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| UNITED STATES                                          |
|--------------------------------------------------------|
| SECURITIES AND EXCHANGE COMMISSION                     |
| Washington, D.C. 20549                                 |
|                                                   |
| FORM 10-Q                                              |
| (Mark One)                                             |
| x                                                      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                   | For the quarterly period ended March 31, 2011 |
|                                                   |
| OR                                                     |
| o                                                      | 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                          |
|                                                   |
|                                                        |
| (Exact name of registrant as specified in its charter) |

| INDIANA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |           | 35-1068133                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |           | (I.R.S. Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 100 North Michigan Street                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | South Bend, IN | 46614                                |
| (Address of principle 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.                       x Yes        o No |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    o Yes        o No                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):                                                                                                                                                                                           |

|                                                                                                                                                                                | Large accelerated filer o                                                  | Accelerated filer x         |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|-----------------------------|
|                                                                                                                                                                                | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
|                                                                                                                                                                                |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  o  Yes   x   No |
|                                                                                                                                                                                |
| Number of shares of common stock outstanding as of April 15, 2011 – 24,303,656 shares                                                                                         |

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| TABLE OF CONTENTS             |
|-------------------------------|
|                          |
| PART I. FINANCIAL INFORMATION |
|                          | Page |
| Item 1.                       | Financial Statements (Unaudited) |   |
|                          | Consolidated statements of financial condition – March 31, 2011 and December 31, 2010 | 3 |
|                          | Consolidated statements of income – three months ended March 31, 2011 and 2010 | 4 |
|                          | Consolidated statements of shareholders’ equity – three months ended March 31, 2011 and 2010 | 5 |
|                          | Consolidated statements of cash flows – three months ended March 31, 2011 and 2010 | 6 |
|                          | Notes to the Consolidated Financial Statements | 7 |
| Item 2.                       | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
| Item 3.                       | Quantitative and Qualitative Disclosures About Market Risk | 34 |
| Item 4.                       | Controls and Procedures | 34 |
|                          |
| PART II. OTHER INFORMATION    |
|                          |
| Item 1.                       | Legal Proceedings | 34 |
| Item 1A.                      | Risk Factors | 34 |
| Item 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds | 35 |
| Item 3.                       | Defaults Upon Senior Securities | 35 |
| Item 4.                       | (Removed and reserved) | 35 |
| Item 5.                       | Other Information | 35 |
| Item 6.                       | Exhibits | 35 |
|                          |
| SIGNATURES                    |   | 36 |
|                          |
| CERTIFICATIONS                |   |   |
|                          |   |   |
| Exhibit 31.1                  |   |   |
| Exhibit 31.2                  |   |   |
| Exhibit 32.1                  |   |   |
| Exhibit 32.2                  |   |   |

