1st Source Corporation Reports Record Third Quarter Results, Cash Dividend Declared

October 21, 2021 4:05 PM EDT

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QUARTERLY HIGHLIGHTS

  • Net income was a record $32.48 million for the quarter, up 7.48% from the second quarter and up 61.95% from the third quarter of 2020. Diluted net income per common share was also a record at $1.29, up compared to the $1.19 in the previous quarter and up from the prior year’s third quarter of $0.78.
  • Cash dividend of $0.31 per common share was approved by our Board, up 10.71% from the $0.28 per common share declared a year ago.
  • Small Business Administration (SBA) forgiveness and customer pay downs of Paycheck Protection Program (PPP) loans amounted to approximately $150.16 million during the quarter which contributed to the recognition of $6.69 million in PPP-related loan fees in the quarter.
  • Due to improvement in overall credit quality, we recognized a recovery in our provision for credit losses of $2.56 million for the third quarter of 2021 compared to a $9.30 million increase in the provision for credit losses during the same period last year.
  • Charitable contribution of $3 million was made to the 1st Source Foundation during the quarter to support previously funded COVID-19 initiatives in our Community Bank markets.

SOUTH BEND, Ind.--(BUSINESS WIRE)-- 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $32.48 million for the third quarter of 2021, up 61.95% from the $20.06 million reported in the third quarter a year ago, bringing the 2021 year-to-date net income to $90.81 million compared to $54.97 million in 2020, an increase of 65.19%. Diluted net income per common share for the third quarter of 2021 was up 65.38% to $1.29 versus $0.78 in the third quarter of 2020. Diluted net income per common share for the first nine months of 2021 was $3.59 compared to $2.14 a year earlier, a 67.76% increase.

At its October 2021 meeting, the Board of Directors approved a cash dividend of $0.31 per common share, up 10.71% from the $0.28 per common share declared a year ago. The cash dividend is payable to shareholders of record on November 2, 2021 and will be paid on November 12, 2021.

Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, “We are happy to report record net income for the third consecutive quarter. Credit quality improvements continued during the third quarter which resulted in a reduction to our allowance for loan and lease losses. Virtually all COVID-19 related loan and lease modifications ended their deferment during the quarter. In addition, our clients continued to receive Paycheck Protection Program (PPP) loan forgiveness during the third quarter. Total PPP loans forgiven in 2021 were $441.48 million which has provided $13.26 million in fee income. The Bank contributed $3 million of the PPP income to the 1st Source Foundation to help with COVID-19 related initiatives in the communities we serve. Furthermore, liquidity remains elevated and we are focused on its deployment through growing our loan and lease portfolio by deepening existing client relationships as well as developing new ones.

“We continue to remain focused on keeping our clients, colleagues and families safe so we can deliver the highest level of service and encourage all colleagues and those in our communities to get vaccinated to best protect themselves and others from the virus. As new variants of COVID develop, we will continue to review and analyze data from the CDC and local health departments to make the best decisions possible for the health and safety of our team members, clients and communities. To that end, masking requirements remain in effect for our team members and clients due to current infection rates in the communities we serve. This measure ensures that our colleagues are less likely to inadvertently expose themselves or others to the latest variant of the virus. Our lobbies are open, allowing our bankers to meet with business and consumer clients and safely participate in community activities about which they are passionate. We’re confident we are doing our best to ensure the safety and well-being of all those we serve and employ while also conducting ‘business as usual’ for all our clients.

“During the third quarter, it was announced our Board of Directors had approved the promotion of Mr. Brett Bauer to Chief Financial Officer and Treasurer of 1st Source Corporation and 1st Source Bank with responsibility for Accounting, Finance, Asset Liability Management, Treasury Management and Investor Relations; and that of Mr. John Bedient to Chief Operations Officer of 1st Source Bank overseeing a new Operations Group combining both deposit and loan operations. Prior to this appointment, Mr. Bauer had served as Chief Investment Officer since late 2012. In this role he has been responsible for managing 1st Source’s funding and treasury functions, bank liquidity, municipal and large CD pricing and services, a $1 billion-plus investment portfolio, and setting and managing the Bank’s asset liability policy and approach. He has also played a key role in vetting tax equity investments in 1st Source’s solar financing business and recently took over responsibility for the company’s Financial Analysis unit. Mr. Bedient had most recently served as 1st Source’s Group Head of Administrative Services and Retail Operations and has been a leader in the Bank’s retail and deposit services areas in various capacities since 2008. Both colleagues were promoted due to their long-term service and success at 1st Source, as well as their service, dedication and desire to live the 1st Source values. These new responsibilities harness the unique capabilities of each for the benefit of the company, their colleagues, and most importantly, our clients and shareholders.

“Lastly, I’m pleased to share that we opened a dedicated loan production office in southeast Fort Wayne, a historically underserved and majority- minority neighborhood in our community banking market. Under the leadership of Larry Mayers, our Fort Wayne regional president and business banking group head, the loan production office will serve the community’s consumer and small business loan, mortgage and other credit application needs. Our Fort Wayne colleagues will continue offering financial wellness education and support for minority and underrepresented entrepreneurs, which in turn will strengthen the business outlook for this area and the people who call southeast Fort Wayne home,” Mr. Murphy concluded.

THIRD QUARTER 2021 FINANCIAL RESULTS

Loans

Third quarter average loans and leases of $5.43 billion increased $78.54 million, up 1.54% net of PPP loans from the year ago quarter and increased $62.33 million, up 1.22% net of PPP loans from the previous quarter. Year-to-date average loans and leases of $5.48 billion increased $20.68 million, up 0.41% net PPP loans from the first nine months of 2020. PPP forgiveness and customer payments totaled $150.16 million in the third quarter of 2021 and $441.08 million during the first nine months of 2021 offset by PPP originations of $261.46 million during the first nine months of 2021. Loan runoff is primarily from SBA forgiveness of PPP loans offset by growth in the aircraft, solar and auto and light truck portfolios when compared to the third quarter of 2020.

