Slide 1: Second Quarter 2016 Investor Presentation
Source. | :Corporation SECOND QUARTER 2016 INVESTOR PRESENTATION Symbol: SRCE www. |stsource.com
Slide 2: Forward-Looking Statement Disclosure
FORWARD-LOOKING STATEMENT DISCLOSURE Except for historical information, the matters discussed may include “forward- fooking statements." Generally, words such as “believe,” “possible,” expect, " “intend,” “estimate,” , 'seek,” lan," “assume,” “targeted,” “continue,” “remain,” “should,” “indicate,” “
Slide 3: Corporate Overview
CORPORATE OVERVIEW $5.4 billion Community Bank with a business focus and a service model designed to be highly responsive to all of our clients - individuals, busi local g mand nas Community Banking: = Locations throughout Northern Indiana and Southwestern Michigan = Personal and business banking, p
Slide 4: Mission and Vision
MISSION AND VISION Mission To help our clients achieve security, build wealth and realize their dreams by offering straight talk, sound advice and keeping their best interests in mind for the long-term. Vision Offer our clients the highest-quality service Support a proud family of colleagues who per
Slide 5: Market Area
MARKET AREA Specialty Finance y Community Bank Loans: $2.14 billion Loans: $2.13 billion
Slide 6: Business Mix (Loans and Leases)
BUSINESS MIX (LOANS AND LEASES) Personal Community Banking 30% 50% Business Community Banking 70% Specialty Finance 50% :Corporation
Slide 7: Community Banking
COMMUNITY BANKING 80 Banking Centers 101 Twenty-four hour ATMs 10 1st Source Insurance offices 8 Trust & Wealth Management locations with approximately $4 billion of assets under management CO) In person Online Over the phone Mobile
Slide 8: Community Banking Market Area
COMMUNITY BANKING MARKET AREA Households Client Households Penetration Businesses (approx) Business Clients Penetration As of December 31, 2015 Medical Devices Ss 17 - County Market 794,417 100,978 12.7% 74,600 14,761 19.8% Recreational Vehicle Manufacturing
Slide 9: Specialty Finance Group Services
SPECIALTY FINANCE GROUP SERVICES ae Aircraft Division— $823MM Mech division provides financing primarily for new and used general aviation aircraft (including helicopters) for private and eas users, some ii eeiet distributors and dealers, air charter operators, air cargo rs, and other aircraft opera
Slide 10: Experienced and Proven Team
EXPERIENCED AND PROVEN TEAM Executive Team mu 6 executives with an average 37 years each of banking experience and 24 years with Ist Source Business Banking Officers = 37 business banking officers with an average 21 years each of lending experience and 11 years with Ist Source Specialty Finance Grou
Slide 11: Performance - Client
PERFORMANCE - CLIENT = #1 deposit share in our 15 contiguous county market = #1 SBA Lender in every county where located m #2SBA Lenderin State of . Indiana i =o Best Branch Service in the Midwest — MSR Group. Indiana SBA Community Lender Award — 2013 - 2015 Michiana's Best Bank for Business — North
Slide 12: Financial Review
FINANCIAL REVIEW
Slide 13: Growing Loan Portfolio
GROWING LOAN PORTFOLIO Total Average Loans & Leases ($MM) Loans & Leases ®Yield on Loans & Leases (%) 2012 2013 2014 2015 2016 YTD 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00%
Slide 14: Diversified Loan Portfolio
DIVERSIFIED LOAN PORTFOLIO Average Loans By Type Commercial Commercial and Real Estate Agricultural Residential Real 1% Aircraft 19% Consumer 4% Medium and Heavy Construction ie Equipment Auto and Light Truck 1%
Slide 15: Strong Credit Quality
STRONG CREDIT QUALITY Loan & Lease Loss Reserve % of Net Loans and Leases Nonperforming Assets Net Charge-Offs / (Recoveries) 2.64% Stable Reserves Improving Credit Quality Limited Losses 2.50% 2.35% 2.31% 2.21% 2.20% ad 1.25%, 1.29% 1.13% 0.50% 0.49% 0.27% 0.13% 9 oe, 0.06% (0.02%X0.02%) 2011 2012
Slide 16: Growing Core Deposit Franchise
GROWING CORE DEPOSIT FRANCHISE Total Average Deposits ($MM) mmNon-core Deposits ss Core Deposits Effective Rate on Interest-bearing Deposits (%) 5500 1.50% ~ 1.30% Compound Annual Growts 2012 2013 2014 *Non-core deposits include CDs over $250,000 and brokered CDs. [st pect A PAGE 16 Corporation 2
Slide 17: Deposit Market Share - County Contiguous Market