----

Table of Contents

| 1st SOURCE CORPORATION                                                      |   |      |      |   |         |   |
|-----------------------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION                              |   |      |      |   |         |   |
| (Unaudited - Dollars in thousands)                                          |   |      |      |   |         |   |
|                                                                        |   | March 31, |      |   | December 31, |   |
|                                                                        |   | 2011      |      |   | 2010         |   |
| ASSETS                                                                      |   |      |      |   |         |   |
| Cash and due from banks                                                     |   | $         | 57,271    |   |         | $      | 62,313 |   |
| Federal funds sold and                                                      |   |      |      |   |         |   |   |   |
| interest bearing deposits with other banks                                  |   |      | 81,661    |   |         |   | 34,559 |   |
| Investment securities available-for-sale                                    |   |      |      |   |         |   |   |   |
| (amortized cost of $927,522 and $952,101                                    |   |      |      |   |         |   |   |   |
| at March 31, 2011 and December 31, 2010, respectively)                      |   |      | 942,221   |   |         |   | 969,018 |   |
| Other investments                                                           |   |      | 20,503    |   |         |   | 21,343 |   |
| Trading account securities                                                  |   |      | 146       |   |         |   | 138 |   |
| Mortgages held for sale                                                     |   |      | 5,467     |   |         |   | 32,599 |   |
| Loans and leases - net of unearned discount                                 |   |      |      |   |         |   |   |   |
| Commercial and agricultural loans                                           |   |      | 547,381   |   |         |   | 530,228 |   |
| Auto, light truck and environmental equipment                               |   |      | 416,957   |   |         |   | 396,500 |   |
| Medium and heavy duty truck                                                 |   |      | 156,022   |   |         |   | 162,824 |   |
| Aircraft financing                                                          |   |      | 601,480   |   |         |   | 614,357 |   |
| Construction equipment financing                                            |   |      | 271,490   |   |         |   | 285,634 |   |
| Commercial real estate                                                      |   |      | 578,648   |   |         |   | 594,729 |   |
| Residential real estate                                                     |   |      | 386,290   |   |         |   | 390,951 |   |
| Consumer loans                                                              |   |      | 93,450    |   |         |   | 95,400 |   |
| Total loans and leases                                                      |   |      | 3,051,718 |   |         |   | 3,070,623 |   |
| Reserve for loan and lease losses                                           |   |      | (86,160   | )      |         |   | (86,874 | ) |
| Net loans and leases                                                        |   |      | 2,965,558 |   |         |   | 2,983,749 |   |
| Equipment owned under operating leases, net                                 |   |      | 81,304    |   |         |   | 78,138 |   |
| Net premises and equipment                                                  |   |      | 36,024    |   |         |   | 33,881 |   |
| Goodwill and intangible assets                                              |   |      | 88,650    |   |         |   | 88,955 |   |
| Accrued income and other assets                                             |   |      | 133,571   |   |         |   | 140,588 |   |
