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<SEC-DOCUMENT>0000034782-05-000031.txt : 20050428
<SEC-HEADER>0000034782-05-000031.hdr.sgml : 20050428
<ACCEPTANCE-DATETIME>20050428150227
ACCESSION NUMBER:		0000034782-05-000031
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20050331
FILED AS OF DATE:		20050428
DATE AS OF CHANGE:		20050428

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			1ST SOURCE CORP
		CENTRAL INDEX KEY:			0000034782
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				351068133
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-06233
		FILM NUMBER:		05780175

	BUSINESS ADDRESS:	
		STREET 1:		100 NORTH MICHIGAN STREET
		CITY:			SOUTH BEND
		STATE:			IN
		ZIP:			46601
		BUSINESS PHONE:		5742352702

	MAIL ADDRESS:	
		STREET 1:		P O BOX 1602
		STREET 2:		P O BOX 1602
		CITY:			SOUTH BEND
		STATE:			IN
		ZIP:			46634

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FBT BANCORP INC
		DATE OF NAME CHANGE:	19820818
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q_q1.txt
<DESCRIPTION>1ST SOURCE CORP FORM 10-Q 1Q05
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the quarterly period ended March 31, 2005

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

       For the transition period from ________________ to ________________

                    Commission file number 0-6233

                             1st SOURCE CORPORATION
             (Exact name of registrant as specified in its charter)

            INDIANA                                           35-1068133
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

100 North Michigan Street          South Bend, Indiana                    46601
- -------------------------          -------------------                    -----
              (Address of principal executive offices) (Zip Code)

                                 (574) 235-2000
                                 --------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
                                 --------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                        Yes      X       No______

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                        Yes     X        No ______

               Number of shares of common stock outstanding as of
                       April 20, 2005 - 20,709,423 shares

<PAGE>

                                TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION
                                                                            Page
Item 1.  Financial Statements (Unaudited)
            Consolidated statements of financial condition --
            March 31, 2005, and December 31, 2004                              3
            Consolidated statements of income --
            three months ended March 31, 2005 and 2004                         4
            Consolidated statement of changes in shareholders' equity
            three months ended March 31, 2005 and 2004                         5
            Consolidated statements of cash flows --
            three months ended March 31, 2005 and 2004                         6
            Notes to the Consolidated Financial Statements                     7
Item 2.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                         10
Item 3.  Quantitative and Qualitative Disclosures About Market Risk           18
Item 4.  Controls and Procedures                                              19

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings                                                    19
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds          19
Item 3.  Defaults Upon Senior Securities                                      19
Item 4.  Submission of Matters to a Vote of Security Holders                  20
Item 5.  Other Information                                                    20
Item 6.  Exhibits                                                             20


SIGNATURES                                                                    21




<PAGE>

<TABLE>
<CAPTION>
1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited - Dollars in thousands)

                                                                March 31,         December 31,
                                                                   2005               2004
                                                               --------------------------------
<S>                                                             <C>                <C>
ASSETS
Cash and due from banks                                         $    86,955        $    78,255
Federal funds sold and
  interest bearing deposits with other banks                         26,252            220,131
Investment securities available-for-sale
  (amortized cost of $740,662 and $790,404
  at March 31, 2005 and December 31, 2004, respectively)            733,786            789,923

Mortgages held for sale                                              79,591             55,711

Loans and leases - net of unearned discount:
  Commercial and agricultural loans                                 431,750            425,018
  Auto, light truck and environmental equipment                     269,361            263,637
  Medium and heavy duty truck                                       274,097            267,834
  Aircraft financing                                                423,017            444,481
  Construction equipment financing                                  200,601            196,516
  Loans secured by real estate                                      579,388            583,437
  Consumer loans                                                    100,781             99,245
                                                               --------------------------------
Total loans and leases                                            2,278,995          2,280,168
  Reserve for loan and lease losses                                 (62,647)           (63,672)
                                                               --------------------------------
Net loans and leases                                              2,216,348          2,216,496

Equipment owned under operating leases,
  net of accumulated depreciation                                    44,552             47,257
Net premises and equipment                                           37,581             37,314
Accrued income and other assets                                     116,388            118,628
                                                               --------------------------------
Total assets                                                    $ 3,341,453        $ 3,563,715
                                                               ================================

LIABILITIES
Deposits:
  Noninterest bearing                                           $   402,004        $   378,867
  Interest bearing                                                2,187,935          2,428,136
                                                               --------------------------------
Total deposits                                                    2,589,939          2,807,003

Federal funds purchased and securities
  sold under agreements to repurchase                               194,247            216,751
Other short-term borrowings                                          97,401             82,911
Long-term debt and mandatorily redeemable securities                 18,027             17,964
Subordinated notes                                                   59,022             59,022
Accrued expenses and other liabilities                               56,188             53,464
                                                               --------------------------------
Total liabilities                                                 3,014,824          3,237,115

SHAREHOLDERS' EQUITY
Preferred stock; no par value                                             -                  -
Common stock; no par value                                            7,578              7,578
Capital surplus                                                     214,001            214,001
Retained earnings                                                   120,387            115,830
Cost of common stock in treasury                                    (11,096)           (10,512)
Accumulated other comprehensive loss                                 (4,241)              (297)
                                                               --------------------------------
Total shareholders' equity                                          326,629            326,600
                                                               --------------------------------
Total liabilities and shareholders' equity                      $ 3,341,453        $ 3,563,715
                                                               ================================
</TABLE>

The accompanying notes are a part of the consolidated financial statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>

1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - Dollars in thousands, except per share amounts)

                                                                    Three Months Ended March 31,
                                                               -------------------------------------
                                                                    2005                 2004
                                                               -------------------------------------
<S>                                                                <C>                  <C>
Interest income:
  Loans and leases                                                 $    33,637          $    32,454
  Investment securities, taxable                                         3,818                4,289
  Investment securities, tax-exempt                                      1,264                1,317
  Other                                                                     77                   65
                                                               -------------------------------------
Total interest income                                                   38,796               38,125

Interest expense:
  Deposits                                                              12,316                9,823
  Short-term borrowings                                                  1,702                1,257
  Subordinated notes                                                       964                  961
  Long-term debt and mandatorily redeemable securities                     210                  322
                                                               -------------------------------------
Total interest expense                                                  15,192               12,363
                                                               -------------------------------------
Net interest income                                                     23,604               25,762
(Recovery of)/provision for loan and lease losses                         (421)                 101
                                                               -------------------------------------
Net interest income after
  provision for loan and lease losses                                   24,025               25,661

