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

QUARTERLY HIGHLIGHTS

  • Net income was a record $32.74 million for the quarter, up $0.25 million or 0.78% from the third quarter of 2021. Diluted net income per common share was $1.32, up $0.03 from the prior year’s third quarter of $1.29.
  • Cash dividend of $0.32 per common share was approved, up 3.23% from the cash dividend declared a year ago.
  • Return on average assets of 1.62% and return on average common shareholders’ equity of 14.87% compared to 1.65% and 14.08%, respectively in the third quarter of 2021.
  • Average loans and leases net PPP loans grew $177.10 million in the third quarter, up 3.25% (13% annualized growth) from the previous quarter and $451.88 million, up 8.74% from the third quarter of 2021.
  • Tax-equivalent net interest income was $69.12 million, up $6.78 million, or 10.88% from the third quarter a year ago. Tax-equivalent net interest margin was 3.60%, up 26 basis points from the third quarter a year ago.
  • Mortgage banking income was $0.86 million, down $2.29 million, or 72.56% from the third quarter a year ago.

1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $32.74 million for the third quarter of 2022, up 0.78% from the $32.48 million reported in the third quarter a year ago, bringing the 2022 year-to-date net income to $89.44 million compared to $90.81 million in 2021. Diluted net income per common share for the third quarter of 2022 was $1.32 versus $1.29 in the third quarter of 2021. Diluted net income per common share for the first nine months of 2022 and 2021 was $3.59.

At its October 2022 meeting, the Board of Directors approved a cash dividend of $0.32 per common share, up 3.23% from the $0.31 per common share declared a year ago. The cash dividend is payable to shareholders of record on November 1, 2022 and will be paid on November 10, 2022.

Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, “We are pleased to announce that we had record net income for the third quarter. Average loans grew $451.88 million or 8.74% net of Paycheck Protection Program (PPP) loans from the third quarter last year. Average deposits increased $271.40 million, up 4.24% from the prior year third quarter. Our tax-equivalent net interest margin for the quarter was 3.60% compared to 3.34% in the prior year third quarter. The expansion in our net interest margin over the last two quarters has been largely the result of numerous Federal Reserve rate increases during the first nine months of this year. As the Federal Reserve continues its attempt to cool down runaway inflation without triggering a recession, continued rate changes are a distinct possibility and deposit rate competition will likely have an impact on the margin expansion we have seen over the last two quarters. We are very proud to have achieved record net income and impressive loan growth during the quarter but must be focused on organic, core deposit growth as we move into the next quarter and beyond.

“It was a welcome surprise and honor when two of our board members were named to the inaugural Indiana 250 list by IBJ Media this quarter. Isaac Torres, our newest board member and founder, President and Chief Executive Officer of InterCambio Express, Inc., as well as Tracy Graham, Managing Principal of Graham-Allen Partners, LLC and Chief Executive Officer of Aunalytics, Inc. were among those recognized. The Indiana 250 is a list of the state’s most influential community and business leaders, representing the sectors of civic leadership, energy and agriculture, financial and business services, healthcare and life sciences, hospitality, entertainment and arts, law, manufacturing and logistics, non-for-profit, education, real estate, and tech and media. The Indiana 250 was compiled by IBJ Media’s staff and executives after months of reviewing nominations, researching Indiana organizations and interviewing community leaders across the state. We are thrilled to have Isaac and Tracy as members of our board, and we greatly value their thoughtfulness and contributions to the work we do. It’s a great honor to have those who are helping shape our future be applauded and celebrated among the leadership community in our state, and we congratulate them on this much-deserved recognition of their vision and accomplishments. Additionally, due to the great work of everyone on the 1st Source team with the shared goal of serving customers’ needs, I was also recognized among the Indiana 250. I have been honored by the recognition and thank my colleagues for helping make that happen,” Mr. Murphy concluded.

THIRD QUARTER 2022 FINANCIAL RESULTS

Loans

Third quarter average loans and leases of $5.63 billion increased $451.88 million, up 8.74% net of PPP loans from the year ago quarter and increased $177.10 million, up 3.25% net of PPP loans from the previous quarter. Year-to-date average loans and leases of $5.47 billion increased $324.88 million, up 6.34% net of PPP loans from the first nine months of 2021. PPP loans of $6.35 million remained outstanding which is net of $0.13 million in unearned fees as of September 30, 2022. Strong growth primarily within our specialty finance group portfolios drove total average loans and leases higher compared to the third quarter of 2021 and the previous quarter.

Deposits

Average deposits of $6.67 billion grew $271.40 million for the quarter ended September 30, 2022, up 4.24% from the year ago quarter and decreased $122.55 million, down 1.80% from the previous quarter. Average deposits for the first nine months of 2022 were $6.70 billion, an increase of $473.64 million, up 7.61% from the same period a year ago. Deposit growth over the last year came from business and consumer clients while brokered deposits have declined.

Net Interest Income and Net Interest Margin

Third quarter 2022 tax-equivalent net interest income of $69.12 million increased $6.78 million, up 10.88% from the third quarter a year ago and grew $5.53 million, up 8.70% from the previous quarter. For the first nine months of 2022, tax-equivalent net interest income was $192.43 million, an increase of $15.51 million, up 8.76% from the first nine months of 2021. We recognized $0.08 million in PPP loan fees during the quarter and $2.58 million during the first nine months of 2022 compared to $6.69 million in the previous year quarter and $13.26 million during the first nine months of 2021.