| Total assets                                                                |   |      | 4,412,376 |   |         |   | 4,445,281 |   |
|                                                                        |   |      |      |   |         |   |   |   |
| LIABILITIES                                                                 |   |      |      |   |         |   |   |   |
| Deposits:                                                                   |   |      |      |   |         |   |   |   |
| Noninterest bearing                                                         |   | $         | 513,315   |   |         | $      | 524,564 |   |
| Interest bearing                                                            |   |      | 3,095,692 |   |         |   | 3,098,181 |   |
| Total deposits                                                              |   |      | 3,609,007 |   |         |   | 3,622,745 |   |
| Short-term borrowings:                                                      |   |      |      |   |         |   |   |   |
| Federal funds purchased and securities                                      |   |      |      |   |         |   |   |   |
| sold under agreements to repurchase                                         |   |      | 112,914   |   |         |   | 136,028 |   |
| Other short-term borrowings                                                 |   |      | 19,239    |   |         |   | 19,961 |   |
| Total short-term borrowings                                                 |   |      | 132,153   |   |         |   | 155,989 |   |
| Long-term debt and mandatorily redeemable securities                        |   |      | 26,717    |   |         |   | 24,816 |   |
| Subordinated notes                                                          |   |      | 89,692    |   |         |   | 89,692 |   |
| Accrued expenses and other liabilities                                      |   |      | 64,340    |   |         |   | 65,656 |   |
| Total liabilities                                                           |   |      | 3,921,909 |   |         |   | 3,958,898 |   |
|                                                                        |   |      |      |   |         |   |   |   |
| SHAREHOLDERS' EQUITY                                                        |   |      |      |   |         |   |   |   |
| Preferred stock; no par value                                               |   |      |      |   |         |   |   |   |
| Authorized 10,000,000 shares; none issued or outstanding                    |   |      | -         |   |         |   | - |   |
| Common stock; no par value                                                  |   |      |      |   |         |   |   |   |
| Authorized 40,000,000 shares; issued 25,643,506 at March 31, 2011           |   |      |      |   |         |   |   |   |
| and December 31, 2010                                                       |   |      | 346,535   |   |         |   | 350,282 |   |
| Retained earnings                                                           |   |      | 164,455   |   |         |   | 157,875 |   |
| Cost of common stock in treasury (1,339,860 shares at March 31, 2011 and    |   |      |      |   |         |   |   |   |
| 1,470,696 shares at December 31, 2010)                                      |   |      | (29,655   | )      |         |   | (32,284 | ) |
| Accumulated other comprehensive income                                      |   |      | 9,132     |   |         |   | 10,510 |   |
| Total shareholders' equity                                                  |   |      | 490,467   |   |         |   | 486,383 |   |
| Total liabilities and shareholders' equity                                  |   | $         | 4,412,376 |   |         | $      | 4,445,281 |   |
|                                                                        |   |      |      |   |         |   |   |   |
| The accompanying notes are a part of the consolidated financial statements. |   |      |      |   |         |   |   |   |

