1st Source Corporation (Parent Company Only) Financial Information

12 Months Ended

Dec. 31, 2015

STATEMENTS OF FINANCIAL CONDITION



December 31 (Dollars in thousands)	2015		2014
ASSETS
Cash and cash equivalents	$	60,429	$	51,725
Short-term investments with bank subsidiary	500		500
Investment securities, available-for-sale (amortized cost of $1,218 at December 31, 2015 and 2014)	6,855		6,240
Other investments	—		1,470
Trading account securities	—		205
Investments in:
Bank subsidiaries	660,087		639,035
Non-bank subsidiaries	1,496		1,165
Other assets	4,668		6,356
Total assets	$	734,035	$	706,696
LIABILITIES AND SHAREHOLDERS’ EQUITY
Commercial paper borrowings	$	8,042	$	12,168
Other liabilities	3,841		3,641
Long-term debt and mandatorily redeemable securities	19,335		17,650
Subordinated notes	58,764		58,764
Total liabilities	89,982		92,223
Shareholders’ equity	644,053		614,473
Total liabilities and shareholders’ equity	$	734,035	$	706,696

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



Year Ended December 31 (Dollars in thousands)	2015		2014			2013
Income:
Dividends from bank subsidiary	$	36,064	$	33,810		$	30,429
Rental income from subsidiaries	2,342		2,314			2,165
Other	426		408			418
Investment securities and other investment gains (losses)	26		(370		)	626
Total income	38,858		36,162			33,638
Expenses:
Interest on subordinated notes	4,220		4,220			4,220
Interest on long-term debt and mandatorily redeemable securities	1,375		1,475			999
Interest on commercial paper and other short-term borrowings	30		36			23
Rent expense	1,737		1,713			1,698
Other	351		2,553			639
Total expenses	7,713		9,997			7,579
Income before income tax benefit and equity in undistributed income of subsidiaries	31,145		26,165			26,059
Income tax benefit	1,721		2,722			1,650
Income before equity in undistributed income of subsidiaries	32,866		28,887			27,709
Equity in undistributed income of subsidiaries:
Bank subsidiaries	24,289		28,891			26,995
Non-bank subsidiaries	331		291			254
Net income	$	57,486	$	58,069		$	54,958
Comprehensive income	$	54,634	$	60,895		$	42,000

STATEMENTS OF CASH FLOWS



Year Ended December 31 (Dollars in thousands)	2015			2014			2013
Operating activities:
Net income	$	57,486		$	58,069		$	54,958
Adjustments to reconcile net income to net cash provided by operating activities:
Equity (undistributed) distributed in excess of income of subsidiaries	(24,620		)	(29,182		)	(27,249		)
Depreciation of premises and equipment	9			21			30
Stock-based compensation	64			35			34
Realized/unrealized investment securities and other investment (gains) losses	(26		)	370			(626		)
Change in trading account securities	205			(13		)	(46		)
Other	3,008			(1,759		)	1,714
Net change in operating activities	36,126			27,541			28,815
Investing activities:
Proceeds from sales and maturities of investment securities	1,470			—			9
Return of capital from subsidiaries	—			1,500			1
Net change in investing activities	1,470			1,500			10
Financing activities:
Net change in commercial paper	(4,126		)	(183		)	7,692
Proceeds from issuance of long-term debt and mandatorily redeemable securities	1,520			1,356			1,331
Payments on long-term debt and mandatorily redeemable securities	(712		)	(569		)	(397		)
Stock issued under stock purchase plans	149			197			168
Net proceeds from issuance of treasury stock	2,373			1,520			3,453
Acquisition of treasury stock	(9,970		)	(16,342		)	(2,273		)
Cash dividends paid on common stock	(18,126		)	(17,643		)	(17,054		)
Net change in financing activities	(28,892		)	(31,664		)	(7,080		)
Net change in cash and cash equivalents	8,704			(2,623		)	21,745
Cash and cash equivalents, beginning of year	51,725			54,348			32,603
Cash and cash equivalents, end of year	$	60,429		$	51,725		$	54,348