1st Source Corp. (SRCE, Financial) filed Annual Report for the period ended 2011-12-31.
1st Source Corp. has a market cap of $596.6 million; its shares were traded at around $25.97 with a P/E ratio of 12.6 and P/S ratio of 2.2. The dividend yield of 1st Source Corp. stocks is 2.6%. 1st Source Corp. had an annual average earning growth of 6.2% over the past 10 years.
Net interest margin (the ratio of net interest income to average earning assets) is significantly affected by movements in interest rates and changes in the mix of earning assets and the liabilities that fund those assets. Net interest margin on a fully taxable equivalent basis was 3.69% in 2011 compared to 3.59% in 2010, and 3.14% in 2009. The higher margin in 2011 reflects the decline in funding costs. Net interest income was $148.40 million for 2011, compared to $147.50 million for 2010. Tax-equivalent net interest income totaled $150.91 million for 2011, relatively flat from the $150.87 million reported for 2010.
Income Taxes 1st Source recognized income tax expense in 2011 of $25.59 million, compared to $19.23 million in 2010, and $6.03 million in 2009. The effective tax rate in 2011 was 34.69% compared to 31.80% in 2010, and 19.13% in 2009. The effective tax rate was higher in 2011 compared to 2010 due to a decrease in tax-exempt interest in relation to income before taxes. Additionally, during the first quarter of 2011 we reached a state tax settlement for the 2008 year and as a result recorded a reduction of unrecognized tax benefit in the amount of $0.84 million that affected the effective tax rate and increased earnings in the amount of $0.47 million. The effective tax rate was lower in 2009 compared to 2011 and 2010 due to a one time benefit of $2.60 million and an increase in tax-exempt interest in relation to income before taxes. The 2009 benefit was the result of a reduction in our tax contingency reserve due to the resolution of tax audits. For a detailed analysis of 1st Sources income taxes see Part II, Item 8, Financial Statements and Supplementary Data Note 17 of the Notes to Consolidated Financial Statements.
Commercial and agricultural lending, excluding those loans secured by real estate, increased $15.34 million or 2.89% in 2011 over 2010. Commercial and agricultural lending outstandings were $545.57 million and $530.23 million at December 31, 2011 and December 31, 2010, respectively. This increase was mainly due to higher line of credit usage as companies grew their accounts receivable and inventories associated with increased sales.
Construction equipment financing decreased $24.43 million or 8.55% in 2011 compared to 2010. Construction equipment financing at December 31, 2011 had outstandings of $261.20 million, compared to outstandings of $285.63 million at December 31, 2010. The decrease in this category was primarily due to a continued slowness in construction related activity and overall slowness in the sales of both new and used construction equipment.
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1st Source Corp. has a market cap of $596.6 million; its shares were traded at around $25.97 with a P/E ratio of 12.6 and P/S ratio of 2.2. The dividend yield of 1st Source Corp. stocks is 2.6%. 1st Source Corp. had an annual average earning growth of 6.2% over the past 10 years.
Highlight of Business Operations:
Dividends paid on common stock in 2011 amounted to $0.64 per share, compared to $0.61 per share in 2010, and $0.59 per share in 2009. The level of earnings reinvested and dividend payouts are determined by the Board of Directors based on managements assessment of future growth opportunities and the level of capital necessary to support them.Net interest margin (the ratio of net interest income to average earning assets) is significantly affected by movements in interest rates and changes in the mix of earning assets and the liabilities that fund those assets. Net interest margin on a fully taxable equivalent basis was 3.69% in 2011 compared to 3.59% in 2010, and 3.14% in 2009. The higher margin in 2011 reflects the decline in funding costs. Net interest income was $148.40 million for 2011, compared to $147.50 million for 2010. Tax-equivalent net interest income totaled $150.91 million for 2011, relatively flat from the $150.87 million reported for 2010.
Income Taxes 1st Source recognized income tax expense in 2011 of $25.59 million, compared to $19.23 million in 2010, and $6.03 million in 2009. The effective tax rate in 2011 was 34.69% compared to 31.80% in 2010, and 19.13% in 2009. The effective tax rate was higher in 2011 compared to 2010 due to a decrease in tax-exempt interest in relation to income before taxes. Additionally, during the first quarter of 2011 we reached a state tax settlement for the 2008 year and as a result recorded a reduction of unrecognized tax benefit in the amount of $0.84 million that affected the effective tax rate and increased earnings in the amount of $0.47 million. The effective tax rate was lower in 2009 compared to 2011 and 2010 due to a one time benefit of $2.60 million and an increase in tax-exempt interest in relation to income before taxes. The 2009 benefit was the result of a reduction in our tax contingency reserve due to the resolution of tax audits. For a detailed analysis of 1st Sources income taxes see Part II, Item 8, Financial Statements and Supplementary Data Note 17 of the Notes to Consolidated Financial Statements.
Commercial and agricultural lending, excluding those loans secured by real estate, increased $15.34 million or 2.89% in 2011 over 2010. Commercial and agricultural lending outstandings were $545.57 million and $530.23 million at December 31, 2011 and December 31, 2010, respectively. This increase was mainly due to higher line of credit usage as companies grew their accounts receivable and inventories associated with increased sales.
Construction equipment financing decreased $24.43 million or 8.55% in 2011 compared to 2010. Construction equipment financing at December 31, 2011 had outstandings of $261.20 million, compared to outstandings of $285.63 million at December 31, 2010. The decrease in this category was primarily due to a continued slowness in construction related activity and overall slowness in the sales of both new and used construction equipment.
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