Third Quarter 2015

November 15, 2015



We are excited to report a record third quarter net income, the largest quarterly earnings recorded in our Company’s history. Our investment in growth and people continues to fuel the significant increase in earnings during 2015.

Highlights of the quarter include:

  • Cash Dividend – A dividend was declared of $.17 per share payable to shareholders of record November 15, 2015, our 49th consecutive dividend.
  • Earnings – Third quarter earnings were $1.2 million, up $189,000 or 19% as compared to the third quarter of 2014. Year to date earnings for 2015 were $3.0 million, up $1 million or 50% as compared to the same period in 2014.
  • Credit Quality - Our credit quality continues to be better than most of our peers. With Non Performing Assets at 0.57%, the lowest level in over 4 years, our significant loan growth has occurred without compromising credit quality.
  • Business of the Year Award - The Southwest Indiana Chamber of Commerce awarded First Security with the 2015 Small Business of the Year Award. We are proud of Steve Witting, President of the Evansville Market, his staff, and the many other associates who help make First Security successful.

Our year to date 2015 earnings reflects a record net income during the first nine months of any year during our Company’s history, continuing the momentum gained during the first half of 2015. Our third quarter earnings of $1.2 million provided a new record, reflecting the highest net income ever posted during any quarter of any year during the Company’s history. With net income of $3.0 million during the first nine months of 2015, the Company has almost surpassed the total net income of $3.1 million reported for all of 2014.

Our third quarter 2015 financial report of First Security is enclosed. Financial highlights for the third quarter are compared to the prior years third quarter.

  • Assets at quarter end total $580 million, representing an increase of 9%
  • Loans and Deposits - Loans increased 13%, while deposits increased 10%

  • Tangible Book Value ncreased $1.55 or 7%

  • Net Income increased $189,000 or 19%
  • Provision for Loan Losses increased $15,000 or 4%
  • Net Interest Income increased $684,000 or 16%
  • Net Interest Margin increased from 3.50% to 3.68%, an increase of 18 points
  • Non-Interest Income declined $72,000 or 6%

  • Non-Interest Expense increased $297,000 or 8%

  • Efficiency Ratio declined to 65.6% as compared to 67.4%. This ratio indicates how much in expense occurred during the period for every $1 of revenue produced by the Company.

  • Non-Performing Assets to total assets were 0.57% at the end of September 2015, an improvement of 0.27% from the prior year’s ratio of 0.84%.

  • Return on Assets improved from 0.75% to 0.81%

  • Basic Earnings-Per-Share were $0.49 per share as compared to $0.44 per share, up 11%.

With strong capital and good earnings, we believe we are building a franchise that positions us well for many years to come. Ensuring that we utilize our capital well is very critical and important. We are keenly focused on balancing our investments while still providing solid, long-term returns for our shareholders.

As always, please feel free to contact us should you have any questions, suggestions, or comments. We welcome any opportunity to provide you with banking products and services to meet your needs.

With this shareholder letter, I am also announcing my retirement effective December 31, 2015, as reflected in the enclosed press release. It has been a pleasure working with the staff at First Security for the past 9 years. After spending over 40 years in banking I am looking forward to spending some quality time with my family, friends, and others in the next chapter of my life. I have been truly blessed in working in an industry in which I looked forward to coming to work nearly every single day of my career. Thanks for your investment in me and my team.



M. Lynn Cooper                                                                                 James T. “Tab” Quisenberry

President and CEO                                                                            Chairman of the Board



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