Slide 1: Investor Presentation
Source. | :Corporation 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-looking statements.” Generally, words such as “believe,” “possible,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” “contemplate,” “seek,” “plan,” “assume,” “targeted,
Slide 3: 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
Slide 4: Corporate Overview
CORPORATE OVERVIEW $5.0 billion Community Bank with International Reach Community Banking: = Personal and business banking, payment services, lending, mortgage, and leasing = Investment management, trust and estate planning, and retirement planning services = Business and consumer insurance sales Sp
Slide 5: Market Area
MARKET AREA Specialty Finance Community Bank Loans: $1.8 billion Loans: $1.9 billion
Slide 6: Business Mix (Loans and Leases)
BUSINESS MIX (LOANS AND LEASES) Personal Community Banking 31% 51% Business - Community Banking 69% Specialty Finance 49% As of 6/30/15
Slide 7: Community Banking
COMMUNITY BANKING = 81 Banking Centers = 101 Twenty-four hour ATMs = 8 1st Source Insurance offices = 8 Trust & Wealth Management locations with approximately $4.0 billion of assets under management In person, online, over the phone or via mobile
Slide 8: Community Banking Market Area — County Market
COMMUNITY BANKING MARKET AREA 17 — County Market Market Households 788,652 Client Households 99,897 =—_ Penetration 127% Higher Education Businesses (approx) 74,600 Business Clients 14,545 Penetration 19.5% As of December 31, 2014 i z= Regional Medical Hub Medical Devices 1h ay He Recreational Vehic
Slide 9: Specialty Finance Group Services
SPECIALTY FINANCE GROUP SERVICES Aircraft Financing — $725MM Aircraft financing primarily for new and used general aviation aircraft (including helicopters) for private and corporate users, some for aircraft distributors and dealers, air charter operators, air cargo carriers, and other aircraft oper
Slide 10: Experienced and Proven Team
EXPERIENCED AND PROVEN TEAM Executive Team ™ 7 executives with an average 37 years each of banking experience and 24 years with 1st Source Business Banking Officers ™ 39 business banking officers with an average 23 years each of lending experience and 12 years with 1st Source Specialty Finance Group
Slide 11: Performance - Client
PERFORMANCE - CLIENT #1 deposit share in our 15 contiguous county market #1 SBA Lender in every county where located #2 SBA Lender in State of Indiana SBA Great Lakes Community Lender of the Year — 2014 Indiana SBA Community Lender Award — 2014 Best Bank for Business — Northwest Indiana Business Qua
Slide 12: Financial Results
FINANCIAL RESULTS
Slide 13: Net Income & Earnings Per Share
NET INCOME & EARNINGS PER SHARE* ($MM) $60 same | pate $3.50 $50 $3.00 $40 $2.50 ean 28.13 29.14 "| $2.00 $1.50 20 $1.00 $10 $0.50 $0 $0.00 2010 2011 2012 2013 2014 2014 2015 YTD YTD = Net Income —@— EPCS (Diluted) * Note: EPCS adjusted for 10% stock dividend declared July 22, 2015.