Third quarter 2022 net interest margin was 3.59%, an increase of 26 basis points from the 3.33% for the same period in 2021 and an increase of 28 basis points from the previous quarter. On a fully tax-equivalent basis, third quarter 2022 net interest margin was 3.60%, an increase of 26 basis points from the 3.34% for the same period in 2021 and was higher by 28 basis points compared to the previous quarter. Non-recurring items during the quarter contributed seven basis points of the 28-basis point increase. Those items include lower interest expense on mandatorily redeemable securities due to book value adjustments of five basis points and net interest recoveries of two basis points.

Net interest margin for the first nine months of 2022 was 3.36%, an increase of nine basis points from the 3.27% for the first nine months of 2021. Net interest margin on a fully-tax-equivalent basis for the first nine months of 2022 was 3.37%, an increase of nine basis points from the 3.28% from the prior year. PPP loans had a positive impact on the net margin of four basis points for the first nine months of 2022 and 14 basis points for the first nine months of 2021.

Multiple Federal Reserve rate increases during 2022 contributed to net interest margin expansion as loans repriced faster than deposits during the second and third quarters of 2022.

Noninterest Income

Third quarter 2022 noninterest income of $22.01 million decreased $3.49 million, or 13.69% from the third quarter a year ago and decreased $0.82 million, or 3.60% from the second quarter of 2022. For the first nine months of 2022, noninterest income was $67.98 million, a decrease of $8.28 million, or 10.86% from the same period a year ago.

The reduction for both periods is mainly from reduced mortgage banking origination volumes resulting in lower income from loans sold in the secondary market. Demand for mortgages has continued to decline as higher rates have negatively impacted refinancing volumes. Equipment rental income continued to shrink as demand for leases declined. This was offset by a rise in service charges on deposit accounts and the absence of losses on the sale of investment securities. The decline in noninterest income from the prior quarter was mainly due to lower trust and wealth advisory income as a result of seasonal fee income recognized in the second quarter.

Noninterest Expense

Third quarter 2022 noninterest expense of $45.33 million decreased $2.73 million, or 5.69% from the third quarter a year ago and decreased $0.32 million, or 0.71% from the prior quarter. For the first nine months of 2022, noninterest expense was $136.32 million, a decrease of $1.08 million, or 0.79% compared to the same period in 2021.

The decrease in noninterest expense for the third quarter and the first nine months of 2022 compared to a year ago was mainly the result of lower charitable contributions, decreased leased equipment depreciation as the average equipment rental portfolio continues to decline, fewer legal fees and a reduction in group insurance costs offset by higher data processing charges for technology projects, an increase in the interest rate swap valuation provision and a rise in professional consulting fees.

The decrease in noninterest expense from the prior quarter was primarily the result of a reduction in the loan loss provision for unfunded loan commitments, decreased legal fees and lower leased equipment depreciation offset by higher data processing charges for technology projects, fewer gains on the sale of repossessed assets and an increase in the interest rate swap valuation provision.

Credit

The allowance for loan and lease losses as of September 30, 2022 was 2.36% of total loans and leases compared to 2.39% at June 30, 2022 and 2.50% at September 30, 2021. The allowance calculation includes PPP loans which are guaranteed by the SBA. Excluding these loans from the calculation results in an allowance which was unchanged at September 30, 2022, compared to 2.40% at June 30, 2022 and 2.58% at September 30, 2021. Net charge-offs of $0.30 million were recorded for the third quarter of 2022 compared with net charge-offs of $0.04 million in the same quarter a year ago and $0.40 million of net recoveries in the prior quarter. The majority of charge-offs during the quarter were related to the commercial and agricultural and consumer portfolios.

The provision for credit losses was $3.17 million for the third quarter of 2022, an increase of $5.73 million compared with the same period in 2021 and an increase of $0.66 million from the previous quarter. The increase in provision for credit losses during the quarter was primarily due to loan growth. The ratio of nonperforming assets to loans and leases was 0.48% as of September 30, 2022, compared to 0.60% on June 30, 2022 and 0.84% on September 30, 2021. Excluding PPP loans, the ratio of non-performing assets to loans and leases was unchanged at September 30, 2022 and June 30, 2022 and 0.87% at September 30, 2021. While nonperforming assets showed improvement during the quarter, the allowance for loan and lease losses increased at September 30, 2022 due to loan growth.

Capital

As of September 30, 2022, the common equity-to-assets ratio was 10.20%, compared to 10.66% at June 30, 2022 and 11.44% a year ago. The tangible common equity-to-tangible assets ratio was 9.26% at September 30, 2022 compared to 9.72% at June 30, 2022 and 10.50% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 13.50% at September 30, 2022 compared to 13.79% at June 30, 2022 and 13.65% a year ago.

Book value per share declined to $33.50 primarily due to non-credit-related, negative market value adjustments to our investment securities available-for-sale portfolio during the quarter. Market value adjustments were the result of changes in interest rates, market spreads and market conditions subsequent to purchase.

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.

(charts attached)

Category: Earnings

1st SOURCE CORPORATION

3rd QUARTER 2022 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,

 

 

2022

 

2022

 

2021

 

2022

 

2021

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

 

Assets

 

$

8,019,104

 

 

$

8,092,316

 

 

$

7,796,763

 

 

$

8,040,090

 

 

$

7,603,119

 

Earning assets

 

 

7,615,593

 

 

 

7,685,631

 

 

 

7,404,252

 

 

 

7,645,464

 

 

 

7,211,523

 

Investments

 

 

1,863,979

 

 

 

1,835,974

 

 

 

1,482,016

 

 

 

1,862,252

 

 

 

1,351,768

 

Loans and leases

 

 

5,627,718

 

 

 

5,467,808

 

 

 

5,427,080

 

 

 

5,474,401

 

 

 

5,480,229

 

Deposits

 

 

6,673,239

 

 

 

