1st Source (SRCE) 8-K Cash and Stock Dividends Declared

Exhibit 99.1

For:	Immediate Release	Contact:	Andrea Short
	July 23, 2015		574-235-2000

Record Second Quarter Earnings at 1st Source Corporation,

Cash and Stock Dividends Declared

South Bend, IN - 1st Source Corporation (NASDAQ:SRCE), parent company of 1st Source Bank, today reported net income of $15.63 million for the second quarter of 2015, up 7.84% over the $14.49 million earned in the second quarter of 2014. Year to date, net income was $29.14 million, up 3.61% compared to the first six months of last year. Diluted net income per common share for the second quarter amounted to $0.59, up 9.26% compared to the $0.54 in the second quarter of 2014. Diluted net income per common share for the first half of 2015 was $1.10, an increase of 5.77% compared to the $1.04 earned a year earlier. (All share and per share information has been adjusted for a 10% stock dividend declared on July 22, 2015, unless otherwise noted.)

At its July 2015 meeting, the Board of Directors approved a cash dividend of $0.18 per common share (unadjusted). The cash dividend is payable to shareholders of record on August 4, 2015. The Board also approved a ten percent (10%) stock dividend of 1st Source common stock. The stock dividend is payable to shareholders of record on August 5, 2015. Both the cash and the stock dividend will be paid on August 14, 2015.

According to Christopher J. Murphy, III, Chairman, "It was a solid quarter for 1st Source as we achieved record quarterly net income of $15.63 million, up 7.84% from one year ago. Credit quality continues to be strong with nonperforming assets reduced by 47.14% to $21.72 million from $41.09 million a year ago and we saw steady growth in loans and deposits. The quarter also benefited from net interest recoveries. We look forward to the remainder of 2015 as the economy continues to improve."

"This quarter we opened our 81^st banking center in a high traffic area of Elkhart, Indiana, and we started construction on a new banking center in the heart of downtown New Haven, Indiana. Additionally, next week we will open a location in Portage, Michigan, our second banking center in the greater Kalamazoo, Michigan market. We continue to add new clients every day by staying true to our mission of helping our clients achieve security, build wealth and realize their dreams and by giving straight talk and sound advice, keeping their best interests in mind for the long term."

The net interest margin was 3.64% for the second quarter of 2015 versus 3.59% for the same period in 2014. The net interest margin was 3.61% for the six months ended June 30, 2015, versus 3.59% for the same period in 2014. Tax-equivalent net interest income was $42.07 million for the second quarter of 2015, compared to the $40.62 million from 2014’s second quarter. For the first six months of 2015, tax equivalent net interest income was $81.93 million, compared to $79.71 million for the first six months of 2014.

The reserve for loan and lease losses as of June 30, 2015 was 2.25% of total loans and leases compared to 2.38% at June 30, 2014. Net recoveries of $0.68 million were recorded for the second quarter of 2015 compared with net

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recoveries of $1.22 million in the same quarter a year ago. Year to date, net recoveries of $0.35 million have been recorded in 2015, compared to net recoveries of $1.92 million for the first half of 2014. The provision for loan and lease losses was $0.81 million for the second quarter of 2015, compared with $2.54 million for the same period in 2014. For the first six months of 2015, the provision for loan and lease losses was $1.17 million compared with $3.35 million for the first six months of 2014. The ratio of nonperforming assets to net loans and leases improved to 0.55% as of June 30, 2015, compared to 1.08% on June 30, 2014.

Total assets at the end of the second quarter of 2015 were $5.01 billion, up 1.79% from the $4.93 billion a year ago. Total loans and leases were $3.85 billion, up 3.47% from June 30, 2014. Total deposits were $3.96 billion, up 3.85% from the comparable figure at June 30, 2014. As of June 30, 2015, the common equity-to-assets ratio was 12.60%, compared to 12.06% a year ago and the tangible common equity-to-tangible assets ratio was 11.09% compared to 10.50% a year earlier.

Noninterest income for the second quarter of 2015 was $21.53 million, an increase of 12.02% from the same period in 2014. For the first six months of 2015, noninterest income was $41.28 million, up 6.90% compared to 2014. Noninterest income increased primarily as a result of increased equipment rental income and trust fees.

Noninterest expense was $38.24 million for the second quarter of 2015, up 11.09% from the second quarter of 2014. For the six months ended June 30, 2015, noninterest expense was $76.30 million, up 8.39% compared with $70.40 million for the same period in 2014. Noninterest expense increased primarily as a result of higher salary expense, group insurance costs and depreciation on leased equipment.

1st Source common stock is traded on the NASDAQ Global Select Market under “SRCE” and appears in the National Market System tables in many daily newspapers under the code name “1st Src.” Since 1863, 1st Source has been committed to the success of the communities it serves. For more information, visit www.1stsource.com.

1st Source serves the northern half of Indiana and southwest Michigan and is the largest locally controlled financial institution headquartered in the area. While delivering a comprehensive range of consumer and commercial banking services through its community bank offices, 1st Source has distinguished itself with highly personalized services. 1st Source Bank also competes for business nationally by offering specialized financing services for new and used private and cargo aircraft, automobiles for leasing and rental agencies, medium and heavy duty trucks, and construction equipment. The Corporation includes 81 community banking centers in 17 counties, 8 trust and wealth management locations, 8 1st Source Insurance offices, as well as 22 specialty finance locations nationwide.