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Table of Contents

| 1st SOURCE CORPORATION                                                      |   |               |       |   |   |   |
|-----------------------------------------------------------------------------|--------|--------------------|------------|--------|--------|--------|
| CONSOLIDATED STATEMENTS OF INCOME                                           |   |               |       |   |   |   |
| (Unaudited - Dollars in thousands, except per share amounts)                |   |               |       |   |   |   |
|                                                                        |   | Three Months Ended |       |
|                                                                        |   | March 31,          |       |
|                                                                        |   | 2011               |       |   | 2010   |   |
| Interest income:                                                            |   |               |       |   |   |   |
| Loans and leases                                                            |   | $                  | 41,299     |   |   | $      | 42,270 |   |
| Investment securities, taxable                                              |   |               | 4,482      |   |   |   | 5,401 |   |
| Investment securities, tax-exempt                                           |   |               | 1,186      |   |   |   | 1,467 |   |
| Other                                                                       |   |               | 243        |   |   |   | 274 |   |
| Total interest income                                                       |   |               | 47,210     |   |   |   | 49,412 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| Interest expense:                                                           |   |               |       |   |   |   |   |   |
| Deposits                                                                    |   |               | 8,355      |   |   |   | 12,405 |   |
| Short-term borrowings                                                       |   |               | 89         |   |   |   | 188 |   |
| Subordinated notes                                                          |   |               | 1,647      |   |   |   | 1,647 |   |
| Long-term debt and mandatorily redeemable securities                        |   |               | 259        |   |   |   | 270 |   |
| Total interest expense                                                      |   |               | 10,350     |   |   |   | 14,510 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| Net interest income                                                         |   |               | 36,860     |   |   |   | 34,902 |   |
| Provision for loan and lease losses                                         |   |               | 2,198      |   |   |   | 4,388 |   |
| Net interest income after provision for                                     |   |               |       |   |   |   |   |   |
| loan and lease losses                                                       |   |               | 34,662     |   |   |   | 30,514 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| Noninterest income:                                                         |   |               |       |   |   |   |   |   |
| Trust fees                                                                  |   |               | 3,992      |   |   |   | 3,745 |   |
| Service charges on deposit accounts                                         |   |               | 4,236      |   |   |   | 4,620 |   |
| Mortgage banking income                                                     |   |               | 444        |   |   |   | 777 |   |
| Insurance commissions                                                       |   |               | 1,142      |   |   |   | 1,465 |   |
| Equipment rental income                                                     |   |               | 6,038      |   |   |   | 6,745 |   |
| Other income                                                                |   |               | 2,971      |   |   |   | 2,689 |   |
| Investment securities and other investment gains                            |   |               | 130        |   |   |   | 881 |   |
| Total noninterest income                                                    |   |               | 18,953     |   |   |   | 20,922 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| Noninterest expense:                                                        |   |               |       |   |   |   |   |   |
| Salaries and employee benefits                                              |   |               | 18,638     |   |   |   | 18,810 |   |
| Net occupancy expense                                                       |   |               | 2,320      |   |   |   | 2,487 |   |
| Furniture and equipment expense                                             |   |               | 3,349      |   |   |   | 2,800 |   |
| Depreciation - leased equipment                                             |   |               | 4,805      |   |   |   | 5,364 |   |
| Professional fees                                                           |   |               | 1,096      |   |   |   | 1,514 |   |
| Supplies and communication                                                  |   |               | 1,394      |   |   |   | 1,369 |   |
| FDIC and other insurance                                                    |   |               | 1,676      |   |   |   | 1,674 |   |
| Business development and marketing expense                                  |   |               | 622        |   |   |   | 567 |   |
| Loan and lease collection and repossession expense                          |   |               | 1,324      |   |   |   | 1,106 |   |
| Other expense                                                               |   |               | 3,252      |   |   |   | 1,419 |   |
| Total noninterest expense                                                   |   |               | 38,476     |   |   |   | 37,110 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| Income before income taxes                                                  |   |               | 15,139     |   |   |   | 14,326 |   |
| Income tax expense                                                          |   |               | 4,531      |   |   |   | 4,647 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| Net income                                                                  |   |               | 10,608     |   |   |   | 9,679 |   |
| Preferred stock dividends and discount accretion                            |   |               | -          |   |   |   | (1,711 | ) |
| Net income available to common shareholders                                 |   | $                  | 10,608     |   |   | $      | 7,968 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| Per common share                                                            |   |               |       |   |   |   |   |   |
| Basic net income per common share                                           |   | $                  | 0.43       |   |   | $      | 0.33 |   |
| Diluted net income per common share                                         |   | $                  | 0.43       |   |   | $      | 0.33 |   |
| Dividends                                                                   |   | $                  | 0.16       |   |   | $      | 0.15 |   |
| Basic weighted average common shares outstanding                            |   |               | 24,271,366 |   |   |   | 24,210,242 |   |
| Diluted weighted average common shares outstanding                          |   |               | 24,279,517 |   |   |   | 24,215,506 |   |
|                                                                        |   |               |       |   |   |   |   |   |
| The accompanying notes are a part of the consolidated financial statements. |   |               |       |   |   |   |   |   |

