,374

     

    25,509,240

     

     

    25,527,154

     

    25,600,138

     

    Diluted weighted average common shares outstanding

    25,492,140

     

    25,552,374

     

    25,509,240

     

     

    25,527,154

     

    25,600,138

     

    KEY RATIOS

     

     

     

     

     

     

    Return on average assets

    1.42

    %

    1.10

    %

    1.30

    %

     

    1.14

    %

    1.41

    %

    Return on average common shareholders’ equity

    11.90

     

    9.10

     

    10.56

     

     

    9.41

     

    11.50

     

    Average common shareholders’ equity to average assets

    11.95

     

    12.04

     

    12.29

     

     

    12.15

     

    12.25

     

    End of period tangible common equity to tangible assets(1)

    11.10

     

    11.01

     

    11.38

     

     

    11.10

     

    11.38

     

    Risk-based capital - Common Equity Tier 1(3)

    13.06

     

    12.92

     

    12.55

     

     

    13.06

     

    12.55

     

    Risk-based capital - Tier 1(3)

    14.73

     

    14.48

     

    13.64

     

     

    14.73

     

    13.64

     

    Risk-based capital - Total(3)

    15.99

     

    15.74

     

    14.90

     

     

    15.99

     

    14.90

     

    Net interest margin

    3.54

     

    3.19

     

    3.51

     

     

    3.38

     

    3.67

     

    Net interest margin - FTE(1)

    3.55

     

    3.20

     

    3.52

     

     

    3.39

     

    3.68

     

    Efficiency ratio: expense to revenue

    55.58

     

    56.74

     

    61.02

     

     

    56.83

     

    58.16

     

    Efficiency ratio: expense to revenue - adjusted(1)

    53.32

     

    54.18

     

    57.87

     

     

    54.20

     

    54.65

     

    Net charge offs to average loans and leases

    0.27

     

    0.26

     

    0.05

     

     

    0.17

     

    0.10

     

    Loan and lease loss allowance to loans and leases

    2.56

     

    2.43

     

    2.19

     

     

    2.56

     

    2.19

     

    Nonperforming assets to loans and leases

    1.16

     

    1.33

     

    0.37

     

     

    1.16

     

    0.37

     

     

     

     

     

     

     

     

     

    December 31,

    September 30,

    June 30,

     

    March 31,

    December 31,

     

    2020

    2020

    2020

     

    2020

    2019

    END OF PERIOD BALANCES

     

     

     

     

     

     

    Assets

    $

    7,316,411

     

    $

    7,290,949

     

    $

    7,365,146

     

     

    $

    6,735,118

     

    $

    6,622,776

     

    Loans and leases

    5,489,301

     

    5,627,036

     

    5,692,322

     

     

    5,129,514

     

    5,085,527

     

    Deposits

    5,946,028

     

    5,896,855

     

    5,993,456

     

     

    5,275,911

     

    5,357,326

     

    Allowance for loan and lease losses

    140,654

     

    136,817

     

    131,283

     

     

    120,798

     

    111,254

     

    Goodwill and intangible assets

    83,948

     

    83,953

     

    83,959

     

     

    83,964

     

    83,971

     

    Common shareholders’ equity

    886,845

     

    877,754

     

    864,995

     

     

    850,897

     

    828,277

     

    Total equity

    930,670

     

    915.015

     

    901.653

     

     

    877.302

     

    848,636

     

    ASSET QUALITY

     

     

     

     

     

     

    Loans and leases past due 90 days or more

    $

    115

     

    $

    81

     

    $

    256

     

     

    $

    191

     

    $

    309

     

    Nonaccrual loans and leases

    60,388

     

    70,595

     

    62,800

     

     

    26,301

     

    9,789

     

    Other real estate

    359

     

    303

     

    303

     

     

    362

     

    522

     

    Repossessions

    1,976

     

    4,639

     

    6,132

     

     

    9,020

     

    8,623

     

    Equipment owned under operating leases

    1,695

     

    136

     

    57

     

     

     

     

    Total nonperforming assets

    $

    64,533

     

    $

    75,754

     

    $

    69,548

     

     

    $

    35,874

     

    $

    19,243

     

    (1) See “Reconciliation of Non-GAAP Financial Measures” for more information on this performance measure/ratio.
    (2) Calculated as common shareholders’ equity divided by common shares outstanding at the end of the period.
    (3) Calculated under banking regulatory guidelines.