In addition to the results presented in accordance with generally accepted accounting principles in the United States of America, this press release contains certain non-GAAP financial measures. 1st Source Corporation believes that providing non-GAAP financial measures provides investors with information useful to understanding our financial performance. Additionally, these non-GAAP measures are used by management for planning and forecasting purposes, including measures based on “tangible equity” which is “common shareholders’ equity” excluding intangible assets.

Except for historical information contained herein, the matters discussed in this document express “forward-looking statements.” Generally, the words “believe,” “contemplate,” “seek,” “plan,” “possible,” “assume,” “expect,” “intend,” “targeted,” “continue,” “remain,” “estimate,” “anticipate,” “project,” “will,” “should,” “indicate,” “would,” “may” and similar expressions indicate forward-looking statements. Those statements, including statements, projections,

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estimates or assumptions concerning future events or performance, and other statements that are other than statements of historical fact, are subject to material risks and uncertainties. 1st Source cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made.

1st Source may make other written or oral forward-looking statements from time to time. Readers are advised that various important factors could cause 1st Source’s actual results or circumstances for future periods to differ materially from those anticipated or projected in such forward-looking statements. Such factors, among others, include changes in laws, regulations or accounting principles generally accepted in the United States; 1st Source’s competitive position within its markets served; increasing consolidation within the banking industry; unforeseen changes in interest rates; unforeseen downturns in the local, regional or national economies or in the industries in which 1st Source has credit concentrations; and other risks discussed in 1st Source’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, which filings are available from the SEC. 1st Source undertakes no obligation to publicly update or revise any forward-looking statements.

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(charts attached)

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1st SOURCE CORPORATION
2nd QUARTER 2015 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands, except per share data)
	Three Months Ended   June 30,								Six Months Ended   June 30,
	2015				2014				2015				2014
END OF PERIOD BALANCES
Assets									$	5,014,023			$	4,925,727
Loans and leases									3,852,699				3,723,535
Deposits									3,962,585				3,815,735
Reserve for loan and lease losses									86,588				88,776
Intangible assets									84,967				85,796
Common shareholders’ equity									631,631				594,218
AVERAGE BALANCES
Assets	$	4,956,246			$	4,831,313			$	4,888,724			$	4,765,107
Earning assets	4,634,091				4,539,093				4,573,117				4,477,086
Investments	791,569				835,755				790,073				833,688
Loans and leases	3,800,120				3,662,156				3,737,449				3,603,016
Deposits	3,927,077				3,764,043				3,872,320				3,717,259
Interest bearing liabilities	3,450,830				3,451,752				3,407,965				3,396,660
Common shareholders’ equity	632,300				599,292				627,873				597,002
INCOME STATEMENT DATA
Net interest income	$	41,665			$	40,162			$	81,101			$	78,780
Net interest income - FTE	42,072				40,622				81,926				79,709
Provision for loan and lease losses	811				2,543				1,168				3,347
Noninterest income	21,531				19,221				41,282				38,619
Noninterest expense	38,241				34,424				76,302				70,396
Net income	15,630				14,494				29,141				28,126
PER SHARE DATA*
Basic net income per common share	$	0.59			$	0.54			$	1.10			$	1.04
Diluted net income per common share	0.59				0.54				1.10				1.04
Common cash dividends declared	0.164				0.164				0.327				0.318
Book value per common share	24.11				22.63				24.11				22.63
Tangible book value per common share	20.87				19.36				20.87				19.36
Market value - High	31.75				30.19				31.75				30.19
Market value - Low	27.69				26.15				26.95				25.05
Basic weighted average common shares outstanding	26,212,999				26,485,789				26,235,511				26,616,762
Diluted weighted average common shares outstanding	26,212,999				26,485,789				26,235,511				26,616,762
KEY RATIOS
Return on average assets	1.26			%	1.20			%	1.20			%	1.19			%
Return on average common shareholders’ equity	9.91				9.70				9.36				9.50
Average common shareholders’ equity to average assets	12.76				12.40				12.84				12.53
End of period tangible common equity to tangible assets	11.09				10.50				11.09				10.50
Risk-based capital - Common Equity Tier 1	12.72				N/A				12.72				N/A
Risk-based capital - Tier 1	14.05				13.97				14.05				13.97
Risk-based capital - Total	15.36				15.28				15.36				15.28
Net interest margin	3.64				3.59				3.61				3.59
Efficiency: expense to revenue	57.74				55.59				59.85				57.01
Net charge offs to average loans and leases	(0.07		)		(0.13		)		(0.02		)		(0.11		)
Loan and lease loss reserve to loans and leases	2.25				2.38				2.25				2.38
Nonperforming assets to loans and leases	0.55				1.08				0.55				1.08
ASSET QUALITY
Loans and leases past due 90 days or more									$	278			$	475
Nonaccrual loans and leases									15,082				32,486
Other real estate									301				1,853
Former bank premises held for sale									626				801
Repossessions									5,433				5,455
Equipment owned under operating leases									—				23
Total nonperforming assets									$	21,720			$	41,093
*Per share figures have been adjusted for 10% stock dividend declared July 22, 2015.