Noninterest income:
  Trust fees                                                             3,246                3,090
  Service charges on deposit accounts                                    3,963                3,706
  Mortgage banking income                                                2,767                 (891)
  Equipment rental income                                                4,015                5,824
  Other income                                                           2,800                2,542
  Investment securities and other investment gains (losses)                904                 (252)
                                                               -------------------------------------
Total noninterest income                                                17,695               14,019
                                                               -------------------------------------
Noninterest expense:
  Salaries and employee benefits                                        18,544               15,754
  Net occupancy expense                                                  2,102                1,833
  Furniture and equipment expense                                        2,642                2,584
  Depreciation - leased equipment                                        3,323                4,536
  Supplies and communication                                             1,343                1,432
  Loan and lease collection and repossession (recovery)/expense           (134)               1,055
  Other expense                                                          3,854                5,148
                                                               -------------------------------------
Total noninterest expense                                               31,674               32,342
                                                               -------------------------------------
Income before income taxes                                              10,046                7,338
Income tax expense                                                       3,102                2,259
                                                               -------------------------------------
Net income                                                         $     6,944          $     5,079
                                                               =====================================
Other comprehensive income, net of tax:
  Change in unrealized (depreciation) appreciation of
       available-for-sale securities                                    (3,944)               1,909
                                                               -------------------------------------
Total comprehensive income                                         $     3,000          $     6,988
                                                               =====================================
Per common share:
  Basic net income per common share                                $      0.34          $      0.25
                                                               =====================================
  Diluted net income per common share                              $      0.33          $      0.24
                                                               =====================================
  Dividends                                                        $     0.120          $     0.100
                                                               =====================================
Basic weighted average common shares outstanding                    20,719,596           20,727,035
                                                               =====================================
Diluted weighted average common shares outstanding                  21,041,812           21,035,918
                                                               =====================================
</TABLE>

The accompanying notes are a part of the consolidated financial statements.


                                       4
<PAGE>

<TABLE>
<CAPTION>

1st SOURCE CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited - Dollars in thousands)
- ------------------------------------------------------------------------------------------------------------------------------

                                                                                                                     Net
                                                                                                                 Unrealized
                                                                                                                Appreciation
                                                                                                      Cost of   (Depreciation)
                                                                                                      Common    of Securities
                                                               Common        Capital     Retained      Stock     Available-
                                                  Total         Stock        Surplus     Earnings   in Treasury   For-Sale
- ------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>         <C>         <C>          <C>            <C>
Balance at January 1, 2004                         $314,691        $7,578      $214,001    $100,534     ($9,777)       $2,355
- ------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income, net of tax:
Net Income                                            5,079             -             -       5,079           -             -
   Change in unrealized appreciation
   of available-for-sale securities, net of tax       1,909             -             -           -           -         1,909
                                                      -----
Total Comprehensive Income                            6,988             -             -           -           -             -
Issuance of 28,327 common shares
 under stock based compensation plans,
 including related tax effects                          409             -             -         (10)        419             -
Cost of 7,169 shares of common
 stock acquired for treasury                           (154)            -             -           -        (154)            -
Cash dividend ($.100 per share)                      (2,074)            -             -      (2,074)          -             -
- ------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 2004                          $319,860        $7,578      $214,001    $103,529     ($9,512)       $4,264
==============================================================================================================================

Balance at January 1, 2005                         $326,600        $7,578      $214,001    $115,830    ($10,512)        ($297)
- ------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income, net of tax:
Net Income                                            6,944             -             -       6,944           -             -
   Change in unrealized appreciation
   of available-for-sale securities, net of tax      (3,944)            -             -           -           -        (3,944)
                                                     ------
Total Comprehensive Income                            3,000             -             -           -           -             -
Issuance of 15,866 common shares
 under stock based compensation plans,
 including related tax effects                          326             -             -         101         225             -
Cost of 35,675 shares of common
 stock acquired for treasury                           (809)            -             -           -        (809)            -
Cash dividend ($0.12 per share)                      (2,488)            -             -      (2,488)          -             -
- ------------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 2005                          $326,629        $7,578      $214,001    $120,387    ($11,096)      ($4,241)
==============================================================================================================================
</TABLE>

The accompanying notes are a part of the consolidated financial statements.


                                       5
<PAGE>
<TABLE>
<CAPTION>

1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - Dollars in thousands)
                                                                     Three Months Ended March 31,
                                                                   -------------------------------
                                                                       2005                 2004
                                                                   -------------       -----------
<S>                                                                <C>                 <C>
Operating activities:
  Net income                                                       $   6,944           $   5,079
  Adjustments to reconcile net income to net cash
    from operating activities:
      Provision for loan and lease (recoveries) losses                  (421)                101
      Depreciation of premises and equipment                           4,659               5,777
      Amortization of investment security premiums
        and accretion of discounts, net                                1,388               1,426
      Amortization of mortgage servicing rights                        1,803               1,919
      Mortgage servicing asset (recoveries) impairment charges        (1,089)              3,227
      Deferred income taxes                                            7,007               4,309
      Realized investment securities (gains) losses                     (904)                252
      Change in mortgages held for sale                              (23,880)            (21,435)
      (Increase) decrease in interest receivable                        (296)                943
      Increase in interest payable                                        99                 762
      Change in other assets                                           1,823              (5,541)
      Change in other liabilities                                     (1,932)             (3,788)
      Other                                                              (47)               (617)
                                                                   ----------          -----------
Net cash from operating activities                                    (4,846)             (7,586)

Investing activities:
  Proceeds from sales and maturities of investment securities         90,913              64,205
  Purchases of investment securities                                 (41,655)            (28,949)
  Net change in short-term investments                               193,879                 300
  Loans sold or participated to others                                   (18)                 45
  Net change in loans and leases                                         587              54,741
  Net change in equipment owned under operating leases                  (618)              2,775
  Purchases of premises and equipment                                 (1,664)               (191)
                                                                   ----------          -----------
Net cash from investing activities                                   241,424              92,926

Financing activities:
  Net change in demand deposits, NOW
    accounts and savings accounts                                   (205,568)           (116,527)
  Net change in certificates of deposit                              (11,496)             33,302
  Net change in short-term borrowings                                 (8,014)            (32,233)
  Proceeds from issuance of long-term debt                               312                 396
  Payments on long-term debt                                             (95)                (73)
  Net proceeds from issuance of treasury stock                           326                 409
  Acquisition of treasury stock                                         (809)               (154)
  Cash dividends                                                      (2,534)             (2,113)
                                                                   ----------          -----------
Net cash from financing activities                                  (227,878)           (116,993)

Net change in cash and cash equivalents                                8,700             (31,653)

Cash and cash equivalents, beginning of year                          78,255             109,787
                                                                   ----------          -----------

Cash and cash equivalents, end of period                           $ 86,955            $  78,134
                                                                   ==========          ===========
</TABLE>

The accompanying notes are a part of the consolidated financial statements.