DEPOSIT MARKET SHARE - 15 COUNTY CONTIGUOUS MARKET* Leading Market Share in Community Banking Markets ($000) -® Ist Source Chase Lake City Bank Wells Fargo Fifth Third -m@-PNC Data as of June 2015 - FDIC (Via SNL Financial) < June0? June10 June 11. June 12. June 13. June 14 June 15 “Includes Allen,
Slide 18: Net Income & Earnings Per Share
NET INCOME & EARNINGS PER SHARE* 2012 2013 2014 2015 2015 YTD “=2Net Income <®EPCS (Diluted) d for 10% ivi July 22, i ugust 14, 2015. EB Facion
Slide 19: Net Interest Margin (FTE)
NET INTEREST MARGIN (FTE) 153.8 158.6 162.2 168.2 2011 2012 2013 2014 2015 2015 2016 YTD YTD ==.Net Interest Income ($MM) = <®=Net Interest Margin (%) eeCrporation
Slide 20: Diverse Sources of Noninterest Income
DIVERSE SOURCES OF NONINTEREST INCOME Noninterest Income Composition YTD = $33.4M* Equipment Rental &% Twst and Wealth ‘Management 29% surance ‘Commissions 8% Service Charges on Deposit Accounts 13% Debit Card 16% 29% of Total Revenue* PAGE 20
Slide 21: Operating Expenses
OPERATING EXPENSES 136.3 136.3 136.1 2011 2012 2013 2014 2015 2015 2016 YTD YTD “=Noninterest Expense ($MM)* Efficiency (%) * Note: N 3 of pr eeCrporation
Slide 22: Strong Capital Position
5% Well Copitatized 10% Well Copitalized STRONG CAPITAL POSITION 15.21% 14.26% 14.54% 14.87% 43 p59, 13 ag, 11.72% 1.47% 12.08% 12.16% 12.21% 11.99% 2011 2012-2013 2014-2015 2016YTD = 2011-2012. 2013-2014. «20152016 YID 16.51% 15.57% 15.86% 15.89% aor, sa 7am 10.19% 10.56% 10.76% 1.15% 10.96% 10.90%
Slide 23: Tangible Book Value Per Common Share
TANGIBLE BOOK VALUE PER COMMON SHARE* Consistent Growth 2009 =2010 2011 2012 «2013 2014. 2015-2016 YTD * Note: Adjusted for 1 eeCrporation
Slide 24: Common Dividends Per Share
$0.900 $0.800 $0.700 $0.600 $0.500 $0.400 $0.300 $0.200 $0.100 $0.000 COMMON DIVIDENDS PER SHARE* 28 YEARS OF CONSECUTIVE DIVIDEND GROWTH -A3I% Annual Growth Rate: 43 ar 0.600 9618 0.582 0509 0527 (0.536 0.555 0.482 2006 =2007 «2008 )3=— 2009S 2010. 2011_—Ss 2012. 2013'S 2014 * Adjusted for 10% stoc
Slide 25: Delivering Returns to Shareholders
DELIVERING RETURNS TO SHAREHOLDERS $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Value of $100 Invested in Ist Source since 1971 Inception with Dividends Reinvested vs. Total Return of Stock Indices —lIst Source —S&P 500 —Wilshire 5000 —Russell 2000 -—-NASDAQ eeerporation
Slide 26: Delivering Returns to Shareholders
DELIVERING RETURNS TO SHAREHOLDERS & @ D c fe] ‘c oO @ 2 < December 31, 2007 - August 31, 2016 — Ist Source Corp —KBW NASDAG Bank ——NASDAQ Bank ——S&P 500 Bank —SNL U.S. Bank —KBW NASDAQ Regional Bank 2009 2010 2011 2013 eeerporation
Slide 27: Performance - Financial
PERFORMANCE - FINANCIAL = #10 of 102 banks between $5 billion and $50 billion in assets — Bank Performance Scorecard by Bank Director Magazine = Top 15th Percentile of Community Banks — Seifried & Brew a 5 Star “Superior” Rating — Baver Financial = 28 years of consecutive dividend growth
Slide 28: Investment Considerations
INVESTMENT CONSIDERATIONS Consistent and superior financial performance with a focus on long-term earnings per share and tangible book value growth Experienced and proven team with significant investment in bank Diversification of product mix and geography with asset generation capability Leading ma
Slide 29: Contact Information
CONTACT INFORMATION Christopher J. Murphy III Chairman of the Board and CEO. (574) 235-2711 murphy-c@1stsource.com Andrea G. Short CFO and Treasurer (574) 235-2348 shorta@1stsource.com
Slide 30: Appendix
APPENDIX
Slide 31: Ownership Summary
Ownership Summary Shareholder Type Shares % of Total Ist Source ESOP Institutional 9,769,802 37.8% 5.2% Insiders 9,027,199 34.9% Retail/Other Institutional a 22.1% 37.8% Retail/Other 5,727,662 22.1% Ist Source ESOP 1,342,430 5.2% Total Shares Outstanding”) 25,867,093 100.0% Rank Institution (Top 10
Slide 32: Aircraft Portfolio — Industries by NAICS
Aircraft Portfolio — Industries by NAICS Retail Trade Conatrgetion 12% To Manufacturing 6% Ag, Forestry, Fishing & Hunting 5% Services 15% Wholesale Trade 5% Other* 1% Finance & Insurance and Real Transportation & rehousing 18% 20% *Other includes: Mining & Utilities, Information, & Public Administr
Slide 33: Attractive Core Deposit Franchise
ATTRACTIVE CORE DEPOSIT FRANCHISE Average Deposits By Type Noninterest Bearing Demand 22% Savings and Interest ing Demand CD and IRA 28%