Deposits

Average deposits of $6.40 billion grew $512.41 million for the quarter ended September 30, 2021, up 8.70% from the year ago quarter and increased $123.19 million, up 1.96% from the previous quarter. Average deposits for the first nine months of 2021 were $6.22 billion, an increase of $563.56 million, up 9.96% from the same period a year ago. Deposit growth is primarily from PPP loan fundings and increased consumer deposit levels compared to 2020 and increased consumer and business deposit levels compared to the previous quarter.

Net Interest Income and Net Interest Margin

Third quarter 2021 tax-equivalent net interest income of $62.34 million increased $7.34 million, or 13.34% from the third quarter a year ago and increased $5.28 million, or 9.26% from the previous quarter of 2021. For the first nine months of 2021, tax-equivalent net interest income was $176.92 million, an increase of $12.79 million, or 7.79% compared to the same period a year ago.

Third quarter 2021 net interest margin was 3.33%, an increase of 14 basis points from the 3.19% for the same period in 2020 and an increase of 19 basis points from the previous quarter. Third quarter 2021 net interest margin on a fully tax-equivalent basis was 3.34%, an increase of 14 basis points from the 3.20% for the same period in 2020 and was higher by 19 basis points compared to the previous quarter. Fees for PPP loans had a positive impact on the net interest margin of 29 basis points for the quarter compared to a negative impact of six basis points in the same period a year ago. We recognized $6.69 million in PPP loan fees during the third quarter of 2021. During the prior quarter, PPP loans had a positive impact on the net interest margin of one basis point and we recognized $2.59 million in PPP loan fees. The margin continues to experience pressure from the low interest rate environment and excess liquidity.

Net interest margin for the first nine months of 2021 was 3.27%, a decrease of five basis points from the 3.32% for the same period in 2020. Net interest margin on a fully-taxable-equivalent basis for the first nine months of 2021 was 3.28%, a decrease of five basis points from the 3.33% for the first half of 2020. The margin continues to experience pressure from the low interest rate environment and excess liquidity. PPP loans had a positive impact on the net interest margin of 14 basis points for the first nine months of 2021 compared to a negative impact of six basis points during the first nine months of 2020. We do not expect significant impact from PPP fees in 2022 as PPP loans continue to be forgiven. As of September 30, 2021, approximately 21% of all PPP loans originated remained outstanding while approximately 79% had been forgiven by the SBA or paid down by customers.

Noninterest Income

Third quarter 2021 noninterest income of $25.50 million decreased $2.54 million, or 9.07% from the third quarter a year ago and increased $0.60 million, or 2.41% from the second quarter of 2021. For the first nine months of 2021, noninterest income was $76.26 million, a decrease of $1.64 million, or 2.11% from the same period a year ago.

Noninterest income was lower compared to the third quarter a year ago mainly from reduced mortgage banking income resulting from a lower sales volume and less equipment rental income as demand for leases declined. This was offset by higher trust and wealth advisory fees as market values improved on assets under management, increased debit card income as transaction levels grew, a rise in service charges on deposit accounts and higher gains on partnership investments.

The increase in noninterest income from the prior quarter was mainly due to repositioning the investment portfolio last quarter resulting in losses on investment security sales, increased mortgage banking income due to declining rates during most of the third quarter, and gains on partnership investments partially offset by seasonal trust tax return fees which reduced trust fees and aforementioned declines in lease demand which reduced equipment rental income.

Additionally, we recognized $0.81 million in impairment recoveries on our mortgage servicing rights during 2021.

Noninterest Expense

Third quarter 2021 noninterest expense of $48.06 million increased $1.02 million, or 2.17% from the third quarter a year ago and increased $2.87 million, or 6.34% from the prior quarter. For the first nine months of 2021, noninterest expense was $137.40 million, a decrease of $1.00 million, down 0.72% compared to the same period a year ago.

The increase in noninterest expense from the third quarter a year ago was mainly the result of $3.00 million in charitable contributions, increased salaries and wages due to incentive awards and normal merit increases, higher business development costs tied to fewer COVID-19 restrictions offset by reduced general collection and repossession expenses, lower valuation adjustments on repossessed assets and decreased leased equipment depreciation as the average equipment rental portfolio continues to decline.

The increase in noninterest expense from the prior quarter was primarily the result of $3.00 million in charitable contributions, higher salaries and wages due to incentive awards and normal merit increases and an increase in the provision for unfunded loan commitments offset by lower general collection and repossession expenses and gains on the sale of repossessed assets, lower FDIC and other insurance expenses related to a one-time $0.38 million recovery of an incurred but not reported insurance reserve and lower leased equipment depreciation as the average equipment rental portfolio continues to decline.

Credit

The allowance for loan and lease losses as of September 30, 2021 was 2.50% of total loans and leases compared to 2.49% at June 30, 2021 and 2.43% at September 30, 2020 (incurred loss method). The allowance calculation includes PPP loans which are guaranteed by the SBA. Excluding these loans from the calculation results in an allowance of 2.58% at September 30, 2021, compared to 2.63% at June 30, 2021 and 2.73% at December 31, 2020. Net charge-offs of $0.04 million were recorded for the third quarter of 2021 compared with net charge-offs of $3.77 million in the same quarter a year ago and $0.16 million of net charge-offs in the prior quarter. The majority of charge-offs in 2021 were related to the bus division of the auto and light truck portfolio which continued to be impacted by the lingering effects of the pandemic on events and tourism through the first half of 2021.