6,795,793

 

 

 

6,401,844

 

 

 

6,695,507

 

 

 

6,221,866

 

Interest bearing liabilities

 

 

4,958,209

 

 

 

5,049,145

 

 

 

4,811,516

 

 

 

4,973,767

 

 

 

4,725,850

 

Common shareholders’ equity

 

 

873,209

 

 

 

861,134

 

 

 

915,552

 

 

 

881,574

 

 

 

902,907

 

Total equity

 

 

931,412

 

 

 

915,714

 

 

 

960,235

 

 

 

936,974

 

 

 

947,248

 

INCOME STATEMENT DATA

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

68,934

 

 

$

63,462

 

 

$

62,224

 

 

$

192,014

 

 

$

176,571

 

Net interest income - FTE(1)

 

 

69,116

 

 

 

63,585

 

 

 

62,335

 

 

 

192,427

 

 

 

176,921

 

Provision (recovery of provision) for credit losses

 

 

3,167

 

 

 

2,503

 

 

 

(2,559

)

 

 

7,903

 

 

 

(3,186

)

Noninterest income

 

 

22,007

 

 

 

22,830

 

 

 

25,497

 

 

 

67,982

 

 

 

76,264

 

Noninterest expense

 

 

45,331

 

 

 

45,655

 

 

 

48,064

 

 

 

136,322

 

 

 

137,402

 

Net income

 

 

32,745

 

 

 

29,330

 

 

 

32,481

 

 

 

89,476

 

 

 

90,822

 

Net income available to common shareholders

 

 

32,737

 

 

 

29,314

 

 

 

32,483

 

 

 

89,441

 

 

 

90,811

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

1.32

 

 

$

1.18

 

 

$

1.29

 

 

$

3.59

 

 

$

3.59

 

Diluted net income per common share

 

 

1.32

 

 

 

1.18

 

 

 

1.29

 

 

 

3.59

 

 

 

3.59

 

Common cash dividends declared

 

 

0.32

 

 

 

0.31

 

 

 

0.31

 

 

 

0.94

 

 

 

0.90

 

Book value per common share(2)

 

 

33.50

 

 

 

34.74

 

 

 

36.75

 

 

 

33.50

 

 

 

36.75

 

Tangible book value per common share(1)

 

 

30.10

 

 

 

31.33

 

 

 

33.37

 

 

 

30.10

 

 

 

33.37

 

Market value - High

 

 

51.29

 

 

 

48.42

 

 

 

48.63

 

 

 

52.70

 

 

 

51.02

 

Market value - Low

 

 

42.38

 

 

 

42.29

 

 

 

41.19

 

 

 

42.29

 

 

 

38.73

 

Basic weighted average common shares outstanding

 

 

24,656,736

 

 

 

24,691,747

 

 

 

24,919,956

 

 

 

24,697,106

 

 

 

25,126,703

 

Diluted weighted average common shares outstanding

 

 

24,656,736

 

 

 

24,691,747

 

 

 

24,919,956

 

 

 

24,697,106

 

 

 

25,126,703

 

KEY RATIOS

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.62

%

 

 

1.45

%

 

 

1.65

%

 

 

1.49

%

 

 

1.60

%

Return on average common shareholders’ equity

 

 

14.87

 

 

 

13.65

 

 

 

14.08

 

 

 

13.56

 

 

 

13.45

 

Average common shareholders’ equity to average assets

 

 

10.89

 

 

 

10.64

 

 

 

11.74

 

 

 

10.96

 

 

 

11.88

 

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

 

 

9.26

 

 

 

9.72

 

 

 

10.50

 

 

 

9.26

 

 

 

10.50

 

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

 

 

13.50

 

 

 

13.79

 

 

 

13.65

 

 

 

13.50

 

 

 

13.65

 

Risk-based capital - Tier 1(3)

 

 

15.24

 

 

 

15.53

 

 

 

15.33

 

 

 

15.24

 

 

 

15.33

 

Risk-based capital - Total(3)

 

 

16.50

 

 

 

16.79

 

 

 

16.59

 

 

 

16.50

 

 

 

16.59

 

Net interest margin

 

 

3.59

 

 

 

3.31

 

 

 

3.33

 

 

 

3.36

 

 

 

3.27

 

Net interest margin - FTE(1)

 

 

3.60

 

 

 

3.32

 

 

 

3.34

 

 

 

3.37

 

 

 

3.28

 

Efficiency ratio: expense to revenue

 

 

49.85

 

 

 

52.91

 

 

 

54.79

 

 

 

52.43

 

 

 

54.34

 

Efficiency ratio: expense to revenue - adjusted(1)

 

 

48.71

 

 

 

51.72

 

 

 

53.38

 

 

 

51.16

 

 

 

52.44

 

Net charge offs (recoveries) to average loans and leases

 

 

0.02

 

 

 

(0.03

)

 

 

0.00

 

 

 

(0.01

)

 

 

0.09

 

Loan and lease loss allowance to loans and leases

 

 

2.36

 

 

 

2.39

 

 

 

2.50

 

 

 

2.36

 

 

 

2.50

 

Nonperforming assets to loans and leases

 

 

0.48

 

 

 

0.60

 

 

 

0.84

 

 

 

0.48

 

 

 

0.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2022

 

2022

 

2022

 

2021

 

2021

END OF PERIOD BALANCES

 

 

 

 

 

 

 

 

 

 

Assets

 

$

8,097,486

 

 

$

8,029,359

 

 

$

8,012,463

 

 

$

8,096,289

 

 

$

7,964,092

 

Loans and leases

 

 

5,762,078

 

 

 

5,551,216

 

 

 

5,394,003

 

 

