1st Source Corporation (Parent Company Only) Financial Information

STATEMENTS OF FINANCIAL CONDITION



December 31 (Dollars in thousands)	2018		2017
ASSETS
Cash and cash equivalents	$	106,647	$	100,155
Short-term investments with bank subsidiary	500		500
Investments in:
Bank subsidiaries	740,697		706,119
Non-bank subsidiaries	1		1
Other assets	4,191		2,696
Total assets	$	852,036	$	809,471

LIABILITIES AND SHAREHOLDERS’ EQUITY
Commercial paper	$	4,325	$	6,115
Long-term debt and mandatorily redeemable securities	24,676		22,942
Subordinated notes	58,764		58,764
Other liabilities	2,189		3,113
Total liabilities	89,954		90,934
Total shareholders’ equity	762,082		718,537
Total liabilities and shareholders’ equity	$	852,036	$	809,471

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



Year Ended December 31 (Dollars in thousands)	2018			2017		2016
Income:
Dividends from bank subsidiary	$	45,080		$	38,317	$	36,064
Dividends from non-bank subsidiary	—			958		—
Rental income from subsidiaries	2,613			2,354		2,363
Other	367			422		444
Investment securities and other investment (losses) gains	(180		)	6,431		3,901
Total income	47,880			48,482		42,772
Expenses:
Interest on subordinated notes	3,625			4,002		4,220
Interest on long-term debt and mandatorily redeemable securities	1,624			1,685		1,454
Interest on commercial paper and other short-term borrowings	14			17		20
Rent	1,774			2,070		1,739
Other	642			1,733		1,179
Total expenses	7,679			9,507		8,612
Income before income tax benefit and equity in undistributed income of subsidiaries	40,201			38,975		34,160
Income tax benefit	1,009			204		741
Income before equity in undistributed income of subsidiaries	41,210			39,179		34,901
Equity in undistributed income of subsidiaries:
Bank subsidiaries	41,204			28,872		22,569
Non-bank subsidiaries	—			—		316
Net income	$	82,414		$	68,051	$	57,786
Comprehensive income	$	75,788		$	63,375	$	52,575

STATEMENTS OF CASH FLOWS



Year Ended December 31 (Dollars in thousands)	2018			2017			2016
Operating activities:
Net income	$	82,414		$	68,051		$	57,786
Adjustments to reconcile net income to net cash provided by operating activities:
Equity (undistributed) distributed in excess of income of subsidiaries	(41,204		)	(28,872		)	(22,885		)
Depreciation of premises and equipment	2			2			4
Stock-based compensation	71			48			52
Realized/unrealized investment securities and other investment losses (gains)	180			(6,431		)	(3,901		)
Other	45			4,122			3,132
Net change in operating activities	41,508			36,920			34,188
Investing activities:
Proceeds from sales and maturities of investment securities	—			6,327			1,795
Net change in partnership investments	(980		)	(62		)	2,903
Return of capital from subsidiaries	—			854			—
Net change in investing activities	(980		)	7,119			4,698
Financing activities:
Net change in commercial paper	(1,790		)	354			(2,281		)
Proceeds from issuance of long-term debt and mandatorily redeemable securities	1,867			1,248			1,607
Payments on long-term debt and mandatorily redeemable securities	(1,064		)	(667		)	(627		)
Stock issued under stock purchase plans	145			153			120
Net proceeds from issuance of treasury stock	1,763			2,176			2,636
Acquisition of treasury stock	(9,271		)	(41		)	(8,030		)
Cash dividends paid on common stock	(25,686		)	(20,431		)	(19,416		)
Net change in financing activities	(34,036		)	(17,208		)	(25,991		)
Net change in cash and cash equivalents	6,492			26,831			12,895
Cash and cash equivalents, beginning of year	100,155			73,324			60,429
Cash and cash equivalents, end of year	$	106,647		$	100,155		$	73,324