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Table of Contents

| 1st SOURCE CORPORATION                                                      |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |
|-----------------------------------------------------------------------------|--------|--------|---------|--------|-----------|--------|---------|--------|--------|--------|----------|--------|--------|-------------|---------|--------|--------------------|--------|
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                             |   |   |    |   |      |   |    |   |   |   |     |   |   |
| (Unaudited - Dollars in thousands, except per share amounts)                |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |
|                                                                        |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |
|                                                                        |   |   |    |   |      |   |    |   |   |   |     |   |   | Cost of     |    |   | Accumulated        |   |
|                                                                        |   |   |    |   |      |   |    |   |   |   |     |   |   | Common      |    |   | Other              |   |
|                                                                        |   |   |    |   | Preferred |   |    | Common |   |   | Retained |   |   | Stock       |    |   | Comprehensive      |   |
|                                                                        |   | Total  |    |   | Stock     |   |    | Stock  |   |   | Earnings |   |   | in Treasury |    |   | Income (Loss), Net |   |
| Balance at January 1, 2010                                                  |   | $      | 570,320 |   |      | $      | 104,930 |   |   | $      | 350,269  |   |   | $           | 142,407 |   |               | $      | (32,380 | ) |   | $ | 5,094 |   |
| Comprehensive Income, net of tax:                                           |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| Net Income                                                                  |   |   | 9,679   |   |      |   | -       |   |   |   | -        |   |   |        | 9,679   |   |               |   | - |   |   |   | - |   |
| Change in unrealized appreciation                                           |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| of available-for-sale securities, net of tax                                |   |   | 1,578   |   |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | - |   |   |   | 1,578 |   |
| Reclassification adjustment for gains                                       |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| included in net income, net of tax                                          |   |   | (174    | )      |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | - |   |   |   | (174 | ) |
| Total Comprehensive Income                                                  |   |   | 11,083  |   |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | - |   |   |   | - |   |
| Issuance of 182,934 common shares                                           |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| under stock based compensation awards,                                      |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| including related tax effects                                               |   |   | 2,778   |   |      |   | -       |   |   |   | -        |   |   |        | 632     |   |               |   | 2,146 |   |   |   | - |   |
| Cost of 7,269 shares of common                                              |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| stock acquired for treasury                                                 |   |   | (114    | )      |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | (114 | ) |   |   | - |   |
| Preferred stock discount accretion                                          |   |   | -       |   |      |   | 324     |   |   |   | -        |   |   |        | (324    | )      |               |   | - |   |   |   | - |   |
| Preferred stock dividend (paid and/or accrued)                              |   |   | (1,387  | )      |      |   | -       |   |   |   | -        |   |   |        | (1,387  | )      |               |   | - |   |   |   | - |   |
| Common stock dividend ($0.15 per share)                                     |   |   | (3,626  | )      |      |   | -       |   |   |   | -        |   |   |        | (3,626  | )      |               |   | - |   |   |   | - |   |
| Stock based compensation                                                    |   |   | 3       |   |      |   | -       |   |   |   | 3        |   |   |        | -       |   |               |   | - |   |   |   | - |   |
| Balance at March 31, 2010                                                   |   | $      | 579,057 |   |      | $      | 105,254 |   |   | $      | 350,272  |   |   | $           | 147,381 |   |               | $      | (30,348 | ) |   | $ | 6,498 |   |
|                                                                        |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| Balance at January 1, 2011                                                  |   | $      | 486,383 |   |      | $      | -       |   |   | $      | 350,282  |   |   | $           | 157,875 |   |               | $      | (32,284 | ) |   | $ | 10,510 |   |
| Comprehensive Income, net of tax:                                           |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| Net Income                                                                  |   |   | 10,608  |   |      |   | -       |   |   |   | -        |   |   |        | 10,608  |   |               |   | - |   |   |   | - |   |
| Change in unrealized appreciation                                           |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| of available-for-sale securities, net of tax                                |   |   | (1,250  | )      |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | - |   |   |   | (1,250 | ) |
| Reclassification adjustment for gains                                       |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| included in net income, net of tax                                          |   |   | (128    | )      |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | - |   |   |   | (128 | ) |
| Total Comprehensive Income                                                  |   |   | 9,230   |   |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | - |   |   |   | - |   |
| Issuance of 139,736 common shares                                      |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| under stock based compensation awards,                                      |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| including related tax effects                                               |   |   | 2,666   |   |      |   | -       |   |   |   | -        |   |   |        | (126    | )      |               |   | 2,792 |   |   |   | - |   |
| Cost of 8,900 shares of common                                              |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| stock acquired for treasury                                                 |   |   | (163    | )      |      |   | -       |   |   |   | -        |   |   |        | -       |   |               |   | (163 | ) |   |   | - |   |
| Repurchase of common stock warrant                                          |   |   | (3,750  | )      |      |   | -       |   |   |   | (3,750   | )      |   |        | -       |   |               |   | - |   |   |   | - |   |
| Common stock dividend ($0.16 per share)                                     |   |   | (3,902  | )      |      |   | -       |   |   |   | -        |   |   |        | (3,902  | )      |               |   | - |   |   |   | - |   |
| Stock based compensation                                                    |   |   | 3       |   |      |   | -       |   |   |   | 3        |   |   |        | -       |   |               |   | - |   |   |   | - |   |
| Balance at March 31, 2011                                                   |   | $      | 490,467 |   |      | $      | -       |   |   | $      | 346,535  |   |   | $           | 164,455 |   |               | $      | (29,655 | ) |   | $ | 9,132 |   |
|                                                                        |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |   |   |   |   |   |   |   |
| The accompanying notes are a part of the consolidated financial statements. |   |   |    |   |      |   |    |   |   |   |     |   |   |        |    |   |               |