 

5,346,214

 

 

 

5,358,797

 

Deposits

 

 

6,621,231

 

 

 

6,744,896

 

 

 

6,673,092

 

 

 

6,679,065

 

 

 

6,522,505

 

Allowance for loan and lease losses

 

 

135,736

 

 

 

132,865

 

 

 

129,959

 

 

 

127,492

 

 

 

133,755

 

Goodwill and intangible assets

 

 

83,911

 

 

 

83,916

 

 

 

83,921

 

 

 

83,926

 

 

 

83,931

 

Common shareholders’ equity

 

 

826,059

 

 

 

856,251

 

 

 

864,850

 

 

 

916,255

 

 

 

911,333

 

Total equity

 

 

886,360

 

 

 

910,667

 

 

 

919,470

 

 

 

969,464

 

 

 

956,397

 

ASSET QUALITY

 

 

 

 

 

 

 

 

 

 

Loans and leases past due 90 days or more

 

$

165

 

 

$

50

 

 

$

274

 

 

$

249

 

 

$

96

 

Nonaccrual loans and leases

 

 

27,813

 

 

 

33,490

 

 

 

35,435

 

 

 

38,706

 

 

 

43,166

 

Repossessions

 

 

26

 

 

 

102

 

 

 

73

 

 

 

861

 

 

 

690

 

Equipment owned under operating leases

 

 

1

 

 

 

43

 

 

 

343

 

 

 

1,518

 

 

 

1,598

 

Total nonperforming assets

 

$

28,005

 

 

$

33,685

 

 

$

36,125

 

 

$

41,334

 

 

$

45,550

 

(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,

 

 

2022

 

2022

 

2021

 

2021

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

86,952

 

 

$

116,915

 

 

$

54,420

 

 

$

77,740

 

Federal funds sold and interest bearing deposits with other banks

 

 

30,652

 

 

 

164,848

 

 

 

470,767

 

 

 

559,542

 

Investment securities available-for-sale

 

 

1,801,194

 

 

 

1,836,389

 

 

 

1,863,041

 

 

 

1,583,240

 

Other investments

 

 

25,538

 

 

 

25,538

 

 

 

27,189

 

 

 

27,189

 

Mortgages held for sale

 

 

3,058

 

 

 

5,525

 

 

 

13,284

 

 

 

34,594

 

Loans and leases, net of unearned discount:

 

 

 

 

 

 

 

 

Commercial and agricultural

 

 

835,762

 

 

 

842,618

 

 

 

918,712

 

 

 

1,005,849

 

Solar

 

 

358,635

 

 

 

350,472

 

 

 

348,302

 

 

 

303,995

 

Auto and light truck

 

 

743,324

 

 

 

708,720

 

 

 

603,775

 

 

 

605,258

 

Medium and heavy duty truck

 

 

293,068

 

 

 

278,334

 

 

 

259,740

 

 

 

248,604

 

Aircraft

 

 

997,995

 

 

 

959,876

 

 

 

898,401

 

 

 

900,077

 

Construction equipment

 

 

878,692

 

 

 

803,734

 

 

 

754,273

 

 

 

729,412

 

Commercial real estate

 

 

937,423

 

 

 

931,058

 

 

 

929,341

 

 

 

939,131

 

Residential real estate and home equity

 

 

568,602

 

 

 

535,589

 

 

 

500,590

 

 

 

492,893

 

Consumer

 

 

148,577

 

 

 

140,815

 

 

 

133,080

 

 

 

133,578

 

Total loans and leases

 

 

5,762,078

 

 

 

5,551,216

 

 

 

5,346,214

 

 

 

5,358,797

 

Allowance for loan and lease losses

 

 

(135,736

)

 

 

(132,865

)

 

 

(127,492

)

 

 

(133,755

)

Net loans and leases

 

 

5,626,342

 

 

 

5,418,351

 

 

 

5,218,722

 

 

 

5,225,042

 

Equipment owned under operating leases, net

 

 

32,964

 

 

 

36,579

 

 

 

48,433

 

 

 

51,478

 

Net premises and equipment

 

 

44,837

 

 

 

45,250

 

 

 

47,038

 

 

 

46,748

 

Goodwill and intangible assets

 

 

83,911

 

 

 

83,916

 

 

 

83,926

 

 

 

83,931

 

Accrued income and other assets

 

 

362,038

 

 

 

296,048

 

 

 

269,469

 

 

 

274,588

 

Total assets

 

$

8,097,486

 

 

$

8,029,359

 

 

$

8,096,289

 

 

$

7,964,092

 

LIABILITIES

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

$

2,047,328

 

 

$

2,032,566

 

 

$

2,052,981

 

 

$

2,012,389

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

Interest-bearing demand

 

 

2,527,461

 

 

 

2,644,590

 

 

 

2,455,580

 

 

 

2,358,512

 

Savings

 

 

1,267,531

 

 

 

1,282,791

 

 

 

1,286,367

 

 

 

1,214,088

 

Time

 

 

778,911

 

 

 

784,949

 

 

 

884,137

 

 

 

937,516

 

Total interest-bearing deposits

 

 

4,573,903

 

 

 

4,712,330

 

 

 

4,626,084

 

 

 

4,510,116

 

Total deposits

 

 

6,621,231

 

 

 

6,744,896

 

 

 

6,679,065

 

 

 

6,522,505

 

Short-term borrowings:

 

 

 

 

 

 

 

 

Federal funds purchased and securities sold under agreements to repurchase

 

 

145,192

 

 

 

162,649

 

 

 

194,727

 

 

 

210,275

 

Other short-term borrowings

 

 

195,270

 

 

 

5,190

 

 

 