     

    1st SOURCE CORPORATION

    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

    (Unaudited - Dollars in thousands)

     

    December 31,

     

    September 30,

     

    June 30,

     

    December 31,

     

    2020

     

    2020

     

    2020

     

    2019

    ASSETS

     

     

     

     

     

     

     

    Cash and due from banks

    $

    74,186

     

     

    $

    62,575

     

     

    $

    67,591

     

     

    $

    67,215

     

    Federal funds sold and interest bearing deposits with other banks

    168,861

     

     

    91,641

     

     

    112,645

     

     

    16,150

     

    Investment securities available-for-sale

    1,197,467

     

     

    1,083,427

     

     

    1,055,797

     

     

    1,040,583

     

    Other investments

    27,429

     

     

    27,674

     

     

    30,619

     

     

    28,414

     

    Mortgages held for sale

    12,885

     

     

    20,990

     

     

    36,508

     

     

    20,277

     

    Loans and leases, net of unearned discount:

     

     

     

     

     

     

     

    Commercial and agricultural

    1,478,722

     

     

    1,681,519

     

     

    1,710,712

     

     

    1,132,791

     

    Auto and light truck

    542,369

     

     

    527,582

     

     

    563,606

     

     

    588,807

     

    Medium and heavy duty truck

    279,172

     

     

    271,248

     

     

    284,432

     

     

    294,824

     

    Aircraft

    861,460

     

     

    806,162

     

     

    782,160

     

     

    784,040

     

    Construction equipment

    714,888

     

     

    723,596

     

     

    739,027

     

     

    705,451

     

    Commercial real estate

    969,864

     

     

    961,550

     

     

    942,971

     

     

    908,177

     

    Residential real estate and home equity

    511,379

     

     

    519,881

     

     

    531,972

     

     

    532,003

     

    Consumer

    131,447

     

     

    135,498

     

     

    137,442

     

     

    139,434

     

    Total loans and leases

    5,489,301

     

     

    5,627,036

     

     

    5,692,322

     

     

    5,085,527

     

    Allowance for loan and lease losses*

    (140,654)

     

     

    (136,817)

     

     

    (131,283)

     

     

    (111,254)

     

    Net loans and leases

    5,348,647

     

     

    5,490,219

     

     

    5,561,039

     

     

    4,974,273

     

    Equipment owned under operating leases, net

    65,040

     

     

    79,703

     

     

    86,183

     

     

    111,684

     

    Net premises and equipment

    49,373

     

     

    49,933

     

     

    51,486

     

     

    52,219

     

    Goodwill and intangible assets

    83,948

     

     

    83,953

     

     

    83,959

     

     

    83,971

     

    Accrued income and other assets

    288,575

     

     

    300,834

     

     

    279,319

     

     

    227,990

     

    Total assets

    $

    7,316,411

     

     

    $

    7,290,949

     

     

    $

    7,365,146

     

     

    $

    6,622,776

     

     

     

     

     

     

     

     

     

    LIABILITIES

     

     

     

     

     

     

     

    Deposits:

     

     

     

     

     

     

     

    Noninterest bearing demand

    $

    1,636,684

     

     

    $

    1,720,768

     

     

    $

    1,684,102

     

     

    $

    1,216,834

     

    Interest-bearing deposits:

     

     

     

     

     

     

     

    Interest-bearing demand

    2,059,139

     

     

    1,885,771

     

     

    1,866,415

     

     

    1,677,200

     

    Savings

    1,082,848

     

     

    992,320

     

     

    942,891

     

     

    814,794

     

    Time

    1,167,357

     

     

    1,297,996

     

     

    1,500,048

     

     

    1,648,498

     

    Total interest-bearing deposits

    4,309,344

     

     

    4,176,087

     

     

    4,309,354

     

     

    4,140,492

     

    Total deposits

    5,946,028

     

     

    5,896,855

     

     

    5,993,456

     

     

    5,357,326

     

    Short-term borrowings:

     

     

     

     

     

     

     

    Federal funds purchased and securities sold under agreements to repurchase

    143,564

     

     

    158,834

     

     

