Slide 1: 1st Source Corporation Investor Presentation
iSource. _ Corporation Investor Presentation
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: Non-GAAP Financial Disclaimer
Non-GAAP Financial Disclaimer This presentation contains financial information determined by methods other than those prescribed by accounting principles generally accepted in the United States ("GAAP’). Management uses these "non-GAAP" financial measures in its analysis of the Company's capital and
Slide 4: 1st Source Corporation
1st Source Corporation = $4.6 billion bank holding company = Headquartered in South Bend, IN, serving Northen Indiana and Southwest Michigan = Celebrating 150 years, with a history dating to 1863 = Diversified business model, offering personal and business banking, specialty finance, investment mana
Slide 5: Seasoned Leadership Team
Seasoned Leadership Team Name Position SRCE Experience Years Experience Chairman of the Board President and Chief Executive Christopher J. Murphy Ill Oficer (elected to Board of Directors oF ‘40: in 1972) James R. Seitz President, 1st Source Bank 33 38 ’ Executive VP John B. Griffith Secretary & Gen
Slide 6: Community Banking Market Area
Community Banking Market Area ‘Bigcnire 17 - County Market Market Households 175,150 Clients 98,360 Penetration 12.1% Businesses 78,962 Business Clients 16,018 Penetration 20.3% ‘sof June20, 2012 Retail Footprint Industry Focus = Higher education = Durable goods manufacturin = RV & manufactured hous
Slide 7: Deposit Franchise
Deposit Franchise Cost of Total Deposits (%) = Focus on Core: 85% of total deposits 094% 9 91% 1.00% iar ~ Provides primary relationship — Reduces cost and volatility of deposits a) = Effectively managing the cost of deposits, which 0.50% declined to 0.50% for the quarter ended March 31, 2013 n2ee a
Slide 8: Recognized Community Banking Leadership
Recognized Community Banking Leadership v Best Bank - Elkhart County - #1 Bank - Selected #1 in the region by the readers of the Elkhart Truth v Favorite Bank of Southwestern Michigan - Selected by the readers of Leader publications — Cass, Niles, Edwardsburg, Dowagiac, etc. v Best Bank for Customer
Slide 9: Total Loans = $3.4B
Total Loans = $3.4B Business Community Banking $1.28 Personal Community Banking $0.68 11% Specialty Finance = $1.6B Medium and heavy duty truck $167™, 10% Autollight truck rental and environmental ‘equipment ‘$450M 2%
Slide 10: Specialty Finance Group Services
Specialty Finance Group Services ¥ Aircraft Financing ($699M) = Aircraft financing consists of financings for new and used general aviation aircraft (including helicopters) for private and corporate aircraft users, aircraft distributors and dealers, air charter operators, air cargo ‘carriers, and ot
Slide 11: Loan Portfolio
Loan Portfolio Loans By Type (3/31/13) NPLs( By Type (3/31/13) Total Loans = $3.4B Total NPLs‘") = $43.0M Medium and heavy duty ‘truck M Consumer ren Residentiatreal | AUtofight truck pers rental and. % a ‘environmental ‘Commercial "and agricutural loans Autolight truck: as rental and ‘environmental
Slide 12: Net Interest Income and Net Interest Margin
$45.0 3.90% $400) 371% 3.70% Aue 3.80% $35.0 3.70% — x $30.0 3.60% iz 25.0 350% & . = $20.0 3.40% B S $15.0 3.30% & 3 $10.0 3.20% = $5.0 3.10% $37.6 $38.2 $37.2 $37.9 $879 $38.5 $38.4 $39.0 $38.2 $0.0 4 : + + 3.00% Qt G21 Bt At att2 22 a2 aaa a1 Net Interest Income (FTE) | ——Net Interest Margin