5,300

 

 

 

5,390

 

Total short-term borrowings

 

 

340,462

 

 

 

167,839

 

 

 

200,027

 

 

 

215,665

 

Long-term debt and mandatorily redeemable securities

 

 

47,587

 

 

 

48,459

 

 

 

71,251

 

 

 

81,301

 

Subordinated notes

 

 

58,764

 

 

 

58,764

 

 

 

58,764

 

 

 

58,764

 

Accrued expenses and other liabilities

 

 

143,082

 

 

 

98,734

 

 

 

117,718

 

 

 

129,460

 

Total liabilities

 

 

7,211,126

 

 

 

7,118,692

 

 

 

7,126,825

 

 

 

7,007,695

 

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, 2022, June 30, 2022, December 31, 2021, and September 30, 2021, respectively

 

 

436,538

 

 

 

436,538

 

 

 

436,538

 

 

 

436,538

 

Retained earnings

 

 

671,541

 

 

 

646,600

 

 

 

603,787

 

 

 

583,631

 

Cost of common stock in treasury (3,548,496, 3,555,267, 3,466,162, and 3,408,141 shares at September 30, 2022, June 30, 2022, December 31, 2021, and

September 30, 2021, respectively)

 

 

(119,743

)

 

 

(119,876

)

 

 

(114,209

)

 

 

(111,253

)

Accumulated other comprehensive (loss) income

 

 

(162,277

)

 

 

(107,011

)

 

 

(9,861

)

 

 

2,417

 

Total shareholders’ equity

 

 

826,059

 

 

 

856,251

 

 

 

916,255

 

 

 

911,333

 

Noncontrolling interests

 

 

60,301

 

 

 

54,416

 

 

 

53,209

 

 

 

45,064

 

Total equity

 

 

886,360

 

 

 

910,667

 

 

 

969,464

 

 

 

956,397

 

Total liabilities and equity

 

$

8,097,486

 

 

$

8,029,359

 

 

$

8,096,289

 

 

$

7,964,092 

 

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,

 

2022

 

2022

 

2021

 

2022

 

2021

Interest income:

 

 

 

 

 

 

 

 

 

Loans and leases

$

69,027

 

 

$

60,415

 

 

$

61,696

 

 

$

184,650

 

 

$

176,704

 

Investment securities, taxable

 

6,691

 

 

 

6,289

 

 

 

4,533

 

 

 

19,324

 

 

 

12,676

 

Investment securities, tax-exempt

 

339

 

 

 

157

 

 

 

140

 

 

 

630

 

 

 

468

 

Other

 

421

 

 

 

1,168

 

 

 

360

 

 

 

1,952

 

 

 

943

 

Total interest income

 

76,478

 

 

 

68,029

 

 

 

66,729

 

 

 

206,556

 

 

 

190,791

 

Interest expense:

 

 

 

 

 

 

 

 

 

Deposits

 

6,556

 

 

 

3,553

 

 

 

2,924

 

 

 

12,485

 

 

 

9,652

 

Short-term borrowings

 

380

 

 

 

23

 

 

 

25

 

 

 

427

 

 

 

90

 

Subordinated notes

 

904

 

 

 

851

 

 

 

816

 

 

 

2,578

 

 

 

2,448

 

Long-term debt and mandatorily redeemable securities

 

(296

)

 

 

140

 

 

 

740

 

 

 

(948

)

 

 

2,030

 

Total interest expense

 

7,544

 

 

 

4,567

 

 

 

4,505

 

 

 

14,542

 

 

 

14,220

 

Net interest income

 

68,934

 

 

 

63,462

 

 

 

62,224

 

 

 

192,014

 

 

 

176,571

 

Provision (recovery of provision) for credit losses

 

3,167

 

 

 

2,503

 

 

 

(2,559

)

 

 

7,903

 

 

 

(3,186

)

Net interest income after provision for credit losses

 

65,767

 

 

 

60,959

 

 

 

64,783

 

 

 

184,111

 

 

 

179,757

 

Noninterest income:

 

 

 

 

 

 

 

 

 

Trust and wealth advisory

 

5,498

 

 

 

6,087

 

 

 

5,886

 

 

 

17,499

 

 

 

17,833

 

Service charges on deposit accounts

 

3,240

 

 

 

2,942

 

 

 

2,767

 

 

 

8,974

 

 

 

7,722

 

Debit card

 

4,628

 

 

 

4,561

 

 

 

4,570

 

 

 

13,383

 

 

 

13,506

 

Mortgage banking

 

864

 

 

 

1,062

 

 

 

3,149

 

 

 

3,303

 

 

 

9,909

 

Insurance commissions

 

1,695

 

 

 

1,568

 

 

 

1,862

 

 

 

5,168

 

 

 

5,698

 

Equipment rental

 

2,761

 

 

 

3,295

 

 

 

3,946

 

 

 

9,718

 

 

 

12,830

 

Losses on investment securities available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

(680

)

Other

 

3,321

 

 

 

3,315

 

 

 

3,317

 

 

 

9,937

 

 

 

9,446

 

Total noninterest income

 

22,007

 

 

 

22,830

 

 

 

25,497

 

 

 

67,982

 

 

 

76,264

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

26,386

 

 

 

25,562

 

 

 

26,974

 

 

 

77,415

 

 

 

77,680

 

Net occupancy

 

2,582

 

 

 

2,524

 

 

 

2,654

 

 

 

7,917

 

 

 

7,900

 

Furniture and equipment

 

1,372

 

 

 

1,384

 

 

 

1,494

 

 

 

4,051

 

 

 

4,388

 

Data processing

 

5,802

 

 

 

5,402

 

 

 

4,950

 