                                       6
<PAGE>


                             1ST SOURCE CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.    Basis of Presentation

     The accompanying unaudited consolidated financial statements reflect all
adjustments (all of which are normal and recurring in nature) which are, in the
opinion of management, necessary for a fair presentation of the consolidated
financial position, the results of operations, changes in shareholders' equity,
and cash flows for the periods presented. These unaudited consolidated financial
statements have been prepared according to the rules and regulations of the
Securities and Exchange Commission (SEC) and, therefore, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with U. S. generally accepted accounting principles have been
omitted. The Notes to the Consolidated Financial Statements appearing in 1st
Source Corporation's (1st Source) Annual Report on Form 10-K (2004 Annual
Report), which include descriptions of significant accounting policies, should
be read in conjunction with these interim financial statements. The balance
sheet at December 31, 2004 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by U. S. generally accepted accounting principles for
complete financial statements. Certain amounts in the prior period consolidated
financial statements have been reclassified to conform with the current year
presentation.

     1st Source accounts for its stock-based compensation plans under the
recognition and measurement principles provided in Accounting Principles Board
Opinion (APB) No. 25, "Accounting for Stock Issued to Employees," and related
Interpretations. Stock-based employee compensation cost under the Executive
Incentive Plan and the Restricted Stock Award Plan is reflected in net income.
For the stock option plans, the stock option agreement, and the Employee Stock
Purchase Plan, no compensation cost is reflected in net income as all options
granted under these plans had an exercise price equal to, or approximating, the
market value of the underlying common stock on the date of grant.

     Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation," requires pro forma disclosures of net income and
earnings per share for companies not adopting its fair value accounting method
for stock-based employee compensation. The pro forma disclosures presented in
Note 5 - Stock-Based Compensation use the fair value method of SFAS No. 123 to
measure compensation cost for stock-based employee compensation plans.

Note 2.    Recent Accounting Pronouncements

        Accounting for Stock-Based Compensation: On December 16, 2004, the FASB
issued SFAS No. 123(R), "Share-Based Payment", which is a revision of SFAS No.
123, "Accounting for Stock-Based Compensation." SFAS No. 123(R) supersedes APB
No. 25, "Accounting for Stock Issued to Employees," and amends SFAS No. 95,
"Statement of Cash Flows." Generally, the approach in SFAS No. 123(R) is similar
to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an alternative. Originally, SFAS No. 123(R) was required
to be adopted no later than July 1, 2005.

     On April 14, 2005, the SEC issued an amendment to SFAS No. 123(R), which
allows companies to implement SFAS 123(R) at the beginning of their next fiscal
year, instead of the next reporting period, that begins after June 15, 2005. The
new rule does not change the accounting required by SFAS No. 123(R), it only
changes the dates for compliance with the standard. Early adoption is permitted

                                       7
<PAGE>

in periods in which financial statements have not yet been issued. 1st Source
expects to adopt SFAS No. 123(R) on January 1, 2006.

        SFAS No. 123(R) permits public companies to adopt its requirements using
one of two methods:

     1.   A  "modified   prospective"  method  in  which  compensation  cost  is
          recognized  beginning  with  the  effective  date  (a)  based  on  the
          requirements of SFAS No. 123(R) for all share-based  payments  granted
          after the effective  date, and (b) based on the  requirements  of SFAS
          No. 123 for all awards  granted to  employees  prior to the  effective
          date of SFAS No. 123(R) that remain unvested on the effective date.

     2.   A "modified  retrospective"  method which includes the requirements of
          the modified  prospective  method  described  above,  but also permits
          entities to restate based on the amounts  previously  recognized under
          SFAS No.  123 for  purposes  of pro forma  disclosures  either (a) all
          prior periods  presented,  or (b) prior interim periods of the year of
          adoption.

     1st Source has not made a determination as to which method it will utilize
upon adoption of SFAS No. 123(R). As permitted by SFAS No. 123, 1st Source
currently accounts for share-based payments to employees using APB Opinion No.
25's intrinsic value method and, as such, generally recognizes no compensation
cost for employee stock options. Accordingly, the adoption of SFAS No. 123(R)'s
fair value method may have a significant impact on our results of operations,
although it will have no impact on our overall financial position. The impact of
adoption of SFAS No. 123(R) cannot be predicted at this time because it will
depend on levels of share-based payments granted in the future. However, had we
adopted SFAS No. 123(R) in prior periods, the impact of the standard would have
approximated the impact of SFAS No. 123 as described in the disclosure of pro
forma net income and earnings per share in Note 5 of the consolidated financial
statements. SFAS No. 123(R) also requires the benefits of tax deductions in
excess of recognized compensation cost to be reported as a financing cash flow,
rather than as an operating cash flow as required under current literature. This
requirement will reduce net operating cash flows and increase net financing cash
flows in periods after adoption. 1st Source cannot estimate what those amounts
will be in the future (because they depend on, among other things, when
employees exercise stock options).

Note 3.  Reserve for Loan and Lease Losses

     The reserve for loan and lease losses is maintained at a level believed to
be adequate by management to absorb probable losses inherent in the loan and
lease portfolio. The determination of the reserve requires significant judgment
reflecting management's best estimate of probable loan and lease losses related
to specifically identified loans and leases as well as probable losses in the
remainder of the various loan and lease portfolios. The methodology for
assessing the appropriateness of the reserve consists of several key elements,
which include: specific reserves for identified special attention loans and
leases (classified loans and leases and internal watch list credits), percentage
allocations for special attention loans and leases without specific reserves,
formula reserves for each business lending division portfolio, including a
higher percentage reserve allocation for special attention loans and leases
without a specific reserve, and reserves for pooled homogenous loans and leases.
Management's evaluation is based upon a continuing review of these portfolios,
estimates of future customer performance, collateral values and dispositions and
consideration of current economic trends, all of which are subject to judgment
and will change.