The provision for credit losses was a recovery of $2.56 million for the third quarter of 2021, a decrease of $11.86 million compared with the same period in 2020 and an increase of $0.47 million from the previous quarter of 2021. The ratio of nonperforming assets to loans and leases was 0.84% as of September 30, 2021, compared to 1.06% on June 30, 2021 and 1.33% on September 30, 2020. Excluding PPP loans, the ratio of non-performing assets to loans and leases was 0.87% at September 30, 2021, 1.13% at June 30, 2021 and 1.48% at September 30, 2020.

Capital

As of September 30, 2021, the common equity-to-assets ratio was 11.44%, compared to 11.68% at June 30, 2021 and 12.04% a year ago. The tangible common equity-to-tangible assets ratio was 10.50% at September 30, 2021 compared to 10.70% at June 30, 2021 and 11.01% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 13.65% at September 30, 2021 compared to 13.62% at June 30, 2021 and 12.92% a year ago. During the third quarter of 2021, 210,130 shares were repurchased for treasury reducing common shareholders’ equity by $9.67 million.

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, nine Wealth Advisory Services locations and 10 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,” “hope,” “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

1st SOURCE CORPORATION

3rd QUARTER 2021 FINANCIAL HIGHLIGHTS

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

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

2021

 

2021

 

2020

 

2021

 

2020

AVERAGE BALANCES

 

 

 

 

 

 

Assets

$

7,796,763

 

$

7,657,276

 

$

7,281,542

 

 

$

7,603,119

 

$

7,026,956

 

Earning assets

 

7,404,252

 

 

7,264,886

 

 

6,841,720

 

 

 

7,211,523

 

 

6,584,451

 

Investments

 

1,482,016

 

 

1,339,551

 

 

1,057,780

 

 

 

1,351,768

 

 

1,044,625

 

Loans and leases

 

5,427,080

 

 

5,515,387

 

 

5,669,615

 

 

 

5,480,229

 

 

5,445,213

 

Deposits

 

6,401,844

 

 

6,278,654

 

 

5,889,434

 

 

 

6,221,866

 

 

5,658,309

 

Interest bearing liabilities

 

4,811,516

 

 

4,785,800

 

 

4,553,503

 

 

 

4,725,850

 

 

4,516,627

 

Common shareholders’ equity

 

915,552

 

 

898,388

 

 

876,992

 

 

 

902,907

 

 

861,366

 

Total equity

 

960,235

 

 

942,821

 

 

913,926

 

 

 

947,248

 

 

891,129

 

INCOME STATEMENT DATA

 

 

 

 

 

 

Net interest income

$

62,224

 

$

56,935

 

$

54,868

 

 

$

176,571

 

$

163,713

 

Net interest income - FTE(1)

 

62,335

 

 

57,053

 

 

54,996

 

 

 

176,921

 

 

164,129

 

(Recovery of) provision for credit losses

 

(2,559

)

 

(3,025

)

 

9,303

 

 

 

(3,186

)

 

31,031

 

Noninterest income

 

25,497

 

 

24,898

 

 

28,041

 

 

 

76,264

 

 

77,904

 

Noninterest expense

 

48,064

 

 

45,198

 

 

47,043

 

 

 

137,402

 

 

138,403

 

Net income

 

32,481

 

 

30,235

 

 

20,054

 

 

 

90,822

 

 

54,998

 

Net income available to common shareholders

 

32,483

 

 

30,223

 

 

20,058

 

 

 

90,811

 

 

54,973

 

PER SHARE DATA

 

 

 

 

 

 

Basic net income per common share

$

1.29

 

$

1.19

 

$

0.78

 

 

$

3.59

 

$

2.14

 

Diluted net income per common share

 

1.29

 

 

1.19

 

 

0.78

 

 

 

3.59

 

 

2.14

 

Common cash dividends declared

 

0.31

 

 

0.30

 

 

0.28

 

 

 

0.90

 

 

0.85

 

Book value per common share(2)

 

36.75

 

 

36.05

 

 

34.35

 

 

 

36.75

 

 

34.35

 

Tangible book value per common share(1)

 

33.37

 

 

32.69

 

 

31.06

 

 

 

33.37

 

 

31.06

 

Market value - High

 

48.63

 

 

51.02

 

 

38.26

 

 

 

51.02

 

 

52.16

 

Market value - Low

 

41.19

 

 

45.22

 

 

28.72

 

 

 

38.73

 

 

26.07

 

Basic weighted average common shares outstanding

 

24,919,956

 

 

25,143,712

 

 

25,552,374

 

 

 

25,126,703

 

 

25,538,910

 

Diluted weighted average common shares outstanding

 

24,919,956

 

 

25,143,712

 

 

25,552,374

 

 

 

25,126,703

 

 

25,538,910

 

KEY RATIOS

 

 

 

 

 

 

Return on average assets

 

1.65

%

 

1.58

%

 

1.10

%

 

 

1.60

%

 

1.05

%

Return on average common shareholders’ equity

 

14.08

 

 

13.49

 

 

9.10

 

 

 

13.45

 

 

8.52

 

Average common shareholders’ equity to average assets

 

11.74

 

 

11.73

 

 

12.04

 

 

 

11.88

 

 

12.26

 

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

 

10.50

 

 

10.70

 

 

11.01

 

 

 

10.50

 

 

11.01

 

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

 

13.65

 

 

13.62

 

 

12.92

 

 

 

13.65

 

 

12.92

 

Risk-based capital - Tier 1(3)

 

15.33

 

 

15.32

 

 

14.48

 

 

 

15.33

 

 

14.48

 

Risk-based capital - Total(3)

 

16.59

 

 

16.58

 

 

15.74

 

 

 

16.59

 

 

15.74

 

Net interest margin

 

3.33

 

 

3.14

 

 

3.19

 

 

 

3.27

 

 

3.32

 

Net interest margin - FTE(1)

 

3.34

 

 

3.15

 

 

3.20

 

 

 

3.28

 

 

3.33

 

Efficiency ratio: expense to revenue

 

54.79

 

 

55.23

 

 

56.74

 

 

 