    169,483

     

     

    120,459

     

    Other short-term borrowings

    7,077

     

     

    6,740

     

     

    7,536

     

     

    25,434

     

    Total short-term borrowings

    150,641

     

     

    165,574

     

     

    177,019

     

     

    145,893

     

    Long-term debt and mandatorily redeemable securities

    81,864

     

     

    81,659

     

     

    81,760

     

     

    71,639

     

    Subordinated notes

    58,764

     

     

    58,764

     

     

    58,764

     

     

    58,764

     

    Accrued expenses and other liabilities

    148,444

     

     

    173,082

     

     

    152,494

     

     

    140,518

     

    Total liabilities

    6,385,741

     

     

    6,375,934

     

     

    6,463,493

     

     

    5,774,140

     

     

     

     

     

     

     

     

     

    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 December 31, 2020, September 30, 2020, June 30, 2020, and December 31, 2019, respectively)

    436,538

    436,538

    436,538

    436,538

    Retained earnings

    514,176

     

     

    497,419

     

     

    484,491

     

     

    463,269

     

    Cost of common stock in treasury (2,816,557, 2,652,030, 2,655,319, and 2,696,200 shares at December 31, 2020, September 30, 2020, June 30, 2020, and December 31, 2019, respectively)

    (82,240)

     

     

    (75,861)

     

     

    (75,922)

     

     

    (76,702)

     

    Accumulated other comprehensive income

    18,371

     

     

    19,658

     

     

    19,888

     

     

    5,172

     

    Total shareholders’ equity

    886,845

     

     

    877,754

     

     

    864,995

     

     

    828,277

     

    Noncontrolling interests

    43,825

     

     

    37,261

     

     

    36,658

     

     

    20,359

     

    Total equity

    930,670

     

     

    915,015

     

     

    901,653

     

     

    848,636

     

    Total liabilities and equity

    $

    7,316,411

     

     

    $

    7,290,949

     

     

    $

    7,365,146

     

     

    $

    6,622,776

     

    *December 31, 2020 calculated under ASU 2016-13, prior periods shown reflect the incurred loss calculation.

     

    1st SOURCE CORPORATION

    CONSOLIDATED STATEMENTS OF INCOME

    (Unaudited - Dollars in thousands, except per share amounts)

     

    Three Months Ended

     

    Twelve Months Ended

     

    December 31,

     

    September 30,

     

    December 31,

     

    December 31,

     

    December 31,

     

    2020

     

    2020

     

    2019

     

    2020

     

    2019

    Interest income:

     

     

     

     

     

     

     

     

     

    Loans and leases

    $

    64,113

     

     

    $

    58,318

     

     

    $

    63,259

     

     

    $

    242,772

     

     

    $

    258,348

     

    Investment securities, taxable

    3,940

     

     

    4,103

     

     

    5,189

     

     

    18,080

     

     

    20,946

     

    Investment securities, tax-exempt

    192

     

     

    207

     

     

    297

     

     

    895

     

     

    1,351

     

    Other

    333

     

     

    289

     

     

    798

     

     

    1,284

     

     

    2,232

     

    Total interest income

    68,578

     

     

    62,917

     

     

    69,543

     

     

    263,031

     

     

    282,877

     

    Interest expense:

     

     

     

     

     

     

     

     

     

    Deposits

    4,811

     

     

    6,532

     

     

    12,523

     

     

    30,459

     

     

    50,495

     

    Short-term borrowings

    90

     

     

    83

     

     

    170

     

     

    517

     

     

    1,934

     

    Subordinated notes

    824

     

     

    824

     

     

    907

     

     

    3,367

     

     

    3,677

     

    Long-term debt and mandatorily redeemable securities

    746

     

     

    610

     

     

    647

     

     

    2,868

     

     

    2,905

     

    Total interest expense

    6,471

     

     

    8,049

     

     

    14,247

     

     

    37,211

     

     

    59,011

     

    Net interest income

    62,107

     

     

    54,868

     

     

    55,296

     

     

    225,820

     

     

    223,866

     

    Provision for credit losses

    4,970

     

     

    9,303

     

     

    2,951

     

     

    36,001

     

     

    15,833

     

    Net interest income after provision for credit losses

    57,137

     

     

    45,565

     