Note 4.  Financial Instruments with Off-Balance-Sheet Risk

     To meet the financing needs of its customers, 1st Source and its
subsidiaries are parties to financial instruments with off-balance-sheet risk in
the normal course of business. These off-balance-sheet financial instruments

                                       8
<PAGE>

include commitments to originate, purchase and sell loans and standby letters of
credit. The instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the consolidated
statements of financial condition. 1st Source's exposure to credit loss in the
event of nonperformance by the other party to the financial instruments for loan
commitments and standby letters of credit is represented by the dollar amount of
those instruments. 1st Source uses the same credit policies and collateral
requirements in making commitments and conditional obligations as it does for
on-balance-sheet instruments.

     Trustcorp Mortgage Company and 1st Source Bank (Bank), subsidiaries of 1st
Source, grant mortgage loan commitments to borrowers, subject to normal loan
underwriting standards. The interest rate risk associated with these loan
commitments is managed by entering into contracts for future deliveries of
loans. Loan commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since many of the
commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements.

     Letters of credit are conditional commitments issued by 1st Source to
guarantee the performance of a customer to a third party. The credit risk
involved and collateral obtained in issuing letters of credit is essentially the
same as that involved in extending loan commitments to customers.

     As of March 31, 2005 and December 31, 2004, 1st Source had commitments
outstanding to originate and purchase mortgage loans aggregating $137.08 million
and $106.61 million, respectively. Outstanding commitments to sell mortgage
loans aggregated $128.34 million at March 31, 2005, and $83.82 million at
December 31, 2004. Standby letters of credit totaled $89.97 million and $90.67
million at March 31, 2005, and December 31, 2004, respectively. Standby letters
of credit have terms ranging from six months to one year.

Note 5.  Stock-Based Compensation

     The following pro forma information presents net income and earnings per
share for the three months ended March 31, 2005 and 2004 as if the fair value
method of SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by
SFAS No. 148, had been used to measure compensation cost for stock-based
compensation plans. For the purposes of these pro forma disclosures, the
estimated fair value of stock options and restricted stock awards is amortized
to expense over the related vesting periods.


                                       9
<PAGE>

                                                            3 Months Ended
                                                               March 31
                                                      -------------- -----------
                                                          2005           2004
                                                      -------------- -----------
Net income, as reported (000's)                         $  6,944       $  5,079
Add: Stock-based employee compensation cost
   included in reported net income, net of related
   tax effects                                               916            422
Deduct:  Total stock-based employee compensation
   cost determined under fair value based method
   for all awards, net of related tax effects
                                                            (938)          (451)

Pro forma net income                                    $  6,922       $  5,050

Earnings per share:
    Basic--as reported                                       $0.34         $0.25
    Basic--pro forma                                         $0.33         $0.24

    Diluted--as reported                                     $0.33         $0.24
    Diluted--pro forma                                       $0.33         $0.24


                                     ITEM 2.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Except for historical information contained herein, the matters discussed
in this document express "forward-looking statements." Generally, the words
"believe," "expect," "intend," "estimate," "anticipate," "project," "will,"
"should," and similar expressions indicate forward-looking statements. Those
statements, including statements, projections, 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
include, but are not limited to, changes in law, regulations or U. S. generally
accepted accounting principles; 1st Source's competitive position within its
markets served; increasing consolidation within the banking industry; unforeseen
changes in interest rates; unforeseen changes in loan prepayment assumptions;
unforeseen downturns in or major events affecting the local, regional or
national economies or the industries in which 1st Source has credit
concentrations; and other matters discussed in 1st Source's filings with the
SEC, including its Annual Report on Form 10-K for 2004, which filings are
available from the SEC. 1st Source undertakes no obligation to publicly update
or revise any forward-looking statements.

     The following management's discussion and analysis is presented to provide
information concerning the financial condition of 1st Source as of March 31,
2005, as compared to December 31, 2004, and the results of operations for the
three months ended March 31, 2005 and 2004. This discussion and analysis should
be read in conjunction with 1st Source's consolidated financial statements and
the financial and statistical data appearing elsewhere in this report and 1st
Source's 2004 Annual Report.


                                       10
<PAGE>

                               FINANCIAL CONDITION

    1st Source's assets at March 31, 2005, were $3.34 billion, down 6.24% from
December 31, 2004. Total loans and leases were down 0.05% and total deposits
decreased 7.73% over the comparable figures at the end of 2004.

     Nonperforming assets at March 31, 2005, were $25.67 million compared to
$33.21 million at December 31, 2004, a decrease of 22.71%. Nonperforming assets
decreased due to a decrease in aircraft non-accrual loans and repossessed
aircraft. At March 31, 2005, nonperforming assets were 1.10% of net loans and
leases compared to 1.42% at December 31, 2004.

Accrued income and other assets were as follows:

(Dollars in Thousands)

                                                     March 31,      December 31,
                                                       2005             2004
                                                    -----------    -------------
Accrued income and other assets:
  Bank owned life insurance cash surrender value      $  33,755        $  33,552
  Accrued interest receivable                            12,801           12,505
  Mortgage servicing assets                              21,896           21,414
  Other real estate                                       2,006            1,878
  Repossessions                                           1,459            4,382
  Intangible assets                                      22,931           23,588
  All other assets                                       21,540           21,309
                                                    ------------   -------------
Total accrued income and other assets                 $ 116,388        $ 118,628
                                                    ============   =============

                                     CAPITAL

      As of March 31, 2005, total shareholders' equity was $326.63 million, up
0.01% from the $326.60 million at December 31, 2004. In addition to net income
of $6.94 million, other significant changes in shareholders' equity during the
first three months of 2005 included $0.81 million in treasury stock purchases,
and $2.49 million of dividends paid. The accumulated other comprehensive income
component of shareholders' equity totaled ($4.24) million at March 31, 2005,
compared to ($0.30) million at December 31, 2004. The decrease in accumulated
other comprehensive income was a result of changes in unrealized gain/loss on
securities in the available-for-sale portfolio. The 1st Source equity-to-assets
ratio was 9.78% as of March 31, 2005, compared to 9.16% at December 31, 2004.
Book value per common share rose to $15.77 at March 31, 2005, up from $15.76 at
December 31, 2004.

      1st Source declared and paid dividends per common share of $0.12 during
the first quarter of 2005. The trailing four quarters dividend payout ratio,
representing dividends per share divided by diluted earnings per share, was
34.38%. The dividend payout is continually reviewed by management and the Board
of Directors.