54.34

 

 

57.28

 

Efficiency ratio: expense to revenue - adjusted(1)

 

53.38

 

 

52.89

 

 

54.18

 

 

 

52.44

 

 

54.53

 

Net charge offs to average loans and leases

 

0.00

 

 

0.01

 

 

0.26

 

 

 

0.09

 

 

0.13

 

Loan and lease loss allowance to loans and leases

 

2.50

 

 

2.49

 

 

2.43

 

 

 

2.50

 

 

2.43

 

Nonperforming assets to loans and leases

 

0.84

 

 

1.06

 

 

1.33

 

 

 

0.84

 

 

1.33

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

2021

 

2021

 

2021

 

2020

 

2020

END OF PERIOD BALANCES

 

 

 

 

 

 

Assets

$

7,964,092

 

$

7,718,694

 

$

7,511,931

 

 

$

7,316,411

 

$

7,290,949

 

Loans and leases

 

5,358,797

 

 

5,483,045

 

 

5,523,085

 

 

 

5,489,301

 

 

5,627,036

 

Deposits

 

6,522,505

 

 

6,345,410

 

 

6,131,341

 

 

 

5,946,028

 

 

5,896,855

 

Allowance for loan and lease losses

 

133,755

 

 

136,361

 

 

139,550

 

 

 

140,654

 

 

136,817

 

Goodwill and intangible assets

 

83,931

 

 

83,937

 

 

83,942

 

 

 

83,948

 

 

83,953

 

Common shareholders’ equity

 

911,333

 

 

901,226

 

 

891,295

 

 

 

886,845

 

 

877,754

 

Total equity

 

956,397

 

 

945,457

 

 

935,759

 

 

 

930,670

 

 

915,015

 

ASSET QUALITY

 

 

 

 

 

 

Loans and leases past due 90 days or more

$

96

 

$

44

 

$

66

 

 

$

115

 

$

81

 

Nonaccrual loans and leases

 

43,166

 

 

55,864

 

 

58,513

 

 

 

60,388

 

 

70,595

 

Other real estate

 

 

 

 

 

369

 

 

 

359

 

 

303

 

Repossessions

 

690

 

 

1,213

 

 

2,214

 

 

 

1,976

 

 

4,639

 

Equipment owned under operating leases

 

1,598

 

 

1,728

 

 

1,647

 

 

 

1,695

 

 

136

 

Total nonperforming assets

$

45,550

 

$

58,849

 

$

62,809

 

 

$

64,533

 

$

75,754

 

(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)

 

September 30,

 

June 30,

 

December 31,

 

September 30,

 

2021

 

2021

 

2020

 

2020

ASSETS

 

 

 

 

 

 

 

Cash and due from banks

$

77,740

 

 

$

69,101

 

 

$

74,186

 

 

$

62,575

 

Federal funds sold and interest bearing deposits with other banks

 

559,542

 

 

 

400,346

 

 

 

168,861

 

 

 

91,641

 

Investment securities available-for-sale

 

1,583,240

 

 

 

1,413,022

 

 

 

1,197,467

 

 

 

1,083,427

 

Other investments

 

27,189

 

 

 

27,429

 

 

 

27,429

 

 

 

27,674

 

Mortgages held for sale

 

34,594

 

 

 

6,453

 

 

 

12,885

 

 

 

20,990

 

Loans and leases, net of unearned discount:

 

 

 

 

 

 

 

Commercial and agricultural

 

1,005,849

 

 

 

1,125,965

 

 

 

1,186,118

 

 

 

1,418,047

 

Solar

 

303,995

 

 

 

305,250

 

 

 

292,604

 

 

 

263,472

 

Auto and light truck

 

605,258

 

 

 

595,326

 

 

 

542,369

 

 

 

527,582

 

Medium and heavy duty truck

 

248,604

 

 

 

256,169

 

 

 

279,172

 

 

 

271,248

 

Aircraft

 

900,077

 

 

 

883,559

 

 

 

861,460

 

 

 

806,162

 

Construction equipment

 

729,412

 

 

 

729,055

 

 

 

714,888

 

 

 

723,596

 

Commercial real estate

 

939,131

 

 

 

966,171

 

 

 

969,864

 

 

 

961,550

 

Residential real estate and home equity

 

492,893

 

 

 

492,552

 

 

 

511,379

 

 

 

519,881

 

Consumer

 

133,578

 

 

 

128,998

 

 

 

131,447

 

 

 

135,498

 

Total loans and leases

 

5,358,797

 

 

 

5,483,045

 

 

 

5,489,301

 

 

 

5,627,036

 

Allowance for loan and lease losses*

 

(133,755

)

 

 

(136,361

)

 

 

(140,654

)

 

 

(136,817

)

Net loans and leases

 

5,225,042

 

 

 

5,346,684

 

 

 

5,348,647

 

 

 

5,490,219

 

Equipment owned under operating leases, net

 

51,478

 

 

 

56,011

 

 

 

65,040

 

 

 

79,703

 

Net premises and equipment

 

46,748

 

 

 

47,617

 

 

 

49,373

 

 

 

49,933

 

Goodwill and intangible assets

 

83,931

 

 

 

83,937

 

 

 

83,948

 

 

 

83,953

 

Accrued income and other assets

 

274,588

 

 

 

268,094

 

 

 

288,575

 

 

 

300,834

 

Total assets

$

7,964,092

 

 

$

7,718,694

 

 

$

7,316,411

 

 

$

7,290,949

 

LIABILITIES

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Noninterest-bearing demand

$

2,012,389

 

 

$

1,851,932

 

 

$

1,636,684

 

 

$

1,720,768

 

Interest-bearing deposits:

 

 

 

 

 

 

 

Interest-bearing demand

 

2,358,512

 

 

 

2,318,210

 

 

 

2,059,139

 

 

 

1,885,771

 

Savings

 

1,214,088

 

