1st Source Corporation announces earnings
Posted: Friday, October 21, 2016
1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported net income of $14.26 million for the third quarter of 2016, compared to $13.93 million reported in the third quarter a year ago bringing the 2016 year-to-date net income to $42.56 million compared to $43.07 million in 2015. The year-to-date net income comparison was negatively impacted by a reduction in net interest recoveries of $1.45 million, a higher provision for loan and lease losses of $2.93 million, and by the write-down of an available-for-sale equity investment.
These negatives were partially offset by gains of $1.86 million on a Volcker Rule required liquidation of a partnership investment and gains of $0.99 million on the sale of investment securities available-for-sale.
Diluted net income per common share for the third quarter of 2016 was $0.55, versus $0.53 in the third quarter of 2015. Diluted net income per common share was $1.63 for the first nine months of 2016 and 2015.
At its October 2016 meeting, the Board of Directors approved a cash dividend of $0.18 per common share. The cash dividend is payable to shareholders of record on November 1, 2016 and will be paid on November 11, 2016. This brings dividends this year to $0.720 per common share compared to $0.671 per common share at the same time last year.
According to Christopher J. Murphy III, Chairman, “We again saw healthy growth in loans, leases and deposits this quarter as we continued to add new clients to the bank. Average loans and leases were up a solid 7.12% from a year ago along with a strong average deposit increase of 8.95% during that same period. We had a steady performance overall, with expenses held flat and net income up slightly for the quarter compared to third quarter 2015.”
“While we are pleased with this growth, recent consolidation of clients in some of the industries we serve is likely to lead to payoffs and reduced opportunities in these industries. Also, continued low interest rates are a challenge to holding our net interest margin stable."
“Earlier this month, we opened our 81st banking center in a fast growing area of Elkhart, Indiana, and next month we will open a new larger office in the heart of downtown Warsaw, Indiana, replacing our current downtown location. As always, we remain committed to helping our clients achieve security, build wealth and realize their dreams by giving straight talk and sound advice, keeping their best interests in mind for the long term.” Mr. Murphy concluded.