     

    52,345

     

     

    189,819

     

     

    208,033

     

    Noninterest income:

     

     

     

     

     

     

     

     

     

    Trust and wealth advisory

    5,524

     

     

    5,153

     

     

    5,269

     

     

    21,114

     

     

    20,692

     

    Service charges on deposit accounts

    2,634

     

     

    2,336

     

     

    2,835

     

     

    9,485

     

     

    11,010

     

    Debit card

    3,990

     

     

    4,019

     

     

    3,593

     

     

    14,983

     

     

    14,209

     

    Mortgage banking

    3,549

     

     

    6,474

     

     

    1,401

     

     

    15,674

     

     

    4,698

     

    Insurance commissions

    1,624

     

     

    1,825

     

     

    1,466

     

     

    7,025

     

     

    6,761

     

    Equipment rental

    5,167

     

     

    5,593

     

     

    7,372

     

     

    23,380

     

     

    30,741

     

    Gains on investment securities available-for-sale

     

     

     

     

     

     

    279

     

     

     

    Other

    3,497

     

     

    2,641

     

     

    3,641

     

     

    11,949

     

     

    13,019

     

    Total noninterest income

    25,985

     

     

    28,041

     

     

    25,577

     

     

    103,889

     

     

    101,130

     

    Noninterest expense:

     

     

     

     

     

     

     

     

     

    Salaries and employee benefits

    27,547

     

     

    25,609

     

     

    25,382

     

     

    101,556

     

     

    97,098

     

    Net occupancy

    2,539

     

     

    2,512

     

     

    2,640

     

     

    10,276

     

     

    10,528

     

    Furniture and equipment

    6,776

     

     

    6,247

     

     

    6,475

     

     

    25,688

     

     

    24,815

     

    Depreciation — leased equipment

    4,940

     

     

    4,694

     

     

    6,006

     

     

    20,203

     

     

    25,128

     

    Professional fees

    1,576

     

     

    2,041

     

     

    2,045

     

     

    6,317

     

     

    6,952

     

    Supplies and communication

    1,234

     

     

    1,305

     

     

    1,710

     

     

    5,563

     

     

    6,454

     

    FDIC and other insurance

    851

     

     

    868

     

     

    282

     

     

    2,606

     

     

    1,795

     

    Business development and marketing

    754

     

     

    923

     

     

    1,832

     

     

    4,157

     

     

    6,303

     

    Loan and lease collection and repossession

    444

     

     

    1,054

     

     

    1,114

     

     

    3,099

     

     

    3,402

     

    Other

    2,303

     

     

    1,790

     

     

    1,860

     

     

    7,902

     

     

    6,534

     

    Total noninterest expense

    48,964

     

     

    47,043

     

     

    49,346

     

     

    187,367

     

     

    189,009

     

    Income before income taxes

    34,158

     

     

    26,563

     

     

    28,576

     

     

    106,341

     

     

    120,154

     

    Income tax expense

    7,695

     

     

    6,509

     

     

    6,622

     

     

    24,880

     

     

    28,139

     

    Net income

    26,463

     

     

    20,054

     

     

    21,954

     

     

    81,461

     

     

    92,015

     

    Net loss (income) attributable to noncontrolling interests

    1

     

     

    4

     

     

    (13)

     

     

    (24)

     

     

    (55)

     

    Net income available to common shareholders

    $

    26,464

     

     

    $

    20,058

     

     

    $

    21,941

     

     

    $

    81,437

     

     

    $

    91,960

     

    Per common share:

     

     

     

     

     

     

     

     

     

    Basic net income per common share

    $

    1.03

     

     

    $

    0.78

     

     

    $

    0.86

     

     

    $

    3.17

     

     

    $

    3.57

     

    Diluted net income per common share

    $

    1.03

     

     

    $

    0.78

     

     

    $

    0.86

     

     

    $

    3.17

     

     

    $

    3.57

     

    Cash dividends

    $

    0.28

     

     

    $

    0.28

     

     

    $

    0.29

     

     

    $

    1.13

     

     

    $

    1.10

     

    Basic weighted average common shares outstanding

    25,492,140

     

     

    25,552,374

     

     

    25,509,240

     

     

    25,527,154

     

     

    25,600,138

     

    Diluted weighted average common shares outstanding

    25,492,140

     

     

    25,552,374

     

     

    25,509,240

     

     

    25,527,154

     

     

    25,600,138

     

    *ASU 2016-13 adopted during the fourth quarter of 2020 with a cumulative effective adjustment dated January 1, 2020 therefore September 30, 2020 provision amounts reflect the incurred loss calculation.

