Slide 1: 1st Source Corporation
Source. | :Corporation
Slide 2: Corporate Designation
Corporate Designation ● SRCE (NASDAQ Global Select Market) ● Market Cap: over $500 million
Slide 3: Forward-Looking Statement Disclosure
Forward-Looking Statement Disclosure Except for historical information contained herein, the matters discussed in this document express “forward-looking statements.” Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions indicate forwa
Slide 4: Corporate Overview
Corporate Overview ● Banking, specialty finance, leasing, investment management, trust & estate planning, insurance sales, mortgage banking ● $4.5 billion bank holding company headquartered in South Bend, Indiana
Slide 5: Mission and Vision
Mission and Vision Mission The 1st Source mission is to help our clients achieve security, build wealth and realize their dreams. Vision ● Offer our clients the highest-quality service ● Support a proud family of colleagues who personify the 1st Source spirit of partnership ● Be the financial instit
Slide 6: Banking Position
Banking Position Asset Size #205 - Top 3% (Out of 8,636 insured domestic financial institutions as of 3/31/07 - before $600 million acquisition) The Top 150 Performers #65 - 2006 Bank Performance Scorecard (Banker Directors Magazine Based on Profitability, Capital Adequacy and Asset Quality Up from
Slide 7: 1st Source Headquarters
1st Source Headquarters 1st Source Center, South Bend, Indiana
Slide 8: Indiana University School of Medicine
yy —_——— INDIANA UNIVERSITY SCHOOL OF MEDICINE SOUTH BEND. Uriveniiyof Note Date NOTRE DAME UW TVIETRIST
Slide 9: Industry
Industry Steel production Medical devices Tire production Recreational vehicle manufacturing Distribution hub
Slide 10: Agriculture
Agriculture Ethanol production
Slide 11: Memorial Hospital & Health System
Memorial Hospital & Health System (uaa
Slide 12: Business Mix
Business Mix 6/30/07 Local/Personal $532 million Regional/Business $1025 million National / Specialty Finance $1617 million
Slide 13: Traditional 15-County Market
Traditional 15-County Market *FINA clients included 2007 Market Data* Businesses: 62,717 Clients: 16,855 Penetration: 26.8% Households: 605,634 Client HHs: 129,277 Penetration: 21.3% 2006 FDIC Deposits (000) Market: $24,004,589 1st Source: $ 3,341,942 Share: 13.8%
Slide 14: Expanded 17-County Market
Expanded 17-County Market Recently opened offices in Kalamazoo (11/06) and Lafayette (6/07) Market Data Businesses: 79,205 Households: 725,440
Slide 15: Counties
15 Counties $(000) 8.6% 5.3% 6.8% 6.5% 5.2% Data as of 6/2006 - Highline BranchSource * Includes FINA numbers Deposit Market Share 13.8%
Slide 16: Total Retail DDA
Total Retail DDA Number of Accounts January 2002 - June 2007 Portfolio Accounts not included FINA not included
Slide 17: Total Business DDA
Total Business DDA Number of Accounts January 2002 - June 2007 FINA not included
Slide 18: At a glance
At a glance ● #1 deposit market share in our traditional 15-county market ● #1 provider of loans for home improvement ● #1 provider of SBA loans in northwest Indiana and southwest Michigan ● #1 equity income fund performance in the USA over a 10-year period (as of 6/30/07) ● #2 market share in mortg
Slide 19: At a glance
At a glance ● Selected a Best Place to Work in Indiana by the Indiana Chamber of Commerce ● Best Employee Satisfaction and one of the Best Places to Work in Northeast Indiana according to Upstate Indiana Business Journal ● Included in “50 Great Indiana Businesses” by Indiana Business Magazine in 200
Slide 20: Balance Sheet Highlights
Balance Sheet Highlights ($ Millions) Total Assets Total Loans & Leases Total Deposits Total Common Equity Total Common Equity to Assets $3,608.5 $4,504.7 24.8% $2,615.2 $3,134.2 19.8% $2,814.6 $3,585.4 27.4% $ 352.3 $ 425.5 20.8% 9.8% 9.4% - 06/30/06 06/30/07 Change
