1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today announced net income of $48.20 million for the year of 2011, an increase of 16.85% over the $41.24 million reported in 2010. The annual net income sets a record as the highest in company history. Fourth quarter net income was $11.18 million, down 11.02% compared to $12.57 million in the fourth quarter of 2010, partially due to lower interest recoveries on nonperforming loans and lower mortgage banking income in the quarter.
Diluted net income per common share for the year was $1.96, an all-time record and an increase of 61.98% over the $1.21 per common share a year earlier. Diluted net income per common share for the fourth quarter was $0.45, up 80.00% compared to $0.25 per common share reported in the fourth quarter of the previous year. The December 2010 TARP repurchase led to significant improvement in diluted earnings per share, as diluted net income per common share for the fourth quarter and year of 2010 was negatively impacted by the preferred stock dividends and the accretion of discount on the preferred stock issued to the US Treasury under the TARP program in January 2009. Adjusting for these, the diluted net income would have been $1.70 per common share for the year of 2010 and $0.52 per common share for the fourth quarter of 2010.
At the January 2012 meeting, the Board of Directors approved a cash dividend of $0.16 per common share. The cash dividend is payable on February 15, 2012 to shareholders of record on February 6, 2012. Dividends for 2011 increased 4.92% over the previous year and achieved 24 years of consecutive dividend growth.
Christopher J. Murphy, III, Chairman of 1st Source, commented, "2011 was a good year for 1st Source Corporation. We set a record for annual net income and for earnings per share; and we continue a record of 24 years of consecutive dividend growth. 1st Source is strong and stable, and because of that, through good times and bad, we have been able to live up to our commitment of keeping our client’s best interests in mind while working to meet their unique individual needs.