1st Source (SRCE) Q4 2017 earnings summary

Executive summary

• Record 2017 net income of $68.05 million and diluted EPS of $2.60; excluding special activities, net profit was $65.23 million and $2.50 per share.

• Growth in net interest income and noninterest income drove results, partly offset by higher credit provisions and operating costs.

Financial highlights

• Net interest income rose 9.4% to $185.63 million; noninterest income increased 11.0% to $98.71 million.

• Provision for loan and lease losses was $8.98 million, up from $5.83 million; noninterest expense increased 6.3% to $173.997 million.

• Year-end assets rose 7.3% to $5.89 billion; loans and leases increased 8.1% to $4.53 billion, and deposits grew 9.7% to $4.75 billion.

• Q4 net income was $17.99 million, versus $15.23 million YoY; diluted EPS was $0.69 versus $0.58.

Outlook and guidance

• Truck industry fundamentals were expected to remain relatively stable, with the industry positioned for another good year in 2018; modest growth was projected for new business jets.

• Business banking outlook was guardedly optimistic; agricultural conditions remained challenging, with little improvement in farm income anticipated for 2018.

• InSight client relationship management work would continue into 2018–2019; further cybersecurity and banking-center bandwidth investments were planned for 2018.