      The banking regulators have established guidelines for leverage capital
requirements, expressed in terms of Tier 1 or core capital as a percentage of
average assets, to measure the soundness of a financial institution. These
guidelines require all banks to maintain a minimum leverage capital ratio of
4.00% for adequately capitalized banks and 5.00% for well-capitalized banks. 1st
Source's leverage capital ratio was 11.01% at March 31, 2005.

                                       11
<PAGE>

      The Federal Reserve Board has established risk-based capital guidelines
for U.S. banking organizations. The guidelines establish a conceptual framework
calling for risk weights to be assigned to on and off-balance sheet items in
arriving at risk-adjusted total assets, with the resulting ratio compared to a
minimum standard to determine whether a bank has adequate capital. The minimum
standard risk-based capital ratios effective in 2005 are 4.00% for adequately
capitalized banks and 6.00% for well-capitalized banks for Tier 1 risk-based
capital and 8.00% and 10.00%, respectively, for total risk-based capital. 1st
Source's Tier 1 risk-based capital ratio on March 31, 2005 was 13.78% and the
total risk-based capital ratio was 15.08%.

                     LIQUIDITY AND INTEREST RATE SENSITIVITY

     The Bank's liquidity is monitored and closely managed by the
Asset/Liability Committee (ALCO), which is comprised of the Bank's senior
management. Asset and liability management includes the management of interest
rate sensitivity and the maintenance of an adequate liquidity position. The
purpose of interest rate sensitivity management is to stabilize net interest
income during periods of changing interest rates.

     Liquidity management is the process by which the Bank ensures that adequate
liquid funds are available to meet financial commitments on a timely basis.
Financial institutions must maintain liquidity to meet day-to-day requirements
of depositors and borrowers, take advantage of market opportunities and provide
a cushion against unforeseen needs.

     Liquidity of the Bank is derived primarily from core deposits, principal
payments received on loans, the sale and maturity of investment securities, net
cash provided by operating activities, and access to other funding sources. The
most stable source of liability funded liquidity is deposit growth and retention
of the core deposit base. The principal sources of asset funded liquidity are
available-for-sale investment securities, cash and due from banks, Federal funds
sold, securities purchased under agreements to resell, and loans and interest
bearing deposits with other banks maturing within one year. Additionally,
liquidity is provided by bank lines of credit, repurchase agreements, and the
ability to borrow from the Federal Reserve Bank and Federal Home Loan Bank.

     1st Source's ALCO monitors and manages the relationship of earning assets
to interest bearing liabilities and the responsiveness of asset yields, interest
expense, and interest margins to changes in market interest rates. At March 31,
2005, the consolidated statement of financial condition was rate sensitive by
$71.3 million more liabilities than assets scheduled to reprice within one year,
or approximately 0.96%.

                              RESULTS OF OPERATIONS

     Net income for the three month period ended March 31, 2005, was $6.94
million, compared to $5.08 million for the same period in 2004. Diluted net
income per common share was $0.33 for the three month period ended March 31,
2005, compared to $0.24 for the same period in 2004. Return on average common
shareholders' equity was 8.60% for the three months ended March 31, 2005,
compared to 6.43% in 2004. The return on total average assets was 0.84% for the
three months ended March 31, 2005, compared to 0.63% in 2004.

     The increase in net income for the three months ended March 31, 2005, over
the first three months of 2004, was primarily the result of an increase in
mortgage banking income, a credit provision for loan and lease losses, and a
decrease in loan and lease collection and repossession expenses, offset by a
decrease in net interest income, and an increase in salaries and employee
benefit expense. Details of the changes in the various components of net income
are further discussed below.


                                       12
<PAGE>

                               NET INTEREST INCOME

      The taxable equivalent net interest income for the three months ended
March 31, 2005, was $24.25 million, a decrease of 8.39% over the same period in
2004. The net interest margin on a fully taxable equivalent basis' was 3.15% for
the three months ended March 31, 2005, compared to 3.53% for the three months
ended March 31, 2004. The impact on net interest margin on a fully taxable
equivalent basis due to the recognition of fees on loans over the life of the
loans was a reduction of fifteen basis points for the three months ended March
31, 2005, versus a reduction of eight basis points for the three months ended
March 31, 2004.

      Total average earning assets increased 3.60% for the three month period
ended March 31, 2005, over the comparative period in 2004. Average loan and
lease outstandings also increased 3.60% for the three month period, compared to
the same period in 2004, due primarily to increased loan outstandings in
commercial loans and medium and heavy duty truck financings offset by decreases
in aircraft and construction equipment financings. Total average investment
securities increased 14.96% for the three month period over one year ago due to
an increase in United States treasury and municipal securities offset by a
reduction in other securities. For the three month period, average mortgages
held for sale decreased 19.33%, as demand for mortgage loans was lower in the
first quarter of 2005. Other investments, which include federal funds sold, time
deposits with other banks and trading account securities, increased for the
three month period over one year ago as excess funds were invested. The taxable
equivalent yields on total average earning assets were 5.12% and 5.18% for the
three month period ended March 31, 2005 and 2004, respectively.

     Average interest-bearing deposits increased 7.66% for the three month
period over the same period in 2004. The rate on average interest-bearing
deposits was 2.26% and 1.92% for the three month periods ended March 31, 2005
and 2004, due to an increase in public funds and brokered deposits. These higher
cost deposits were pursued due to increased funding needs. The rate on average
interest-bearing funds was 2.39% and 1.98% for the three months ended March 31,
2005 and 2004, respectively.

      The following table sets forth consolidated information regarding average
balances and rates.

