1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today announced third quarter net income of $11.20 million, an increase of 66.39% over the $6.73 million in the third quarter 2009. For the first three quarters of the year, net income was $28.68 million versus $19.27 million a year earlier, a 48.84% increase. Diluted net income per common share for the third quarter of 2010 was $0.39 versus $0.21, up 85.71% over the same period in 2009. Diluted net income per common share for the first three quarters was $0.96, an increase of 60.00% compared to $0.60 in 2009.
At the October meeting, the Board of Directors approved a cash dividend of $0.16 per common share, payable on November 15, 2010 to shareholders of record on November 5, 2010.
Christopher J. Murphy III, Chairman of 1st Source, commented, “We continue to see improvement in our performance as we focus on the basics in these challenging times. We have concentrated on taking care of our clients, and on offering advice and information to help them weather the downturn.”
“Credit continues to be challenging. During the quarter, we provided $5.58 million to our loan and lease loss reserve, net-charge-offs were $4.08 million, and our nonperforming assets increased somewhat. Our reserve for loan and lease losses was 2.88% of loans and leases compared to 2.76% a year earlier as we continue to maintain strong reserves.”
“Although pleased with the bank's performance, which is one of the best quarters in our history, we are disappointed that the economy has not improved more quickly and are very concerned about the mounting federal deficit and the impact it all will have on future interest rates. Trying to plan how best to position our investment portfolios with remarkably low rates now, with the probability of dramatically higher rates in the future, is challenging at best. We also worry about the unintended consequences of increasing regulation on community banks. While well intended, each new law and regulation increases costs of serving our clients and makes it more difficult to do so. All of us in banking are being painted with the same brush. We are a community bank focused on meeting the needs of our clients now and for future generations. Our success is built on long-lasting relationships. It is that focus that kept us out of sub-prime lending and offering exotic mortgage instruments. In spite of anything happening in Washington, good or bad, we stay focused on providing outstanding client service, watching expenses, and concentrating on credit quality,” concluded Mr. Murphy.