Slide 13: Diverse Sources of Noninterest Income
Diverse Sources of Noninterest Income Noninterest Income/Total Revenue 40% 35% 30% 25% 20% 15% 10% 5% 0% Noninterestincome continues to be a stable and significant source of revenue Trust ($3.4B of AUM)\”) and equipment rental income continues to drive solid quarterly revenue Insurance business also
Slide 14: Credit Quality
Credit Quality = $100 > 250% 2 Bs 1.76% 4.79% | 200% & 2 150% 3 A aa 1.00% = 5 as 050% & a 3 90 0.00% Qi 21 31 41 T2212, 312) 42 = 13 "= NonperformingAssets +——NPAs/ Assets Selected Credit Metrics Qt Q211 O31 Ast Qi42 Q242 Q312 Qs42 Qit3 NPLs /Loans 244% 2.09% 2.02% 1.84% 1.76% 1.41% 1.32% 111% 1.27
Slide 15: Pre-tax, Pre-provision Net Income and ROAA
$25.0 250% $20.0 2.00% $15.0 | are oe 1.50% $10.0 - 1.00% $50 0.50% soo _ esinan _Tete Ties sia $19.5 $212 ss, $193 ae Qi = 21 8141 t2 242, 312) 42 = 113. PTPP Netincome 9——PTPPROAA Note: PTPPnetincome is 2 non-GAAP fnandal measur andi clot a pre-taxnet income pls provision for lan losses less realz
Slide 16: 2003 ©2004 «= 2005 2006) 2007S 2008 «9S 2009 2010 2011. 2012, N13
2003 ©2004 «= 2005 2006) 2007S 2008 «9S 2009 2010 2011. 2012, N13 Ann.
Slide 17: Capital Ratios
10.18% 10.56% 10.76% 10.0% 9.12% 8.28% 8.43% 00% 2008 2009 | 9.62% 0.0% —_ 2008 2009 2010 2010 2011 2012 Q1"13 12.59% 12.66% 12.86% 10.82% 147% 2011 2012 Q113 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 20.0% 15.0% 10.0% 5.0% 0.0% Az Te N72% 147% 1.73% “10.16% 108% 2008 2009 «2010 2011 «2012 ai43 172
Slide 18: Ownership Summary
Ownership Summary nership Summary Shareholder Type Shares % of Total Ast Source Bank 7,417,081 29.2% Other Institutional 7,403,643 29.2% Retail/Other 6,196,569 24.3% Insiders 3,009,104 11.9% ‘Ast Source ESOP 1,368,994 5.4% Rank institution (Top 10 Institutions) Shares % of Total +. Dimensional Fund
Slide 19: Historical Financial Highlights
Historical Financial Highlights MO FY 2014 FY 2012FO1 202FO2 2012F@ 212FO4_219F 1231012817 a2 GAD SGU IHIAD 304 Tat Assets ‘445261 4274071 4.560603 420489 4486584 4406210 4560,003 4255028 Total Goss Loars 310322 3102187 2.228422 3166004 228829 2201208 2308.32 [2:625=|/ |= Growing Loans Total Deposit
Slide 20: Performance Recognition
Performance Recognition Forbes 2013, SESTBANKS Forbes 2013- Best Banks of America Recognized as number 25 on the Forbes list in its annual review of the nation’s 100 largest publically traded financial institutions. Metrics included profitability, ROE, net interest margin, asset quality and capital
Slide 21: Delivering Returns to Shareholders
Delivering Returns to Shareholders (Total Return) 80% 60% 40% 20% + 1408 1409 6/14/10 engin 6/14/12 en4it3 ——SRCE_ —=SNL Bank ‘Source! SNL Financial as of June 14,2012, Note: Totalrtum definedas stock appresaton/ depreciation plus dividends reseed,
Slide 22: Investment Considerations
Investment Considerations v v v v Consistent and superior financial performance Comprehensive portfolio of products drives loan and revenue growth Diversification of product mix and geography with asset generation capability Leading market share in community banking markets Stable credit quality, st