     

    1st SOURCE CORPORATION

     

     

    DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY

     

     

    INTEREST RATES AND INTEREST DIFFERENTIAL

     

     

    (Unaudited - Dollars in thousands)

     

     

     

     

     

    Three Months Ended

     

     

     

    December 31, 2020

     

    September 30, 2020

     

    December 31, 2019

     

    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

    $

    1,056,727

     

     

    $

    3,940

     

     

    1.48

    %

     

    $

    1,012,703

     

     

    $

    4,103

     

     

    1.61

    %

     

    $

    982,839

     

     

    $

    5,189

     

     

    2.09

    %

    Tax-exempt(1)

    41,345

     

     

    237

     

     

    2.28

    %

     

    45,077

     

     

    257

     

     

    2.26

    %

     

    62,078

     

     

    365

     

     

    2.33

    %

    Mortgages held for sale

    17,844

     

     

    120

     

     

    2.68

    %

     

    26,327

     

     

    186

     

     

    2.81

    %

     

    21,489

     

     

    192

     

     

    3.54

    %

    Loans and leases, net of unearned discount(1)

    5,517,707

     

     

    64,075

     

     

    4.62

    %

     

    5,669,615

     

     

    58,210

     

     

    4.08

    %

     

    5,046,639

     

     

    63,159

     

     

    4.97

    %

    Other investments

    347,837

     

     

    333

     

     

    0.38

    %

     

    87,998

     

     

    289

     

     

    1.31

    %

     

    145,893

     

     

    798

     

     

    2.17

    %

    Total earning assets(1)

    6,981,460

     

     

    68,705

     

     

    3.92

    %

     

    6,841,720

     

     

    63,045

     

     

    3.67

    %

     

    6,258,938

     

     

    69,703

     

     

    4.42

    %

    Cash and due from banks

    75,055

     

     

     

     

     

     

    72,474

     

     

     

     

     

     

    73,438

     

     

     

     

     

    Allowance for loan and lease losses

    (143,888)

     

     

     

     

     

     

    (134,824)

     

     

     

     

     

     

    (110,209)

     

     

     

     

     

    Other assets

    489,804

     

     

     

     

     

     

    502,172

     

     

     

     

     

     

    486,308

     

     

     

     

     

    Total assets

    $

    7,402,431

     

     

     

     

     

     

    $

    7,281,542

     

     

     

     

     

     

    $

    6,708,475

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    LIABILITIES AND SHAREHOLDERS’ EQUITY

     

     

     

     

     

     

     

     

    Interest-bearing deposits

    $

    4,272,622

     

     

    $

    4,811

     

     

    0.45

    %

     

    $

    4,225,299

     

     

    $

    6,532

     

     

    0.62

    %

     

    $

    4,170,250

     

     

    $

    12,523

     

     

    1.19

    %

    Short-term borrowings

    222,699

     

     

    90

     

     

    0.16

    %

     

    187,912

     

     

    83

     

     

    0.18

    %

     

    183,244

     

     

    170

     

     

    0.37

    %

    Subordinated notes

    58,764

     

     

    824

     

     

    5.58

    %

     

    58,764

     

     

    824

     

     

    5.58

    %

     

    58,764

     

     

    907

     

     

    6.12

    %

    Long-term debt and mandatorily redeemable securities

    81,576

     

     

    746

     

     

    3.64

    %

     

    81,528

     

     

    610

     

     

    2.98

    %

     

    71,428

     

     

    647

     

     

    3.59

    %

    Total interest-bearing liabilities

    4,635,661

     

     

    6,471

     

     

    0.56

    %

     

    4,553,503

     

     

    8,049

     

     

    0.70

    %

     

    4,483,686

     

     

    14,247

     

     

    1.26

    %

    Noninterest-bearing deposits

    1,697,154

     

     

     

     

     

     

    1,664,135

     

     

     

     

     

     

    1,244,173

     