 

 

1,182,643

 

 

 

1,082,848

 

 

 

992,320

 

Time

 

937,516

 

 

 

992,625

 

 

 

1,167,357

 

 

 

1,297,996

 

Total interest-bearing deposits

 

4,510,116

 

 

 

4,493,478

 

 

 

4,309,344

 

 

 

4,176,087

 

Total deposits

 

6,522,505

 

 

 

6,345,410

 

 

 

5,946,028

 

 

 

5,896,855

 

Short-term borrowings:

 

 

 

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

 

210,275

 

 

 

167,097

 

 

 

143,564

 

 

 

158,834

 

Other short-term borrowings

 

5,390

 

 

 

5,247

 

 

 

7,077

 

 

 

6,740

 

Total short-term borrowings

 

215,665

 

 

 

172,344

 

 

 

150,641

 

 

 

165,574

 

Long-term debt and mandatorily redeemable securities

 

81,301

 

 

 

81,330

 

 

 

81,864

 

 

 

81,659

 

Subordinated notes

 

58,764

 

 

 

58,764

 

 

 

58,764

 

 

 

58,764

 

Accrued expenses and other liabilities

 

129,460

 

 

 

115,389

 

 

 

148,444

 

 

 

173,082

 

Total liabilities

 

7,007,695

 

 

 

6,773,237

 

 

 

6,385,741

 

 

 

6,375,934

 

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 September 30, 2021, June 30, 2021, December 31, 2020, and September 30, 2020, respectively

 

436,538

 

 

 

436,538

 

 

 

436,538

 

 

 

436,538

 

Retained earnings

 

583,631

 

 

 

558,795

 

 

 

514,176

 

 

 

497,419

 

Cost of common stock in treasury (3,408,141, 3,204,947, 2,816,557, and 2,652,030 shares at September 30, 2021, June 30, 2021, December 31, 2020, and September 30, 2020, respectively)

 

(111,253

)

 

 

(101,711

)

 

 

(82,240

)

 

 

(75,861

)

Accumulated other comprehensive income

 

2,417

 

 

 

7,604

 

 

 

18,371

 

 

 

19,658

 

Total shareholders’ equity

 

911,333

 

 

 

901,226

 

 

 

886,845

 

 

 

877,754

 

Noncontrolling interests

 

45,064

 

 

 

44,231

 

 

 

43,825

 

 

 

37,261

 

Total equity

 

956,397

 

 

 

945,457

 

 

 

930,670

 

 

 

915,015

 

Total liabilities and equity

$

7,964,092

 

 

$

7,718,694

 

 

$

7,316,411

 

 

$

7,290,949

 

*ASU 2016-13 adopted during the fourth quarter of 2020 therefore September 30, 2020 allowance amount reflects the incurred loss method.

1st SOURCE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

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

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

2021

 

2021

 

2020

 

2021

 

2020

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

$

61,696

 

 

$

57,144

 

 

$

58,318

 

$

176,704

 

 

$

178,659

 

Investment securities, taxable

 

4,533

 

 

 

4,155

 

 

 

4,103

 

 

12,676

 

 

 

14,140

 

Investment securities, tax-exempt

 

140

 

 

 

154

 

 

 

207

 

 

468

 

 

 

703

 

Other

 

360

 

 

 

317

 

 

 

289

 

 

943

 

 

 

951

 

Total interest income

 

66,729

 

 

 

61,770

 

 

 

62,917

 

 

190,791

 

 

 

194,453

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

2,924

 

 

 

3,202

 

 

 

6,532

 

 

9,652

 

 

 

25,648

 

Short-term borrowings

 

25

 

 

 

29

 

 

 

83

 

 

90

 

 

 

427

 

Subordinated notes

 

816

 

 

 

814

 

 

 

824

 

 

2,448

 

 

 

2,543

 

Long-term debt and mandatorily redeemable securities

 

740

 

 

 

790

 

 

 

610

 

 

2,030

 

 

 

2,122

 

Total interest expense

 

4,505

 

 

 

4,835

 

 

 

8,049

 

 

14,220

 

 

 

30,740

 

Net interest income

 

62,224

 

 

 

56,935

 

 

 

54,868

 

 

176,571

 

 

 

163,713

 

(Recovery of) provision for credit losses*

 

(2,559

)

 

 

(3,025

)

 

 

9,303

 

 

(3,186

)

 

 

31,031

 

Net interest income after provision for credit losses

 

64,783

 

 

 

59,960

 

 

 

45,565

 

 

179,757

 

 

 

132,682

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Trust and wealth advisory

 

5,886

 

 

 

6,466

 

 

 

5,153

 

 

17,833

 

 

 

15,590

 

Service charges on deposit accounts

 

2,767

 

 

 

2,508

 

 

 

2,336

 

 

7,722

 

 

 

6,851

 

Debit card

 

4,570

 

 

 

4,754

 

 

 

4,019

 

 

13,506

 

 

 

10,993

 

Mortgage banking

 

3,149

 

 

 

2,859

 

 

 

6,474

 

 

9,909

 

 

 

12,125

 

Insurance commissions

 

1,862

 

 

 

1,684

 

 

 

1,825

 

 

5,698

 

 

 

5,401

 

Equipment rental

 

3,946

 

 

 

4,255

 

 

 

5,593

 

 

12,830

 

 

 

18,213

 

(Losses) gains on investment securities available-for-sale

 

 

 

 

(680

)

 

 

 

 

(680

)

 

 

279

 

Other

 

3,317

 

 

 

3,052

 

 

 

2,641

 

 

9,446

 

 

 

8,452

 

Total noninterest income

 

25,497

 

 

 

24,898

 

 

 

28,041

 

 

76,264

 

 

 

77,904

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

26,974

 

 

 

25,510

 

 

 

25,609

 

 

77,680

 

 

 

74,009

 

Net occupancy

 