Slide 14: Net Interest Margin (FTE)
NET INTEREST MARGIN (FTE) Maintained Net Interest Margin 2010 2011 2012 2013 2014 2014 2015 YTD YTD «Net Interest Income ($MM) —®— Net Interest Margin (%) PAGE FOURTEEN
Slide 15: Strong Credit Quality
STRONG CREDIT QUALITY % of Net Loans and Leases —@ Loan & Lease Loss Reserve == Nonperforming Assets —@= Net Charge-Offs/(Recoveries)* 35 3.0 2.5) 2.0 1.5 1.0 0.5 0.0 (0.5) (1.0) 2010 2011 2012 2013 * Note: 2015 YTD ‘harge- Source. _ i Corporation PAGE FIFTEEN
Slide 16: Strong Capital Position
STRONG CAPITAL POSITION Common Equity Tier 1/Risk-Weighted Assets = 12.72%; “Well Capitalized” = 6.50% —@ Total Risk-Based Capital/Risk-Weighted Assets —l- Tier 1 L Ratio “@= Tangible C 10% = "Well Capitalized” 5% = "Well Capitalized” 20.0% 16.51% 15.34% e 15.57% 15.86% 15.89% 15.36% 12.37% 11.72% 1
Slide 17: Tangible Book Value Per Common Share
TANGIBLE BOOK VALUE PER COMMON SHARE* Consistent Growth ~ $13.65 2008 2009 2010 2011 2012 2013 2014 * Note: Adjusted for 10% stock dividend declared July 22, 2015. 2015 YTD PAGE SEVENTEEN
Slide 18: Comparison of Five Year Cumulative Total Return
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* 1st Source Growth of 146% vs. Peer Group Growth of 95% —@> Ist Source NASDAQ Index —@ Peer Group 2009 2010 2011 2012 2013 2014 es in De 31, 2009, in group index. Total return assumes reinvestment of dividends. Source. _ i Corporation PAGE EIGHTEEN
Slide 19: Performance - Financial
PERFORMANCE - FINANCIAL = Honor Roll of Bank Superior Performers for 10 Years — KBW, 2012-2015 @ #8 of 93 banks — Bank Director Magazine = #25 — Forbes list of America’s Best Banks based on asset quality, capital adequacy and profitability = Top 31 Performing Banks in U.S. - Sandler O'Neill All Star
Slide 20: Investment Considerations
INVESTMENT CONSIDERATIONS = Consistent and superior financial performance with a focus on long-term earnings per share and tangible book value growth = Experienced and proven team with significant investment in bank = Diversification of product mix and geography with asset generation capability @ Le
Slide 21: Contact Information
CONTACT INFORMATION Christopher J. Murphy Ill Chairman of the Board and CEO (574) 235-2711 Murphy-C@1stsource.com Andrea G. Short CFO and Treasurer (574) 235-2348 ShortA@1stsource.com
Slide 22: Appendix
APPENDIX PAGE TWENTY TWO
Slide 23: Deposit Composition
DEPOSIT COMPOSITION Deposits By Type (6/30/15) Total Average Deposits ($MM) Deposits —@— Effective Rate on Deposits (%) 3872 4000 3778 3605 3555 3574 3701 Noninterest B fearing Checking 21% 2010 «2011 «2012 2013 «2014 «=. 2015 YTD 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00%
Slide 24: Deposit Market Share - Contiguous Market
DEPOSIT MARKET SHARE - 15 CONTIGUOUS MARKET* Leading Market Share in Community Banking Markets ($000) —@ 1stSource —t- Chase He Wells Fargo A Lake City Bank — Tc He Fifth Third —A— PNC Data as of June 2014-FDIC (via Bancography) June08 June0? June 10 June 11. June 12. June 13. June 14 “Includes Alle
Slide 25: Loan Distribution and Performance
LOAN DISTRIBUTION AND PERFORMANCE Loans by Type (6/30/15) Total Average Loans & Leases ($MM) ‘ Loans & Leases —@— Yield on Loans & Leases (%) SRA Medion and 1a yay dre 3737 3750 9h poe 10.00% ) il oS 3110 3079 san? 9.00% 8.00% 2500 ~ 7.00% -@ F. 6.00% 1875 469 [442 4.43 | 5 00% 4.00% 1250 aa 625 2.0
Slide 26: Diverse Sources of Noninterest Income
DIVERSE SOURCES OF NONINTEREST INCOME Noninterest Income Composition YTD 12/31/14 = $77.9M provide a YTD 6/30/15 = $41.3M nal diversification
Slide 27: Noninterest Expense
NONINTEREST EXPENSE Noninterest Expense Composition YTD 12/31/14 = $150.0M YTD 6/30/15 = $76.3M
Slide 28: Common Dividends Per Share
COMMON DIVIDENDS PER SHARE* 27 YEARS OF CONSECUTIVE DIVIDEND GROWTH $0.900 $0.800 $0.700 $0.645 $0.618 0.582 $0600 $0.600 $0.500 wae $0.409 $0509 $0527 $0.536 ene é $0.491 $0.400 $0.300 $0.200 $0.100 $0.000 2005 2006 +=—2007-«« 2008 )=S 2009 2010 2011. 2012 2013S 2014-2015 YTD * Note: Adjusted for 1
Slide 29: Performance Recognition
PERFORMANCE RECOGNITION Northwest Indiana | Business Quarterly Magazine Recognized as nanicra ‘Best Bank for Business, and 5 Star “Superior: Rating ‘Best Bank for Obtaining a Business Highest rating possible. Based on capita ratio, ‘oan’ in Michiana profitability/loss trend, credit quality and CRA r