     

     

     

     

    Other liabilities

    147,703

     

     

     

     

     

     

    149,978

     

     

     

     

     

     

    136,169

     

     

     

     

     

    Shareholders’ equity

    884,530

     

     

     

     

     

     

    876,992

     

     

     

     

     

     

    824,361

     

     

     

     

     

    Noncontrolling interests

    37,383

     

     

     

     

     

     

    36,934

     

     

     

     

     

     

    20,086

     

     

     

     

     

    Total liabilities and equity

    $

    7,402,431

     

     

     

     

     

     

    $

    7,281,542

     

     

     

     

     

     

    $

    6,708,475

     

     

     

     

     

    Less: Fully tax-equivalent adjustments

     

     

    (127)

     

     

     

     

     

     

    (128)

     

     

     

     

     

     

    (160)

     

     

     

    Net interest income/margin (GAAP-derived)(1)

     

     

    $

    62,107

     

     

    3.54

    %

     

     

     

    $

    54,868

     

     

    3.19

    %

     

     

     

    $

    55,296

     

     

    3.51

    %

    Fully tax-equivalent adjustments

     

     

    127

     

     

     

     

     

     

    128

     

     

     

     

     

     

    160

     

     

     

    Net interest income/margin - FTE(1)

     

     

    $

    62,234

     

     

    3.55

    %

     

     

     

    $

    54,996

     

     

    3.20

    %

     

     

     

    $

    55,456

     

     

    3.52

    %

    (1) See “Reconciliation of Non-GAAP Financial Measures” for more information on this performance measure/ratio.

     

    1st SOURCE CORPORATION

     

     

    DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY

     

     

    INTEREST RATES AND INTEREST DIFFERENTIAL

     

     

    (Unaudited - Dollars in thousands)

     

     

     

    Twelve Months Ended

     

    December 31, 2020

     

    December 31, 2019

     

    Average
    Balance

     

    Interest
    Income/Expense

     

    Yield/
    Rate

     

    Average
    Balance

     

    Interest
    Income/Expense

     

    Yield/
    Rate

    ASSETS

     

     

     

     

     

     

     

     

     

     

     

    Investment securities available-for-sale:

     

     

     

     

     

     

     

     

     

     

     

    Taxable

    $

    1,009,794

     

     

    $

    18,080

     

     

    1.79

    %

     

    $

    945,396

     

     

    $

    20,946

     

     

    2.22

    %

    Tax-exempt(1)

    48,266

     

     

    1,105

     

     

    2.29

    %

     

    69,263

     

     

    1,662

     

     

    2.40

    %

    Mortgages held for sale

    20,628

     

     

    600

     

     

    2.91

    %

     

    15,601

     

     

    610

     

     

    3.91

    %

    Loans and leases, net of unearned discount(1)

    5,463,436

     

     

    242,505

     

     

    4.44

    %

     

    5,000,161

     

     

    258,113

     

     

    5.16

    %

    Other investments

    142,122

     

     

    1,284

     

     

    0.90

    %

     

    74,252

     

     

    2,232

     

     

    3.01

    %

    Total earning assets(1)

    6,684,246

     

     

    263,574

     

     

    3.94

    %

     

    6,104,673

     

     

    283,563

     

     

    4.65

    %

    Cash and due from banks

    71,626

     

     

     

     

     

     

    67,726

     

     

     

     

     

    Allowance for loan and lease losses

    (130,776)

     

     

     

     

     

     

    (105,340)

     

     

     

     

     

    Other assets

    494,913

     

     

     

     

     

     

    461,215

     

     

     

     

     

    Total assets

    $

    7,120,009

     

     

     

     

     

     

    $

    6,528,274

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    LIABILITIES AND SHAREHOLDERS’ EQUITY

     

     

     

     

    Interest-bearing deposits

    $

    4,205,904

     

     

    $

    30,459

     

     

    0.72

    %

     

    $

    4,105,097

     

     

    $

    50,495

     

     

    1.23

    %

    Short-term borrowings

    201,165

     

     

    517

     

     

    0.26

    %

     

    205,911

     

     

    1,934

     

     

    0.94

    %

    Subordinated notes

    58,764

     

     

    3,367

     

     

    5.73

    %

     

    58,764

     