 

 

16,412

 

 

 

14,851

 

Depreciation – leased equipment

 

2,233

 

 

 

2,664

 

 

 

3,239

 

 

 

7,912

 

 

 

10,562

 

Professional fees

 

1,539

 

 

 

2,094

 

 

 

1,815

 

 

 

5,241

 

 

 

5,574

 

FDIC and other insurance

 

939

 

 

 

893

 

 

 

396

 

 

 

2,682

 

 

 

1,833

 

Business development and marketing

 

1,415

 

 

 

1,669

 

 

 

4,465

 

 

 

4,352

 

 

 

6,813

 

Other

 

3,063

 

 

 

3,463

 

 

 

2,077

 

 

 

10,340

 

 

 

7,801

 

Total noninterest expense

 

45,331

 

 

 

45,655

 

 

 

48,064

 

 

 

136,322

 

 

 

137,402

 

Income before income taxes

 

42,443

 

 

 

38,134

 

 

 

42,216

 

 

 

115,771

 

 

 

118,619

 

Income tax expense

 

9,698

 

 

 

8,804

 

 

 

9,735

 

 

 

26,295

 

 

 

27,797

 

Net income

 

32,745

 

 

 

29,330

 

 

 

32,481

 

 

 

89,476

 

 

 

90,822

 

Net (income) loss attributable to noncontrolling interests

 

(8

)

 

 

(16

)

 

 

2

 

 

 

(35

)

 

 

(11

)

Net income available to common shareholders

$

32,737

 

 

$

29,314

 

 

$

32,483

 

 

$

89,441

 

 

$

90,811

 

Per common share:

 

 

 

 

 

 

 

 

 

Basic net income per common share

$

1.32

 

 

$

1.18

 

 

$

1.29

 

 

$

3.59

 

 

$

3.59

 

Diluted net income per common share

$

1.32

 

 

$

1.18

 

 

$

1.29

 

 

$

3.59

 

 

$

3.59

 

Cash dividends

$

0.32

 

 

$

0.31

 

 

$

0.31

 

 

$

0.94

 

 

$

0.90

 

Basic weighted average common shares outstanding

 

24,656,736

 

 

 

24,691,747

 

 

 

24,919,956

 

 

 

24,697,106

 

 

 

25,126,703

 

Diluted weighted average common shares outstanding

 

24,656,736

 

 

 

24,691,747

 

 

 

24,919,956

 

 

 

24,697,106

 

 

 

25,126,703

 

1st SOURCE CORPORATION

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY

INTEREST RATES AND INTEREST DIFFERENTIAL

(Unaudited - Dollars in thousands)

 

Three Months Ended

 

September 30, 2022

 

June 30, 2022

 

September 30, 2021

 

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

$

1,816,138

 

 

$

6,691

 

 

1.46

%

 

$

1,805,044

 

 

$

6,289

 

 

1.40

%

 

$

1,451,523

 

 

$

4,533

 

 

1.24

%

Tax exempt(1)

 

47,841

 

 

 

426

 

 

3.53

%

 

 

30,930

 

 

 

195

 

 

2.53

%

 

 

30,493

 

 

 

172

 

 

2.24

%

Mortgages held for sale

 

4,272

 

 

 

58

 

 

5.39

%

 

 

4,889

 

 

 

52

 

 

4.27

%

 

 

17,750

 

 

 

120

 

 

2.68

%

Loans and leases, net of unearned discount(1)

 

5,627,718

 

 

 

69,064

 

 

4.87

%

 

 

5,467,808

 

 

 

60,448

 

 

4.43

%

 

 

5,427,080

 

 

 

61,655

 

 

4.51

%

Other investments

 

119,624

 

 

 

421

 

 

1.40

%

 

 

376,960

 

 

 

1,168

 

 

1.24

%

 

 

477,406

 

 

 

360

 

 

0.30

%

Total earning assets(1)

 

7,615,593

 

 

 

76,660

 

 

3.99

%

 

 

7,685,631

 

 

 

68,152

 

 

3.56

%

 

 

7,404,252

 

 

 

66,840

 

 

3.58

%

Cash and due from banks

 

74,329

 

 

 

 

 

 

 

90,101

 

 

 

 

 

 

 

76,915

 

 

 

 

 

Allowance for loan and lease losses

 

(133,989

)

 

 

 

 

 

 

(132,020

)

 

 

 

 

 

 

(137,206

)

 

 

 

 

Other assets

 

463,171

 

 

 

 

 

 

 

448,604

 

 

 

 

 

 

 

452,802

 

 

 

 

 

Total assets

$

8,019,104

 

 

 

 

 

 

$

8,092,316

 

 

 

 

 

 

$

7,796,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

$

4,634,092

 

 

$

6,556

 

 

0.56

%

 

$

4,753,331

 

 

$

3,553

 

 

0.30

%

 

$

4,488,169

 

 

$

2,924

 

 

0.26

%

Short-term borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

159,345

 

 

 

21

 

 

0.05

%

 

 

176,994

 

 

 

23

 

 

0.05

%

 

 

177,720

 

 

 

24

 

 

0.05

%

Other short-term borrowings

 

57,609

 

 

 

359

 

 

2.47

%

 

 

5,394

 

 

 

 

 

%

 

 

5,492

 

 

 

1

 

 

0.07

%

Subordinated notes

 

58,764

 

 

 

904

 

 

6.10

%

 

 

58,764

 

 

 

851

 

 

5.81

%

 

 

58,764

 

 

 

816

 

 

5.51

%

Long-term debt and mandatorily redeemable securities

 

48,399

 

 

 

(296

)

 

(2.43

)%

 

 

54,662

 