2,654

 

 

 

2,527

 

 

 

2,512

 

 

7,900

 

 

 

7,737

 

Furniture and equipment

 

6,444

 

 

 

6,337

 

 

 

6,247

 

 

19,239

 

 

 

18,912

 

Depreciation – leased equipment

 

3,239

 

 

 

3,550

 

 

 

4,694

 

 

10,562

 

 

 

15,263

 

Professional fees

 

1,815

 

 

 

2,146

 

 

 

2,041

 

 

5,574

 

 

 

4,741

 

Supplies and communication

 

1,427

 

 

 

1,430

 

 

 

1,305

 

 

4,332

 

 

 

4,329

 

FDIC and other insurance

 

396

 

 

 

772

 

 

 

868

 

 

1,833

 

 

 

1,755

 

Business development and marketing

 

4,465

 

 

 

1,351

 

 

 

923

 

 

6,813

 

 

 

3,403

 

Loan and lease collection and repossession

 

(585

)

 

 

486

 

 

 

1,054

 

 

30

 

 

 

2,655

 

Other

 

1,235

 

 

 

1,089

 

 

 

1,790

 

 

3,439

 

 

 

5,599

 

Total noninterest expense

 

48,064

 

 

 

45,198

 

 

 

47,043

 

 

137,402

 

 

 

138,403

 

Income before income taxes

 

42,216

 

 

 

39,660

 

 

 

26,563

 

 

118,619

 

 

 

72,183

 

Income tax expense

 

9,735

 

 

 

9,425

 

 

 

6,509

 

 

27,797

 

 

 

17,185

 

Net income

 

32,481

 

 

 

30,235

 

 

 

20,054

 

 

90,822

 

 

 

54,998

 

Net loss (income) attributable to noncontrolling interests

 

2

 

 

 

(12

)

 

 

4

 

 

(11

)

 

 

(25

)

Net income available to common shareholders

$

32,483

 

 

$

30,223

 

 

$

20,058

 

$

90,811

 

 

$

54,973

 

Per common share:

 

 

 

 

 

 

 

 

 

Basic net income per common share

$

1.29

 

 

$

1.19

 

 

$

0.78

 

$

3.59

 

 

$

2.14

 

Diluted net income per common share

$

1.29

 

 

$

1.19

 

 

$

0.78

 

$

3.59

 

 

$

2.14

 

Cash dividends

$

0.31

 

 

$

0.30

 

 

$

0.28

 

$

0.90

 

 

$

0.85

 

Basic weighted average common shares outstanding

 

24,919,956

 

 

 

25,143,712

 

 

 

25,552,374

 

 

25,126,703

 

 

 

25,538,910

 

Diluted weighted average common shares outstanding

 

24,919,956

 

 

 

25,143,712

 

 

 

25,552,374

 

 

25,126,703

 

 

 

25,538,910

 

*ASU 2016-13 adopted during the fourth quarter of 2020 therefore September 30, 2020 provision amount reflects the incurred loss method.

1st SOURCE CORPORATION

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY

INTEREST RATES AND INTEREST DIFFERENTIAL

(Unaudited - Dollars in thousands)

 

 

 

Three Months Ended

 

 

 

September 30, 2021

 

June 30, 2021

 

September 30, 2020

 

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

$

1,451,523

 

 

$

4,533

 

 

1.24

%

 

$

1,305,988

 

 

$

4,156

 

 

1.28

%

 

$

1,012,703

 

 

$

4,103

 

 

1.61

%

Tax exempt(1)

 

30,493

 

 

 

172

 

 

2.24

%

 

 

33,563

 

 

 

192

 

 

2.29

%

 

 

45,077

 

 

 

257

 

 

2.26

%

Mortgages held for sale

 

17,750

 

 

 

120

 

 

2.68

%

 

 

7,208

 

 

 

54

 

 

3.00

%

 

 

26,327

 

 

 

186

 

 

2.81

%

Loans and leases, net of unearned discount(1)

 

5,427,080

 

 

 

61,655

 

 

4.51

%

 

 

5,515,387

 

 

 

57,169

 

 

4.16

%

 

 

5,669,615

 

 

 

58,210

 

 

4.08

%

Other investments

 

477,406

 

 

 

360

 

 

0.30

%

 

 

402,740

 

 

 

317

 

 

0.32

%

 

 

87,998

 

 

 

289

 

 

1.31

%

Total earning assets(1)

 

7,404,252

 

 

 

66,840

 

 

3.58

%

 

 

7,264,886

 

 

 

61,888

 

 

3.42

%

 

 

6,841,720

 

 

 

63,045

 

 

3.67

%

Cash and due from banks

 

76,915

 

 

 

 

 

 

 

76,198

 

 

 

 

 

 

 

72,474

 

 

 

 

 

Allowance for loan and lease losses

 

(137,206

)

 

 

 

 

 

 

(142,056

)

 

 

 

 

 

 

(134,824

)

 

 

 

 

Other assets

 

452,802

 

 

 

 

 

 

 

458,248

 

 

 

 

 

 

 

502,172

 

 

 

 

 

Total assets

$

7,796,763

 

 

 

 

 

 

$

7,657,276

 

 

 

 

 

 

$

7,281,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

$

4,488,169

 

 

$

2,924

 

 

0.26

%

 

$

4,458,915

 

 

$

3,202

 

 

0.29

%

 

$

4,225,299

 

 

$

6,532

 

 

0.62

%

Short-term borrowings

 

183,212

 

 

 

25

 

 

0.05

%

 

 

186,605

 

 

 

29

 

 

0.06

%

 

 

187,912

 

 

 

83

 

 

0.18

%

Subordinated notes

 

58,764

 

 

 

816

 

 

5.51

%

 

 

58,764

 

 

 

814

 

 

5.56

%

 

 

58,764

 

 

 

824

 

 