     

    3,677

     

     

    6.26

    %

    Long-term debt and mandatorily redeemable securities

    80,715

     

     

    2,868

     

     

    3.55

    %

     

    71,133

     

     

    2,905

     

     

    4.08

    %

    Total interest-bearing liabilities

    4,546,548

     

     

    37,211

     

     

    0.82

    %

     

    4,440,905

     

     

    59,011

     

     

    1.33

    %

    Noninterest-bearing deposits

    1,530,698

     

     

     

     

     

     

    1,171,639

     

     

     

     

     

    Other liabilities

    145,807

     

     

     

     

     

     

    106,945

     

     

     

     

     

    Shareholders’ equity

    865,278

     

     

     

     

     

     

    799,736

     

     

     

     

     

    Noncontrolling interests

    31,678

     

     

     

     

     

     

    9,049

     

     

     

     

     

    Total liabilities and equity

    $

    7,120,009

     

     

     

     

     

     

    $

    6,528,274

     

     

     

     

     

    Less: Fully tax-equivalent adjustments

     

     

    (543)

     

     

     

     

     

     

    (686)

     

     

     

    Net interest income/margin (GAAP-derived)(1)

     

     

    $

    225,820

     

     

    3.38

    %

     

     

     

    $

    223,866

     

     

    3.67

    %

    Fully tax-equivalent adjustments

     

     

    543

     

     

     

     

     

     

    686

     

     

     

    Net interest income/margin - FTE(1)

     

     

    $

    226,363

     

     

    3.39

    %

     

     

     

    $

    224,552

     

     

    3.68

    %

    (1) See “Reconciliation of Non-GAAP Financial Measures” for more information on this performance measure/ratio.

     

    1st SOURCE CORPORATION

     

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

     

    (Unaudited - Dollars in thousands, except per share data)

     

     

     

     

     

     

     

     

     

     

     

    Three Months Ended

     

    Twelve Months Ended

     

     

    December 31,

    September 30,

    December 31,

     

    December 31,

    December 31,

     

     

    2020

    2020

    2019

     

    2020

    2019

    Calculation of Net Interest Margin

     

     

     

     

     

     

    (A)

    Interest income (GAAP)

    $

    68,578

     

    $

    62,917

     

    $

    69,543

     

     

    $

    263,031

     

    $

    282,877

     

     

    Fully tax-equivalent adjustments:

     

     

     

     

     

     

    (B)

    - Loans and leases

    82

     

    78

     

    92

     

     

    333

     

    375

     

    (C)

    - Tax-exempt investment securities

    45

     

    50

     

    68

     

     

    210

     

    311

     

    (D)

    Interest income - FTE (A+B+C)

    68,705

     

    63,045

     

    69,703

     

     

    263,574

     

    283,563

     

    (E)

    Interest expense (GAAP)

    6,471

     

    8,049

     

    14,247

     

     

    37,211

     

    59,011

     

    (F)

    Net interest income (GAAP) (A–E)

    62,107

     

    54,868

     

    55,296

     

     

    225,820

     

    223,866

     

    (G)

    Net interest income - FTE (D–E)

    62,234

     

    54,996

     

    55,456

     

     

    226,363

     

    224,552

     

    (H)

    Annualization factor

    3.978

     

    3.978

     

    3.967

     

     

    1.000

     

    1.000

     

    (I)

    Total earning assets

    $

    6,981,460

     

    $

    6,841,720

     

    $

    6,258,938

     

     

    $

    6,684,246

     

    $

    6,104,673

     

     

    Net interest margin (GAAP-derived) (F*H)/I

    3.54

    %

    3.19

    %

    3.51

    %

     

    3.38

    %

    3.67

    %

     

    Net interest margin - FTE (G*H)/I

    3.55

    %

    3.20

    %

    3.52

    %

     

    3.39

    %

    3.68

    %

     

     

     

     

     

     

     

     

    Calculation of Efficiency Ratio

     

     

     

     

     

     

    (F)

    Net interest income (GAAP)

    $

    62,107

     

    $

    54,868

     

    $

    55,296

     

     

    $

    225,820

     

    $

    223,866

     

    (G)

    Net interest income - FTE

    62,234

     

    54,996

     

    55,456

     

     

    226,363

     