 

 

140

 

 

1.03

%

 

 

81,371

 

 

 

740

 

 

3.61

%

Total interest-bearing liabilities

 

4,958,209

 

 

 

7,544

 

 

0.60

%

 

 

5,049,145

 

 

 

4,567

 

 

0.36

%

 

 

4,811,516

 

 

 

4,505

 

 

0.37

%

Noninterest-bearing deposits

 

2,039,147

 

 

 

 

 

 

 

2,042,462

 

 

 

 

 

 

 

1,913,675

 

 

 

 

 

Other liabilities

 

90,336

 

 

 

 

 

 

 

84,995

 

 

 

 

 

 

 

111,337

 

 

 

 

 

Shareholders’ equity

 

873,209

 

 

 

 

 

 

 

861,134

 

 

 

 

 

 

 

915,552

 

 

 

 

 

Noncontrolling interests

 

58,203

 

 

 

 

 

 

 

54,580

 

 

 

 

 

 

 

44,683

 

 

 

 

 

Total liabilities and equity

$

8,019,104

 

 

 

 

 

 

$

8,092,316

 

 

 

 

 

 

$

7,796,763

 

 

 

 

 

Less: Fully tax-equivalent adjustments

 

 

 

(182

)

 

 

 

 

 

 

(123

)

 

 

 

 

 

 

(111

)

 

 

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

 

 

$

68,934

 

 

3.59

%

 

 

 

$

63,462

 

 

3.31

%

 

 

 

$

62,224

 

 

3.33

%

Fully tax-equivalent adjustments

 

 

 

182

 

 

 

 

 

 

 

123

 

 

 

 

 

 

 

111

 

 

 

Net interest income/margin - FTE(1)

 

 

$

69,116

 

 

3.60

%

 

 

 

$

63,585

 

 

3.32

%

 

 

 

$

62,335

 

 

3.34

%

(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, 2022

 

September 30, 2021

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Rate

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Rate

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

Taxable

$

1,826,095

 

 

$

19,324

 

 

1.41

%

 

$

1,317,976

 

 

$

12,676

 

 

1.29

%

Tax exempt(1)

 

36,157

 

 

 

786

 

 

2.91

%

 

 

33,792

 

 

 

578

 

 

2.29

%

Mortgages held for sale

 

5,967

 

 

 

177

 

 

3.97

%

 

 

13,094

 

 

 

260

 

 

2.65

%

Loans and leases, net of unearned discount(1)

 

5,474,401

 

 

 

184,730

 

 

4.51

%

 

 

5,480,229

 

 

 

176,684

 

 

4.31

%

Other investments

 

302,844

 

 

 

1,952

 

 

0.86

%

 

 

366,432

 

 

 

943

 

 

0.34

%

Total earning assets(1)

 

7,645,464

 

 

 

206,969

 

 

3.62

%

 

 

7,211,523

 

 

 

191,141

 

 

3.54

%

Cash and due from banks

 

75,497

 

 

 

 

 

 

 

76,103

 

 

 

 

 

Allowance for loan and lease losses

 

(131,572

)

 

 

 

 

 

 

(140,800

)

 

 

 

 

Other assets

 

450,701

 

 

 

 

 

 

 

456,293

 

 

 

 

 

Total assets

$

8,040,090

 

 

 

 

 

 

$

7,603,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

4,658,394

 

 

 

12,485

 

 

0.36

%

 

 

4,403,595

 

 

 

9,652

 

 

0.29

%

Short-term borrowings:

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

176,029

 

 

 

67

 

 

0.05

%

 

 

175,869

 

 

 

87

 

 

0.07

%

Other short-term borrowings

 

22,983

 

 

 

360

 

 

2.09

%

 

 

6,336

 

 

 

3

 

 

0.06

%

Subordinated notes

 

58,764

 

 

 

2,578

 

 

5.87

%

 

 

58,764

 

 

 

2,448

 

 

5.57

%

Long-term debt and mandatorily redeemable securities

 

57,597

 

 

 

(948

)

 

(2.20

)%

 

 

81,286

 

 

 

2,030

 

 

3.34

%

Total interest-bearing liabilities

 

4,973,767

 

 

 

14,542

 

 

0.39

%

 

 

4,725,850

 

 

 

14,220

 

 

0.40

%

Noninterest-bearing deposits

 

2,037,113

 

 

 

 

 

 

 

1,818,271

 

 

 

 

 

Other liabilities

 

92,236

 

 

 

 

 

 

 

111,750

 

 

 

 

 

Shareholders’ equity

 

881,574

 

 

 

 

 

 

 

902,907

 

 

 

 

 

Noncontrolling interests

 

55,400

 

 

 

 

 

 

 

44,341

 

 

 

 

 

Total liabilities and equity

$

8,040,090

 

 

 

 

 

 

$

7,603,119

 

 

 

 

 

Less: Fully tax-equivalent adjustments

 

 

 

(413

)

 

 

 

 

 

 

(350

)

 

 

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

 

 

$

192,014

 

 

3.36

%

 

 

 

$

176,571

 

 

3.27

%

Fully tax-equivalent adjustments

 

 

 

413

 

 

 

 

 

 

 

350

 

 

 

Net interest income/margin - FTE(1)

 

 

$

192,427

 

 

3.37

%

 

 

 

$

176,921

 

 

3.28

%

(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,

 

 

2022

 

2022

 

2021

 

 

2022

 

2021

Calculation of Net Interest Margin

 

 

 

 

 

 

 

 

 

 

(A)

Interest income (GAAP)

$

76,478

 

 

$

68,029

 

 

$

66,729

 

 

 

$

206,556

 

 

$

190,791

 