Slide 21: 2nd Quarter Earnings Highlights
2nd Quarter Earnings Highlights Net Income EPS (Diluted) ROA ROCE Change Change 2nd Quarter Year To Date $10,277 (21.6)% 1.18% 11.71% - - (24.4)% 20,210 $ 1.18% 11.62% (17.9)% (18.2)% - - $ 0.45 0.88 $ $ 8,060 0.80% 8.16% $ 0.34 16,583 $ 0.87% 8.68% 0.72 $ (000’s)
Slide 22: Earning Assets
Earning Assets Total Earning ($MM) Investments Mortgage Loans Loans & Leases Assets Held for Sale
Slide 23: Deposits
Deposits % DDA DDA 100 CDs Other Deposits Total Deposits ($MM) 15.2 15.5 14.9 13.9 13.7 12.4 11.0 10.87 11.03
Slide 24: Loan & Lease Quality
Loan & Lease Quality (% of Loans and Leases) Rolling Four Quarter Annual Net Charge-Offs (Recoveries) Non-Performing Assets Loan & Lease Loss Reserve (.04) (.09) (.15) (.11) (.10) (.05)
Slide 25: Net Interest Income
Net Interest Income ($MM) (%)
Slide 26: Noninterest Income
6.62 3.93 1.55 3.29 7.36 4.11 3.82 3.14 ------ 7.61 4.02 2.73 3.21 7.56 4.22 1.76 3.39 7.50 4.66 3.10 3.66 7.77 5.03 4.97 3.27 ------ 7.35 5.06 1.80 3.49 ------ 7.93 5.10 0.57 3.64 8.64 5.29 1.06 3.87 Noninterest Income Trust Fees Mortgage Income Other Income Total Noninterest Income ($MM) Equipment
Slide 27: Expense Revenue
Expense Revenue Expense to Total Revenue (Excl. Gains) (%) ($MM) 40.28 44.40 43.56 42.64 46.72 49.11 45.08 44.20 48.47
Slide 28: Investment Portfolio Maturity Schedule
Investment Portfolio Maturity Schedule Cash Flow per Year (in thousands) * Does not include $240mm for FINA for 2007 *
Slide 29: Diluted Net Income per Share
Diluted Net Income per Share 0.72 1.72
Slide 30: 0.45 $0.40 aa 0.38 0-32 0.33 $0.30 + 0.28 0.21 $0.20 + $0.10 |
0.45 $0.40 aa 0.38 030 0-32 0.33 $0.30 + 0.28 023 226 0.21 $0.20 + $0.10 | $0.00 + 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 06/07 eeCrpcration
Slide 31: SIVIDNVNIS
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Slide 32: Open New Markets
Open New Markets Focused on growth - new clients and distribution outlets ● Established in Kalamazoo and Lafayette ● Identified present market growth opportunities/locations ● Launched financial planning service – Asset Advisors: retail planning service, established in 6 locations ● Added sales offi
Slide 33: Acquired First National Bank, Valparaiso
Acquired First National Bank, Valparaiso ● $600 million in assets ● 26 banking centers in Porter, LaPorte and Starke Counties, Indiana ● Completed June 2007 ● $134 million ($54 million in stock) 2010 Strategies
Slide 34: Implement Core Conversion
Implement Core Conversion Infrastructure for the long term Growth and scalability ● Currently integrating processes bank-wide ● System will provide less customization, more cross-capabilities ● Main segments were completed July 2007 ● Adds effectiveness and efficiency 2010 Strategies
Slide 35: Produce Superior Financials
Produce Superior Financials ● Developing market-based management (community bank model) ● Being opportunistic with acquisitions ● Driving toward fortress balance sheet ● Developing strategy to enter non-durable goods market ● Improving risk management of credit and interest rates ● Reducing volatili
Slide 36: 2010 Strategies: Trustcorp Mortgage Company
2010 Strategies Trustcorp Mortgage Company ● Blended into Bank (no sub-prime business) ● Focus on mortgage customers in our banking center footprint to sell full set of products
Slide 37: If you could describe all of us at 1st Source
If you could describe all of us at 1st Source with one word, that word would be “partners” ● Partners who listen ● Partners who help and guide ● Partners who add value
Slide 38: 1st Source Corporation
iSource. _ Corporation
Slide 39: 1st Source Corporation
iSource. _ Corporation