    224,552

     

    (J)

    Plus: noninterest income (GAAP)

    25,985

     

    28,041

     

    25,577

     

     

    103,889

     

    101,130

     

    (K)

    Less: gains/losses on investment securities and partnership investments

    (714)

     

    (177)

     

    (132)

     

     

    (1,652)

     

    (653)

     

    (L)

    Less: depreciation - leased equipment

    (4,940)

     

    (4,694)

     

    (6,006)

     

     

    (20,203)

     

    (25,128)

     

    (M)

    Total net revenue (GAAP) (F+J)

    88,092

     

    82,909

     

    80,873

     

     

    329,709

     

    324,996

     

    (N)

    Total net revenue - adjusted (G+J–K–L)

    82,565

     

    78,166

     

    74,895

     

     

    308,397

     

    299,901

     

    (O)

    Noninterest expense (GAAP)

    48,964

     

    47,043

     

    49,346

     

     

    187,367

     

    189,009

     

    (L)

    Less: depreciation - leased equipment

    (4,940)

     

    (4,694)

     

    (6,006)

     

     

    (20,203)

     

    (25,128)

     

    (P)

    Noninterest expense - adjusted (O–L)

    44,024

     

    42,349

     

    43,340

     

     

    167,164

     

    163,881

     

     

    Efficiency ratio (GAAP-derived) (O/M)

    55.58

    %

    56.74

    %

    61.02

    %

     

    56.83

    %

    58.16

    %

     

    Efficiency ratio - adjusted (P/N)

    53.32

    %

    54.18

    %

    57.87

    %

     

    54.20

    %

    54.65

    %

     

     

     

     

     

     

     

     

     

     

    End of Period

     

     

     

     

     

    December 31,

    September 30,

    December 31,

     

     

     

     

     

    2020

    2020

    2019

     

     

     

    Calculation of Tangible Common Equity-to-Tangible Assets Ratio

     

     

     

     

     

    (Q)

    Total common shareholders’ equity (GAAP)

    $

    886,845

     

    $

    877,754

     

    $

    828,277

     

     

     

     

    (R)

    Less: goodwill and intangible assets

    (83,948)

     

    (83,953)

     

    (83,971)

     

     

     

     

    (S)

    Total tangible common shareholders’ equity (Q–R)

    $

    802,897

     

    $

    793,801

     

    $

    744,306

     

     

     

     

    (T)

    Total assets (GAAP)

    7,316,411

     

    7,290,949

     

    6,622,776

     

     

     

     

    (R)

    Less: goodwill and intangible assets

    (83,948)

     

    (83,953)

     

    (83,971)

     

     

     

     

    (U)

    Total tangible assets (T–R)

    $

    7,232,463

     

    $

    7,206,996

     

    $

    6,538,805

     

     

     

     

     

    Common equity-to-assets ratio (GAAP-derived) (Q/T)

    12.12

    %

    12.04

    %

    12.51

    %

     

     

     

     

    Tangible common equity-to-tangible assets ratio (S/U)

    11.10

    %

    11.01

    %

    11.38

    %

     

     

     

     

     

     

     

     

     

     

     

    Calculation of Tangible Book Value per Common Share

     

     

     

     

     

     

    (Q)

    Total common shareholders’ equity (GAAP)

    $

    886,845

     

    $

    877,754

     

    $

    828,277

     

     

     

     

    (V)

    Actual common shares outstanding

    25,389,117

     

    25,553,644

     

    25,509,474

     

     

     

     

     

    Book value per common share (GAAP-derived) (Q/V)*1000

    $

    34.93

     

    $

    34.35

     

    $

    32.47

     

     

     

     

     

    Tangible common book value per share (S/V)*1000

    $

    31.62

     

    $

    31.06

     

    $

    29.18

     

     

     

     

    The NASDAQ Stock Market National Market Symbol: “SRCE” (CUSIP #336901 10 3)
    Please contact us at shareholder@1stsource.com



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    1st Source Corporation Reports Earnings for Full Year and Fourth Quarter 2020, Cash Dividend Increased, History of Increased Dividends Continues 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported net income of $81.44 million for 2020, a decrease of 11.44% compared to $91.96 million earned in 2019. Fourth quarter net income was $26.46 million, an increase …