5.58

%

Long-term debt and mandatorily redeemable securities

 

81,371

 

 

 

740

 

 

3.61

%

 

 

81,516

 

 

 

790

 

 

3.89

%

 

 

81,528

 

 

 

610

 

 

2.98

%

Total interest-bearing liabilities

 

4,811,516

 

 

 

4,505

 

 

0.37

%

 

 

4,785,800

 

 

 

4,835

 

 

0.41

%

 

 

4,553,503

 

 

 

8,049

 

 

0.70

%

Noninterest-bearing deposits

 

1,913,675

 

 

 

 

 

 

 

1,819,739

 

 

 

 

 

 

 

1,664,135

 

 

 

 

 

Other liabilities

 

111,337

 

 

 

 

 

 

 

108,916

 

 

 

 

 

 

 

149,978

 

 

 

 

 

Shareholders’ equity

 

915,552

 

 

 

 

 

 

 

898,388

 

 

 

 

 

 

 

876,992

 

 

 

 

 

Noncontrolling interests

 

44,683

 

 

 

 

 

 

 

44,433

 

 

 

 

 

 

 

36,934

 

 

 

 

 

Total liabilities and equity

$

7,796,763

 

 

 

 

 

 

$

7,657,276

 

 

 

 

 

 

$

7,281,542

 

 

 

 

 

Less: Fully tax-equivalent adjustments

 

 

 

(111

)

 

 

 

 

 

 

(118

)

 

 

 

 

 

 

(128

)

 

 

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

 

 

$

62,224

 

 

3.33

%

 

 

 

$

56,935

 

 

3.14

%

 

 

 

$

54,868

 

 

3.19

%

Fully tax-equivalent adjustments

 

 

 

111

 

 

 

 

 

 

 

118

 

 

 

 

 

 

 

128

 

 

 

Net interest income/margin - FTE(1)

 

 

$

62,335

 

 

3.34

%

 

 

 

$

57,053

 

 

3.15

%

 

 

 

$

54,996

 

 

3.20

%

(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)

 

Nine Months Ended

 

September 30, 2021

 

September 30, 2020

 

Average

Balance

 

Interest
Income/Expense

 

Yield/

Rate

 

Average

Balance

 

Interest
Income/Expense

 

Yield/

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

Taxable

$

1,317,976

 

 

$

12,676

 

 

1.29

%

 

$

994,035

 

 

$

14,140

 

 

1.90

%

Tax exempt(1)

 

33,792

 

 

 

578

 

 

2.29

%

 

 

50,590

 

 

 

868

 

 

2.29

%

Mortgages held for sale

 

13,094

 

 

 

260

 

 

2.65

%

 

 

21,563

 

 

 

480

 

 

2.97

%

Loans and leases, net of unearned discount(1)

 

5,480,229

 

 

 

176,684

 

 

4.31

%

 

 

5,445,213

 

 

 

178,430

 

 

4.38

%

Other investments

 

366,432

 

 

 

943

 

 

0.34

%

 

 

73,050

 

 

 

951

 

 

1.74

%

Total earning assets(1)

 

7,211,523

 

 

 

191,141

 

 

3.54

%

 

 

6,584,451

 

 

 

194,869

 

 

3.95

%

Cash and due from banks

 

76,103

 

 

 

 

 

 

 

70,475

 

 

 

 

 

Allowance for loan and lease losses

 

(140,800

)

 

 

 

 

 

 

(123,790

)

 

 

 

 

Other assets

 

456,293

 

 

 

 

 

 

 

495,820

 

 

 

 

 

Total assets

$

7,603,119

 

 

 

 

 

 

$

7,026,956

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

4,403,595

 

 

 

9,652

 

 

0.29

%

 

 

4,183,502

 

 

 

25,648

 

 

0.82

%

Short-term borrowings

 

182,205

 

 

 

90

 

 

0.07

%

 

 

193,934

 

 

 

427

 

 

0.29

%

Subordinated notes

 

58,764

 

 

 

2,448

 

 

5.57

%

 

 

58,764

 

 

 

2,543

 

 

5.78

%

Long-term debt and mandatorily redeemable securities

 

81,286

 

 

 

2,030

 

 

3.34

%

 

 

80,427

 

 

 

2,122

 

 

3.52

%

Total interest-bearing liabilities

 

4,725,850

 

 

 

14,220

 

 

0.40

%

 

 

4,516,627

 

 

 

30,740

 

 

0.91

%

Noninterest-bearing deposits

 

1,818,271

 

 

 

 

 

 

 

1,474,807

 

 

 

 

 

Other liabilities

 

111,750

 

 

 

 

 

 

 

144,393

 

 

 

 

 

Shareholders’ equity

 

902,907

 

 

 

 

 

 

 

861,366

 

 

 

 

 

Noncontrolling interests

 

44,341

 

 

 

 

 

 

 

29,763

 

 

 

 

 

Total liabilities and equity

$

7,603,119

 

 

 

 

 

 

$

7,026,956

 

 

 

 

 

Less: Fully tax-equivalent adjustments

 

 

 

(350

)

 

 

 

 

 

 

(416

)

 

 

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

 

 

$

176,571

 

 

3.27

%

 

 

 

$

163,713

 

 

3.32

%

Fully tax-equivalent adjustments

 

 

 

350

 

 

 

 

 

 

 

416

 

 

 

Net interest income/margin - FTE(1)

 

 

$

176,921

 

 

3.28

%

 

 

 

$

164,129

 

 

3.33

%

(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

 

Nine Months Ended

 

 

September 30,

June 30,

September 30,

 

September 30,

September 30,

 

 

2021

2021

2020

 

2021

2020

Calculation of Net Interest Margin

 

 

 

 

 

 

(A)

Interest income (GAAP)

$

66,729

 

 

$

61,770

 

 

$

62,917

 

 

$

190,791

 

 

$

194,453

 

 