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1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited - Dollars in thousands)
	June 30, 2015			June 30, 2014
ASSETS
Cash and due from banks	$	66,302		$	110,933
Federal funds sold and interest bearing deposits with other banks	11,396			6,445
Investment securities available-for-sale (amortized cost of $773,195 and $798,708 at  June 30, 2015 and 2014, respectively)	786,471			815,056
Other investments	20,743			23,597
Trading account securities	211			198
Mortgages held for sale	14,782			19,034
Loans and leases, net of unearned discount:
Commercial and agricultural	719,972			720,226
Auto and light truck	446,731			471,080
Medium and heavy duty truck	250,045			243,358
Aircraft financing	751,665			733,194
Construction equipment financing	445,479			369,755
Commercial real estate	641,205			602,321
Residential real estate	454,730			454,845
Consumer	142,872			128,756
Total loans and leases	3,852,699			3,723,535
Reserve for loan and lease losses	(86,588		)	(88,776		)
Net loans and leases	3,766,111			3,634,759
Equipment owned under operating leases, net	93,875			63,350
Net premises and equipment	50,931			45,840
Goodwill and intangible assets	84,967			85,796
Accrued income and other assets	118,234			120,719
Total assets	$	5,014,023		$	4,925,727
LIABILITIES
Deposits:
Noninterest bearing	$	857,079		$	768,710
Interest bearing	3,105,506			3,047,025
Total deposits	3,962,585			3,815,735
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase	122,658			191,545
Other short-term borrowings	139,529			158,457
Total short-term borrowings	262,187			350,002
Long-term debt and mandatorily redeemable securities	57,488			59,726
Subordinated notes	58,764			58,764
Accrued expenses and other liabilities	41,368			47,282
Total liabilities	4,382,392			4,331,509
SHAREHOLDERS’ EQUITY
Preferred stock; no par value	—			—
Common stock; no par value*	436,538			346,535
Retained earnings*	232,507			280,917
Cost of common stock in treasury	(45,706		)	(43,445		)
Accumulated other comprehensive income	8,292			10,211
Total shareholders’ equity	631,631			594,218
Total liabilities and shareholders’ equity	$	5,014,023		$	4,925,727
*June 30, 2015 common stock and retained earnings gives retrospective recognition to a 10% stock dividend declared July 22, 2015.

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1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - Dollars in thousands)
	Three Months Ended   June 30,						Six Months Ended   June 30,
	2015			2014			2015		2014
Interest income:
Loans and leases	$	42,583		$	40,401		$	82,187	$	79,316
Investment securities, taxable	2,648			3,401			5,652		6,746
Investment securities, tax-exempt	754			816			1,523		1,635
Other	229			232			484		509
Total interest income	46,214			44,850			89,846		88,206
Interest expense:
Deposits	2,838			2,994			5,397		5,965
Short-term borrowings	131			169			234		306
Subordinated notes	1,055			1,055			2,110		2,110
Long-term debt and mandatorily redeemable securities	525			470			1,004		1,045
Total interest expense	4,549			4,688			8,745		9,426
Net interest income	41,665			40,162			81,101		78,780
Provision for loan and lease losses	811			2,543			1,168		3,347
Net interest income after provision for loan and lease losses	40,854			37,619			79,933		75,433
Noninterest income:
Trust fees	5,247			4,955			9,804		9,431
Service charges on deposit accounts	2,367			2,207			4,564		4,273
Debit card income	2,628			2,463			5,027		4,695
Mortgage banking income	1,239			1,181			2,490		2,515
Insurance commissions	1,382			1,288			2,687		2,851
Equipment rental income	5,342			4,098			10,421		8,180
Gains on investment securities available-for-sale	4			—			4		963
Other income	3,322			3,029			6,285		5,711
Total noninterest income	21,531			19,221			41,282		38,619
Noninterest expense:
Salaries and employee benefits	20,794			18,827			41,719		38,309
Net occupancy expense	2,345			2,235			4,806		4,672
Furniture and equipment expense	4,531			4,413			8,867		8,650
Depreciation - leased equipment	4,396			3,290			8,484		6,539
Professional fees	1,108			1,062			1,978		2,190
Supplies and communication	1,409			1,337			2,815		2,729
FDIC and other insurance	847			850			1,696		1,714
Business development and marketing expense	1,214			899			2,263		2,583
Loan and lease collection and repossession expense	(294		)	(17		)	69		(512		)
Other expense	1,891			1,528			3,605		3,522
Total noninterest expense	38,241			34,424			76,302		70,396
Income before income taxes	24,144			22,416			44,913		43,656
Income tax expense	8,514			7,922			15,772		15,530
Net income	$	15,630		$	14,494		$	29,141	$	28,126
The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP #336901 10 3)
Please contact us at shareholder@1stsource.com

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