                                       13
<PAGE>


<TABLE>
<CAPTION>

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY
INTEREST RATES AND INTEREST DIFFERENTIAL
(Dollars in thousands)


                                                            Three  months ended March 31,
                                                         --------------------------------
                                                            2005                            2004
                                          ---------------------------------  ----------------------------
                                                       Interest                          Interest
                                              Average  Income/    Yield/      Average    Income/   Yield/
                                              Balance  Expense    Rate        Balance    Expense   Rate
                                          ---------------------------------  ----------------------------

<S>                                      <C>           <C>        <C>       <C>         <C>        <C>
ASSETS:
  Investment securities:
    Taxable                              $  596,070    $  3,818   2.60%     $  569,634  $  4,289   3.03%
    Tax exempt (1)                          181,472       1,851   4.14%        171,170     1,957   4.60%
  Mortgages - held for sale                  55,214         783   5.75%         68,443       907   5.33%
  Net loans and leases (2 & 3)            2,278,249      32,916   5.86%      2,199,040    31,620   5.78%
  Other investments                          13,744          77   2.27%          7,843        65   3.33%
                                         ---------------------------------  ----------------------------

Total Earning Assets                      3,124,749      39,445   5.12%      3,016,130    38,838   5.18%

  Cash and due from banks                    80,430                             77,275
  Reserve for loan and lease losses         (63,661)                           (70,141)
  Other assets                              197,149                            227,295
                                         ----------                         -----------

Total                                    $3,338,667                         $3,250,559
                                         ==========                         ===========


LIABILITIES AND SHAREHOLDERS' EQUITY:
  Interest-bearing deposits              $2,211,167    $ 12,316   2.26%     $2,053,841  $  9,823   1.92%
  Short-term borrowings                     292,806       1,702   2.36%        380,694     1,257   1.33%
  Subordinated notes                         59,022         964   6.62%         56,444       961   6.85%
  Long-term debt and
     mandatorily redeemable securities       17,923         210   4.75%         23,061       322   5.62%
                                         ---------------------------------  ----------------------------

Total Interest-bearing Liabilities        2,580,918      15,192   2.39%      2,514,040    12,363   1.98%

  Noninterest-bearing deposits              377,925                            359,952
  Other liabilities                          52,289                             58,996
  Shareholders' equity                      327,535                            317,571
                                         ----------                         -----------

Total                                    $3,338,667                         $3,250,559
                                         ==========                         ===========


                                                       --------                         ---------
Net Interest Income                                    $ 24,253                         $ 26,475
                                                       ========                         =========


Net Yield on Earning Assets on a Taxable
                                                                  -----                            -----
 Equivalent Basis                                                 3.15%                            3.53%
                                                                  =====                            =====
</TABLE>

(1)  Interest  income  includes the effects of taxable  equivalent  adjustments,
     using a 35% rate. Tax equivalent  adjustments were $587 in 2005 and $640 in
     2004.

(2)  Loan and lease income  includes  fees on loans and leases of ($196) in 2005
     and $826 in 2004.  Loan and lease  income  also  includes  the  effects  of
     taxable equivalent  adjustments,  using 35% rate for 2005 and 2004. The tax
     equivalent adjustments were $62 in 2005 and $73 in 2004.

(3)  For purposes of this computation, nonaccruing loans and leases are included
     in the daily average loan and lease amounts outstanding.


                                       14
<PAGE>


                 PROVISION AND RESERVE FOR LOAN AND LEASE LOSSES

     The provision for loan and lease losses for the three month periods ended
March 31, 2005 and 2004, was ($0.42) million and $0.10 million, respectively.
Net charge-offs of $0.60 million were recorded for the first quarter 2005,
compared to $0.10 million for the same quarter a year ago.

      In the first quarter 2005, 1st Source continued to experience moderate
improvement in credit quality. Loan and lease delinquencies were 0.57% on March
31, 2005, as compared to 1.17% on March 31, 2004, and 0.70% at the end of 2004.
The reserve for loan and lease losses as a percentage of loans and leases
outstanding at the end of the period was 2.75% as compared to 3.22% one year ago
and 2.79% at December 31, 2004. A summary of loan and lease loss experience
during the three month periods ended March 31, 2005 and 2004, is provided below.

<TABLE>
<CAPTION>
                                                                Summary of Reserve for
                                                                Loan and Lease Losses
                                                             -----------------------------
                                                              Three Months Ended March 31,
                                                             -----------------------------
                                                                   2005           2004
                                                             -------------  --------------
<S>                                                          <C>            <C>
Reserve for loan and lease losses - beginning balance        $    63,672    $    70,045
  Charge-offs                                                     (2,203)        (1,573)
  Recoveries                                                       1,599          1,472
                                                             -------------  --------------
Net charge-offs                                                     (604)          (101)
(Recovery of)/provision for loan and lease losses                   (421)           101
                                                             -------------  --------------
Reserve for loan and lease losses - ending balance           $    62,647    $    70,045
                                                             =============  ==============
Loans and leases outstanding at end of period                $ 2,278,995    $ 2,176,113
Average loans and leases outstanding during period             2,278,249      2,199,040

Reserve for loan and lease losses as a percentage of
  loans and leases outstanding at end of period                    2.75%          3.22%
Ratio of net charge-offs during period to
  average loans and leases outstanding                             0.11%          0.02%
</TABLE>

                              NONPERFORMING ASSETS

Nonperforming assets were as follows:

<TABLE>
<CAPTION>
(Dollars in thousands)
                                                       March 31,    December 31,     March 31,
                                                         2005           2004           2004
                                                    -------------  -------------   -----------


<S>                                                     <C>            <C>           <C>
Loans and leases past due 90 days or more               $    206       $    481      $    230
Nonaccrual and restructured loans and leases              21,281         25,253        23,356
Other real estate                                          1,438          1,307         2,541
Repossessions                                              1,459          4,382         6,234
Equipment owned under operating leases                     1,282          1,785           280

                                                    -------------  -------------   -----------
Total nonperforming assets                              $ 25,666       $ 33,208      $ 32,641
                                                    =============  =============   ===========
</TABLE>


                                       15
<PAGE>

     Nonperforming assets totaled $25.67 million at March 31, 2005, decreasing
22.71% from $33.21 million at December 31, 2004, and decreasing 21.37% from
$32.64 million at March 31, 2004. The decrease during the first quarter 2005 was
primarily related to a decrease in aircraft and construction equipment
nonaccrual loans and leases and repossessed aircraft. Nonperforming assets as a
percentage of total loans and leases improved to 1.10% at March 31, 2005, from
1.42% at December 31, 2004, and 1.45% at March 31, 2004.

     As of March 31, 2005, the Bank had a $3.69 million standby letter of credit
outstanding which supported bond indebtedness of a customer. Due to the current
financial condition of the customer, if this standby letter of credit is funded,
the Bank likely will foreclose on the real estate securing the customer's
reimbursement obligation. This likely will result in an increase in other real
estate for approximately the same amount as the funding.

     Repossessions consist of aircraft, automobiles, light trucks, construction
equipment and environmental equipment at March 31, 2005. At the time of
repossession, the recorded amount of the loan or lease is written down, if
necessary, to the estimated value of the equipment or vehicle by a charge to the
reserve for loan and lease losses, unless the equipment is in the process of
immediate sale. Any subsequent write-downs are included in noninterest expense.