 

Fully tax-equivalent adjustments:

 

 

 

 

 

 

 

 

 

 

(B)

– Loans and leases

 

95

 

 

 

85

 

 

 

79

 

 

 

 

257

 

 

 

240

 

(C)

– Tax exempt investment securities

 

87

 

 

 

38

 

 

 

32

 

 

 

 

156

 

 

 

110

 

(D)

Interest income – FTE (A+B+C)

 

76,660

 

 

 

68,152

 

 

 

66,840

 

 

 

 

206,969

 

 

 

191,141

 

(E)

Interest expense (GAAP)

 

7,544

 

 

 

4,567

 

 

 

4,505

 

 

 

 

14,542

 

 

 

14,220

 

(F)

Net interest income (GAAP) (A-E)

 

68,934

 

 

 

63,462

 

 

 

62,224

 

 

 

 

192,014

 

 

 

176,571

 

(G)

Net interest income - FTE (D-E)

 

69,116

 

 

 

63,585

 

 

 

62,335

 

 

 

 

192,427

 

 

 

176,921

 

(H)

Annualization factor

 

3.967

 

 

 

4.011

 

 

 

3.967

 

 

 

 

1.337

 

 

 

1.337

 

(I)

Total earning assets

$

7,615,593

 

 

$

7,685,631

 

 

$

7,404,252

 

 

 

$

7,645,464

 

 

$

7,211,523

 

 

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

 

3.59

%

 

 

3.31

%

 

 

3.33

%

 

 

 

3.36

%

 

 

3.27

%

 

Net interest margin – FTE (G*H)/I

 

3.60

%

 

 

3.32

%

 

 

3.34

%

 

 

 

3.37

%

 

 

3.28

%

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

(F)

Net interest income (GAAP)

$

68,934

 

 

$

63,462

 

 

$

62,224

 

 

 

$

192,014

 

 

$

176,571

 

(G)

Net interest income – FTE

 

69,116

 

 

 

63,585

 

 

 

62,335

 

 

 

 

192,427

 

 

 

176,921

 

(J)

Plus: noninterest income (GAAP)

 

22,007

 

 

 

22,830

 

 

 

25,497

 

 

 

 

67,982

 

 

 

76,264

 

(K)

Less: gains/losses on investment securities and partnership investments

 

(418

)

 

 

(636

)

 

 

(623

)

 

 

 

(1,498

)

 

 

(735

)

(L)

Less: depreciation – leased equipment

 

(2,233

)

 

 

(2,664

)

 

 

(3,239

)

 

 

 

(7,912

)

 

 

(10,562

)

(M)

Total net revenue (GAAP) (F+J)

 

90,941

 

 

 

86,292

 

 

 

87,721

 

 

 

 

259,996

 

 

 

252,835

 

(N)

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

 

88,472

 

 

 

83,115

 

 

 

83,970

 

 

 

 

250,999

 

 

 

241,888

 

(O)

Noninterest expense (GAAP)

 

45,331

 

 

 

45,655

 

 

 

48,064

 

 

 

 

136,322

 

 

 

137,402

 

(L)

Less:depreciation – leased equipment

 

(2,233

)

 

 

(2,664

)

 

 

(3,239

)

 

 

 

(7,912

)

 

 

(10,562

)

(P)

Noninterest expense – adjusted (O–L)

 

43,098

 

 

 

42,991

 

 

 

44,825

 

 

 

 

128,410

 

 

 

126,840

 

 

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

 

49.85

%

 

 

52.91

%

 

 

54.79

%

 

 

 

52.43

%

 

 

54.34

%

 

Efficiency ratio – adjusted (P/N)

 

48.71

%

 

 

51.72

%

 

 

53.38

%

 

 

 

51.16

%

 

 

52.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

End of Period

 

 

 

 

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

 

 

 

 

 

2022

 

2022

 

2021

 

 

 

 

 

Calculation of Tangible Common Equity-to-Tangible Assets Ratio

 

 

 

 

 

 

 

 

 

(Q)

Total common shareholders’ equity (GAAP)

$

826,059

 

 

$

856,251

 

 

$

911,333

 

 

 

 

 

 

(R)

Less: goodwill and intangible assets

 

(83,911

)

 

 

(83,916

)

 

 

(83,931

)

 

 

 

 

 

(S)

Total tangible common shareholders’ equity (Q–R)

$

742,148

 

 

$

772,335

 

 

$

827,402

 

 

 

 

 

 

(T)

Total assets (GAAP)

 

8,097,486

 

 

 

8,029,359

 

 

 

7,964,092

 

 

 

 

 

 

(R)

Less: goodwill and intangible assets

 

(83,911

)

 

 

(83,916

)

 

 

(83,931

)

 

 

 

 

 

(U)

Total tangible assets (T–R)

$

8,013,575

 

 

$

7,945,443

 

 

$

7,880,161

 

 

 

 

 

 

 

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

 

10.20

%

 

 

10.66

%

 

 

11.44

%

 

 

 

 

 

 

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

 

9.26

%

 

 

9.72

%

 

 

10.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Tangible Book Value per Common Share

 

 

 

 

 

 

 

 

 

 

(Q)

Total common shareholders’ equity (GAAP)

$

826,059

 

 

$

856,251

 

 

$

911,333

 

 

 

 

 

 

(V)

Actual common shares outstanding

 

24,657,178

 

 

 

24,650,407

 

 

 

24,797,533

 

 

 

 

 

 

 

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

$

33.50

 

 

$

34.74

 

 

$

36.75

 

 

 

 

 

 

 

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

$

30.10

 

 

$

31.33

 

 

$

33.37

 

 

 

 

 

 

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

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