1st Source Corporation 10-K Summary (Year Ended Dec 31, 1995)
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1995, for 1st Source Corporation, an Indiana-based bank holding company. The Company's principal subsidiary, 1st Source Bank, is the largest bank in its principal market area of northern Indiana. The Company operates through four primary groups: Corporate Banking, Personal and Small Business Banking, Transportation and Equipment Financing (T&E), and Trust and Investment Management. In September 1995, 1st Source Bank of Starke County was merged into 1st Source Bank.
Key Financial Metrics
| Metric | 1995 Value | Notes |
|---|---|---|
| Total Assets | $1.80 billion | Reported in Item 1 |
| Total Deposits | $1.44 billion | Reported in Item 1 |
| Total Shareholders' Equity | $152.6 million | Reported in Item 1 |
| Net Interest Income | $73.975 million | Derived from Selected Statistical Information |
| Net Yield on Earning Assets | 4.71% | Taxable equivalent basis |
| Return on Average Equity | 14.75% | Year ended Dec 31, 1995 |
| Return on Average Assets | 1.25% | Year ended Dec 31, 1995 |
| Reserve for Loan Losses | $27.47 million | 2.18% of net loans outstanding |
| Net Charge-offs | $(0.845) million | Net recoveries of $845,000 |
| Short-term Borrowings | $135.373 million | Average balance |
| Long-term Debt | $23.302 million | Average balance |
Material Changes vs. Prior Period
- Asset Growth: Total assets increased from $1.55 billion in 1994 to $1.80 billion in 1995.
- Loan Portfolio: Total domestic loans grew to $1.26 billion in 1995 from $1.10 billion in 1994. Transportation and equipment loans increased significantly to $458 million (36.4% of total loans).
- Interest Rates: The average yield on earning assets decreased slightly to 8.85% from 8.13% in 1994, while the cost of interest-bearing liabilities increased to 4.85% from 3.87%.
- Net Interest Income: Increased by $5.004 million to $73.975 million, driven primarily by volume increases in loans and securities, partially offset by higher interest rates paid on liabilities.
- Loan Quality: The Company recorded net recoveries of $845,000 in 1995, compared to net charge-offs of $1.237 million in 1994. Nonaccrual loans increased to $4.893 million from $3.314 million.
- FDIC Assessment: The FDIC relaxed the premium assessment for 1st Source Bank to 4 cents per $100 of deposits in 1995, down from 23 cents in prior periods.
Outlook, Risks, and Management Commentary
- Regulatory Environment: The Company notes a massive increase in paperwork and time expenditure due to the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). New legislation effective in 1997 will permit nationwide branching and acquisitions, potentially increasing competition.
- Competition: The market is highly competitive with other banks, savings and loans, and non-bank financial institutions. Out-of-state banking organizations are expanding into the Company's principal market area.
- Loan Concentrations: Significant concentrations exist in air transportation/aircraft dealers (15.1% of business loans) and truck/automobile leasing (12.1% of business loans).
- Impaired Loans: As of December 31, 1995, impaired loans totaled $6.381 million. The adoption of SFAS No. 114 had no impact on the 1995 provision for loan losses.
- Management Commentary: Specific guidance or forward-looking financial projections for future periods are not provided in the text of this filing; the Management's Discussion and Analysis is incorporated by reference from the annual shareholder report.
Investor Verification Checklist
- Net Income: The filing text does not provide a clear value for Net Income; it only provides Return on Equity (14.75%) and Return on Assets (1.25%). Investors should verify the exact Net Income figure in the incorporated Annual Shareholder Report.
- Cash Flow: Specific operating, investing, and financing cash flow figures are not detailed in the text; verification is required in the incorporated Consolidated Statements of Cash Flows.
- Dividend Payout: The dividend payout ratio is listed as 17.43% of net income, but the specific dollar amount per share is not stated in the text.
- Stock Price: Common stock price data is incorporated by reference and not listed in the text.
- Impaired Loan Details: Verify the specific collateral values and recovery prospects for the $6.381 million in impaired loans, particularly within the transportation and equipment sector.