Fully tax-equivalent adjustments:

 

 

 

 

 

 

 

 

 

(B)

– Loans and leases

 

79

 

 

 

80

 

 

 

78

 

 

 

240

 

 

 

251

 

(C)

– Tax exempt investment securities

 

32

 

 

 

38

 

 

 

50

 

 

 

110

 

 

 

165

 

(D)

Interest income – FTE (A+B+C)

 

66,840

 

 

 

61,888

 

 

 

63,045

 

 

 

191,141

 

 

 

194,869

 

(E)

Interest expense (GAAP)

 

4,505

 

 

 

4,835

 

 

 

8,049

 

 

 

14,220

 

 

 

30,740

 

(F)

Net interest income (GAAP) (A-E)

 

62,224

 

 

 

56,935

 

 

 

54,868

 

 

 

176,571

 

 

 

163,713

 

(G)

Net interest income - FTE (D-E)

 

62,335

 

 

 

57,053

 

 

 

54,996

 

 

 

176,921

 

 

 

164,129

 

(H)

Annualization factor

 

3.967

 

 

 

4.011

 

 

 

3.978

 

 

 

1.337

 

 

 

1.336

 

(I)

Total earning assets

$

7,404,252

 

 

$

7,264,886

 

 

$

6,841,720

 

 

$

7,211,523

 

 

$

6,584,451

 

 

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

 

3.33

%

 

 

3.14

%

 

 

3.19

%

 

 

3.27

%

 

 

3.32

%

 

Net interest margin – FTE (G*H)/I

 

3.34

%

 

 

3.15

%

 

 

3.20

%

 

 

3.28

%

 

 

3.33

%

 

 

 

 

 

 

 

 

 

 

 

Calculation of Efficiency Ratio

 

 

 

 

 

 

 

 

 

(F)

Net interest income (GAAP)

$

62,224

 

 

$

56,935

 

 

$

54,868

 

 

$

176,571

 

 

$

163,713

 

(G)

Net interest income – FTE

 

62,335

 

 

 

57,053

 

 

 

54,996

 

 

 

176,921

 

 

 

164,129

 

(J)

Plus: noninterest income (GAAP)

 

25,497

 

 

 

24,898

 

 

 

28,041

 

 

 

76,264

 

 

 

77,904

 

(K)

Less: gains/losses on investment securities and partnership investments

 

(623

)

 

 

348

 

 

 

(177

)

 

 

(735

)

 

 

(938

)

(L)

Less: depreciation – leased equipment

 

(3,239

)

 

 

(3,550

)

 

 

(4,694

)

 

 

(10,562

)

 

 

(15,263

)

(M)

Total net revenue (GAAP) (F+J)

 

87,721

 

 

 

81,833

 

 

 

82,909

 

 

 

252,835

 

 

 

241,617

 

(N)

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

 

83,970

 

 

 

78,749

 

 

 

78,166

 

 

 

241,888

 

 

 

225,832

 

(O)

Noninterest expense (GAAP)

 

48,064

 

 

 

45,198

 

 

 

47,043

 

 

 

137,402

 

 

 

138,403

 

(L)

Less:depreciation – leased equipment

 

(3,239

)

 

 

(3,550

)

 

 

(4,694

)

 

 

(10,562

)

 

 

(15,263

)

(P)

Noninterest expense – adjusted (O–L)

 

44,825

 

 

 

41,648

 

 

 

42,349

 

 

 

126,840

 

 

 

123,140

 

 

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

 

54.79

%

 

 

55.23

%

 

 

56.74

%

 

 

54.34

%

 

 

57.28

%

 

Efficiency ratio – adjusted (P/N)

 

53.38

%

 

 

52.89

%

 

 

54.18

%

 

 

52.44

%

 

 

54.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

End of Period

 

 

 

 

 

 

September 30,

June 30,

September 30,

 

 

 

 

 

 

2021

2021

2020

 

 

 

 

Calculation of Tangible Common Equity-to-Tangible Assets Ratio

 

 

 

 

 

 

 

 

 

 

 

 

(Q)

Total common shareholders’ equity (GAAP)

$

911,333

 

 

$

901,226

 

 

$

877,754

 

 

 

 

 

(R)

Less: goodwill and intangible assets

 

(83,931

)

 

 

(83,937

)

 

 

(83,953

)

 

 

 

 

(S)

Total tangible common shareholders’ equity (Q–R)

$

827,402

 

 

$

817,289

 

 

$

793,801

 

 

 

 

 

(T)

Total assets (GAAP)

 

7,964,092

 

 

 

7,718,694

 

 

 

7,290,949

 

 

 

 

 

(R)

Less: goodwill and intangible assets

 

(83,931

)

 

 

(83,937

)

 

 

(83,953

)

 

 

 

 

(U)

Total tangible assets (T–R)

$

7,880,161

 

 

$

7,634,757

 

 

$

7,206,996

 

 

 

 

 

 

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

 

11.44

%

 

 

11.68

%

 

 

12.04

%

 

 

 

 

 

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

 

10.50

%

 

 

10.70

%

 

 

11.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Tangible Book Value per Common Share

 

 

 

 

 

 

 

 

 

(Q)

Total common shareholders’ equity (GAAP)

$

911,333

 

 

$

901,226

 

 

$

877,754

 

 

 

 

 

(V)

Actual common shares outstanding

 

24,797,533

 

 

 

25,000,727

 

 

 

25,553,644

 

 

 

 

 

 

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

$

36.75

 

 

$

36.05

 

 

$

34.35

 

 

 

 

 

 

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

$

33.37

 

 

$

32.69

 

 

$

31.06

 

 

 

 

 

The NASDAQ Stock Market National Market Symbol: “SRCE” (CUSIP #336901 10 3)

Please contact us at shareholder@1stsource.com

Brett Bauer
574-235-2000

Source: 1st Source Corporation



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