     Repossessed assets are valued by the loan or lease and credit officers of
the Bank or, in certain circumstances, an independent third party. The estimated
value generally is determined on an orderly liquidation basis and is based on a
variety of available sources. These sources typically include vehicle and
equipment dealers, valuation guides and other third parties, including
appraisers. A number of variables can lead to a decrease in value after the
asset is repossessed. These include deterioration in the market value, discovery
of new or additional information about the asset, and validity or invalidity of
other liens against the asset. Valuation adjustments and net (gains) losses upon
disposition of repossessions for the three month period ended March 31, 2005 and
2004, totaled ($0.52) million and $0.14 million, respectively.

Supplemental Loan and Lease Information as of March 31, 2005

<TABLE>
<CAPTION>

(Dollars in thousands)                                                                  Other real estate     Year-to-date
                                                         Loans and leases                   owned and       net credit losses/
                                                          outstanding       Nonaccrual     repossessions       recoveries
                                                         --------------  -------------  -----------------  ----------------

<S>                                                         <C>              <C>                 <C>                 <C>
Commercial and agricultural loans                           $  431,750       $  6,880            $     -             $ (58)
Auto, light truck and environmental equipment                  269,361          2,096                609               472
Medium and heavy duty truck                                    274,097            123                  -                (2)
Aircraft financing                                             423,017          6,666                800              (538)
Construction equipment financing                               200,601          3,805                  -                18
Loans secured by real estate                                   579,388          1,378              1,438               111
Consumer loans                                                 100,781            333                 50               241

                                                         --------------  -------------  -----------------  ----------------
Total                                                       $2,278,995       $ 21,281            $ 2,897             $ 244
                                                         ==============  =============  =================  ================
</TABLE>

For financial statements purposes, non-accrual loans and leases are included in
loan and lease outstandings, whereas repossessions and other real estate are
included in other assets. Net credit losses include net charge-offs on loans and
leases and valuation adjustments and gains and losses on disposition of
repossessions and defaulted operating leases.


                                       16
<PAGE>

                               NONINTEREST INCOME

     Noninterest income for the three-month periods ended March 31, 2005 and
2004, was $17.70 million and $14.02 million, respectively. The predominant
factor behind the increase in 2005 was an increase in mortgage banking income.

<TABLE>
<CAPTION>

(Dollars in thousands)
                                                                 Three Months Ended March 31,
                                                                -----------------------------
                                                                   2005               2004
                                                                -----------------------------
<S>                                                             <C>                 <C>
Noninterest income:
  Trust fees                                                    $  3,246            $  3,090
  Service charges on deposit accounts                              3,963               3,706
  Mortgage banking income                                          2,767                (891)
  Insurance commissions                                            1,164                 962
  Equipment rental income                                          4,015               5,824
  Other income                                                     1,636               1,580
  Investment securities and other investment gains (losses)          904                (252)
                                                                ---------           ---------
Total noninterest income                                        $ 17,695            $ 14,019
                                                                =========           =========
</TABLE>


     Mortgage banking income increased primarily due to mortgage servicing
rights recovery of $1.09 million in the first quarter of 2005 versus impairment
of $3.23 million for the same period in 2004. Mortgage banking income was
negatively impacted during the first quarter of 2005 by reduced origination
volumes and decreased gains on sales of loans into the secondary market as
compared to the first quarter of 2004.

     Trust fees, service charges on deposit accounts, and insurance commission
income increased slightly during the first quarter of 2005 as compared to the
first quarter 2004. Equipment rental income decreased due to the decrease in the
operating lease portfolio. Investment security and other investment gains were
mainly due to the effects of market value adjustments of venture capital
investments.

                               NONINTEREST EXPENSE

     Noninterest expense for the three-month periods ended March 31, 2005 and
2004, was $31.67 million and $32.34 million, respectively. The decrease in
noninterest expense in 2005 was primarily due to decreased loan and lease
collection and repossession expense, offset by increased salaries and employee
benefits and net occupancy expense.


                                       17
<PAGE>

<TABLE>
<CAPTION>

(Dollars in thousands)
                                                          Three Months Ended March 31,
                                                         -----------------------------
                                                            2005               2004
                                                         -----------------------------
<S>                                                      <C>                 <C>
Noninterest expense:
  Salaries and employee benefits                         $ 18,544            $ 15,754
  Net occupancy expense                                     2,102               1,833
  Furniture and equipment expense                           2,642               2,584
  Depreciation - leased equipment                           3,323               4,536
  Professional fees                                           799               1,561
  Supplies and communication                                1,343               1,432
  Business development and marketing expense                  608                 632
  Intangible asset amortization                               658                 658
  Loan and lease collection and
    repossession (recovery)/expense                          (134)              1,055
  Other                                                     1,789               2,297
                                                         ---------           ---------
Total noninterest expense                                $ 31,674            $ 32,342
                                                         =========           =========
</TABLE>

The increase in salaries and employee benefits was caused primarily by higher
executive incentive and compensated absences accruals and increased group
insurance costs for the first quarter 2005 versus the first quarter of 2004.
Professional fees decreased as of March 31, 2005, as compared to March 31, 2004.
The decrease was primarily due to settlement of the lawsuit described in the
2003 Form 10-K Item 3, Legal Proceedings and the associated legal fees. Loan and
lease collection and repossession expense decreased on a year-over-year basis as
gains on disposition of repossessed assets increased and valuation adjustments
related to repossessed assets decreased.

     Net occupancy expense increased for the first quarter of 2005 as compared
to the first quarter of 2004. During the first quarter 2005, 1st Source reviewed
its lease accounting practices in light of the views expressed by the Office of
the Chief Accountant of the SEC in a February 7, 2005 letter to the American
Institute of Certified Public Accountants. As a result of its review, 1st Source
recorded a one-time, net charge of $0.27 million to correct its accounting for
straight-line rent and depreciation of leasehold improvements.

Furniture and equipment expense, supplies and communication, and business
development and marketing expense, all remained comparable to 2004 levels.
Leased equipment depreciation decreased due to the decrease in the operating
lease portfolio. Other expenses increased primarily due to favorable market
value adjustments on derivatives in 2005 versus unfavorable market value
adjustments for 2004.

                                  INCOME TAXES

     The provision for income taxes for the three months ended March 31, 2005,
was $3.10 million, compared to $2.26 million for the comparable period in 2003.
The provision for income taxes for the three months ended March 31, 2005 and
2004, is at a rate which management believes approximates the effective rate for
the year.

                                     ITEM 3.

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     There have been no material changes in market risks faced by 1st Source
since December 31, 2004. For information regarding 1st Source's market risk,
refer to 1st Source's Annual Report on Form 10-K for the year ended December 31,
2004.


                                       18
<PAGE>

                                     ITEM 4.

                             CONTROLS AND PROCEDURES

     As of the end of the period covered by this report, 1st Source carried out
an evaluation, under the supervision and with the participation of 1st Source's
management, including 1st Source's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of 1st Source's
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934) pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that, at March 31, 2005, 1st Source's disclosure controls and
procedures are effective in accumulating and communicating to management
(including such officers) the information relating to 1st Source (including its
consolidated subsidiaries) required to be included in 1st Source's periodic SEC
filings.

     In addition, there were no changes in 1st Source's internal control (as
defined in Exchange Act Rule 13a-15(f))over financial reporting during the first
fiscal quarter of 2005 that have materially affected, or are reasonably likely
to materially affect, 1st Source's internal controls over financial reporting.

                                    PART II.

                                OTHER INFORMATION

ITEM 1.  Legal Proceedings.

     1st Source and its subsidiaries are involved in various legal proceedings
incidental to the conduct of their businesses. Management does not expect that
the outcome of any such proceedings will have a material adverse effect on 1st
Source's consolidated financial position or results of operations.

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

<TABLE>
<CAPTION>

ISSUER PURCHASES OF EQUITY SECURITIES
                                 (a)              (b)                      (c)                                    (d)
                                                                      Total number of              Maximum number (or approximate
                            Total number         Average              shares purchased                dollar value) of shares
                              of shares       price paid per    as part of publicly announced      that may yet be purchased under
Period                        purchased           share               plans or programs                the plans or programs
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>              <C>                     <C>                                    <C>
January 01 - 31, 2005                0               0                        0                                 648,659
February 01 - 28, 2005          35,675           22.69                   35,675                                 612,984
March 01 - 31, 2005                  0               0                        0                                 612,984

</TABLE>

(1)1st Source maintains a stock repurchase plan that was authorized by the
   Board of Directors on October 23, 2001. Under the terms of the plan, 1st
   Source may repurchase up to 1,038,990 shares of its common stock when
   favorable conditions exist on the open market or through private transactions
   at various prices from time to time. Since the inception of the plan, 1st
   Source has repurchased a total of 426,006 shares.


ITEM 3.  Defaults Upon Senior Securities.

         None


                                       19
<PAGE>


ITEM 4.  Submission of Matters to a Vote of Security Holders.

         None

ITEM 5.  Other Information.

         None

ITEM 6.  Exhibits

         The following exhibits are filed with this report:

         1. Exhibit 31.1 Certification of Chief Executive Officer required
              by Rule 13a-14(a).

         2. Exhibit 31.2 Certification of Chief Financial Officer required
              by Rule 13a-14(a).

         3. Exhibit 32.1 Certification pursuant to 18 U.S.C. Section 1350 of
              Chief Executive Officer.

         4. Exhibit 32.2 Certification pursuant to 18 U.S.C. Section 1350 of
              Chief Financial Officer.


                                       20
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                           1st Source Corporation



DATE   April 28, 2005                      /s/CHRISTOPHER J. MURPHY III
- ----   --------------                      ----------------------------
                                           Christopher J. Murphy III
                                           Chairman of the Board,
                                           President and CEO


DATE   April 28, 2005                      /s/LARRY E. LENTYCH
- ----   --------------                      -------------------
                                           Larry E. Lentych
                                           Treasurer and Chief Financial Officer
                                           Principal Accounting Officer



                                       21
<PAGE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>exhibit31_1.txt
<DESCRIPTION>CEO CERTIFICATION
<TEXT>
                                                         Exhibit 31.1

                                 CERTIFICATIONS

I, Christopher J. Murphy III, Chief Executive Officer, certify that:

1.   I  have  reviewed  this  quarterly  report  on  Form  10-Q  of  1st  Source
     Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   Designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial  reporting to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date:  April 28, 2005



/s/CHRISTOPHER J. MURPHY III
- ----------------------------
Christopher J. Murphy III
Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exhibit31_2.txt
<DESCRIPTION>CFO CERTIFICATION
<TEXT>
                                                                   Exhibit 31.2

                                  CERTIFICATION

I, Larry E. Lentych, Chief Financial Officer, certify that:

1.   I  have  reviewed  this  quarterly  report  on  Form  10-Q  of  1st  Source
     Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)  Designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, to ensure that material information relating to the
         registrant, including its consolidated subsidiaries, is made known to
         us by others within those entities, particularly during the period in
         which this report is being prepared;

     b)  Designed such internal control over financial reporting, or caused such
         internal control over financial reporting to be designed under our
         supervision, to provide reasonable assurance regarding the reliability
         of financial reporting and the preparation of financial statements for
         external purposes in accordance with generally accepted accounting
         principles;

     c)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)  All significant deficiencies and material weaknesses in the design or
         operation of internal control over financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date:   April 28, 2005



/s/LARRY E. LENTYCH
- -------------------
Larry E. Lentych
Chief Financial Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exhibit32_1.txt
<DESCRIPTION>CFO CERTIFICATION
<TEXT>
                                                                   EXHIBIT 32.1


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of 1st Source Corporation (1st Source)
on Form 10-Q for the quarterly period ended March 31, 2005, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Christopher J. Murphy III, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that to my knowledge:

     (1)  The Report fully complies with the  requirements  of sections 13(a) or
          15(d) of the Securities and Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of 1st Source.



By:


/s/CHRISTOPHER J. MURPHY III
- ----------------------------
Christopher J. Murphy III
Chief Executive Officer
April 28, 2005


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>exhibit32_2.txt
<DESCRIPTION>CEO CERTIFICATION
<TEXT>
                                                                  EXHIBIT 32.2


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of 1st Source Corporation (1st Source)
on Form 10-Q for the  quarterly  period ended March 31, 2005,  as filed with the
Securities and Exchange  Commission on the date hereof (the "Report"),  I, Larry
E. Lentych,  Chief  Financial  Officer of the Company,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that to my knowledge:


     (1)  The Report fully complies with the  requirements  of sections 13(a) or
          15(d) of the Securities and Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of 1st Source.



By:


/s/LARRY E. LENTYCH
- -------------------
Larry E. Lentych
Chief Financial Officer
April 28, 2005




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