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| 1st SOURCE CORPORATION                                                      |   |                         |     |   |   |   |
|-----------------------------------------------------------------------------|--------|------------------------------|----------|--------|--------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                       |   |                         |     |   |   |   |
| (Unaudited - Dollars in thousands)                                          |   |                         |     |   |   |   |
|                                                                        |   | Three Months Ended March 31, |     |
|                                                                        |   | 2011                         |     |   | 2010   |   |
| Operating activities:                                                       |   |                         |     |   |   |   |
| Net income                                                                  |   | $                            | 10,608   |   |   | $      | 9,679 |   |
| Adjustments to reconcile net income to net cash                             |   |                         |     |   |   |   |   |   |
| provided (used) by operating activities:                                    |   |                         |     |   |   |   |   |   |
| Provision for loan and lease losses                                         |   |                         | 2,198    |   |   |   | 4,388 |   |
| Depreciation of premises and equipment                                      |   |                         | 873      |   |   |   | 1,182 |   |
| Depreciation of equipment owned and leased to others                        |   |                         | 4,805    |   |   |   | 5,364 |   |
| Amortization of investment security premiums                                |   |                         |     |   |   |   |   |   |
| and accretion of discounts, net                                             |   |                         | 485      |   |   |   | 668 |   |
| Amortization of mortgage servicing rights                                   |   |                         | 734      |   |   |   | 761 |   |
| Mortgage servicing asset impairment (recovery)                              |   |                         | 5        |   |   |   | (1 | ) |
| Deferred income taxes                                                       |   |                         | (297     | )      |   |   | 948 |   |
| Investment securities and other investment gains                            |   |                         | (130     | )      |   |   | (881 | ) |
| Originations/purchases of loans held for sale, net of principal collected   |   |                         | (25,343  | )      |   |   | (50,208 | ) |
| Proceeds from the sales of loans held for sale                              |   |                         | 52,560   |   |   |   | 54,303 |   |
| Net gain on sale of loans held for sale                                     |   |                         | (85      | )      |   |   | (512 | ) |
| Change in trading account securities                                        |   |                         | (8       | )      |   |   | (5 | ) |
| Change in interest receivable                                               |   |                         | (116     | )      |   |   | 75 |   |
| Change in interest payable                                                  |   |                         | 1,905    |   |   |   | 1,110 |   |
| Change in other assets                                                      |   |                         | 6,701    |   |   |   | (1,337 | ) |
| Change in other liabilities                                                 |   |                         | (2,083   | )      |   |   | 8,573 |   |
| Other                                                                       |   |                         | 1,696    |   |   |   | 15 |   |
| Net change in operating activities                                          |   |                         | 54,508   |   |   |   | 34,122 |   |
|                                                                        |   |                         |     |   |   |   |   |   |
| Investing activities:                                                       |   |                         |     |   |   |   |   |   |
| Proceeds from sales of investment securities                                |   |                         | 66,989   |   |   |   | 71,579 |   |
| Proceeds from maturities of investment securities                           |   |                         | 67,756   |   |   |   | 123,734 |   |
| Purchases of investment securities                                          |   |                         | (110,522 | )      |   |   | (180,063 | ) |
| Net change in other investments                                             |   |                         | 840      |   |   |   | 1,403 |   |
| Loans sold or participated to others                                        |   |                         | 4,010    |   |   |   | 4,586 |   |
| Net change in loans and leases                                              |   |                         | 11,983   |   |   |   | (22,348 | ) |
| Net change in equipment owned under operating leases                        |   |                         | (7,971   | )      |   |   | (586 | ) |
| Purchases of premises and equipment                                         |   |                         | (3,047   | )      |   |   | (857 | ) |
| Net change in investing activities                                          |   |                         | 30,038   |   |   |   | (2,552 | ) |
|                                                                        |   |                         |     |   |   |   |   |   |
| Financing activities:                                                       |   |                         |     |   |   |   |   |   |
| Net change in demand deposits, NOW                                          |   |                         |     |   |   |   |   |   |
| accounts and savings accounts                                               |   |                         | (33,730  | )      |   |   | (69,419 | ) |
| Net change in certificates of deposit                                       |   |                         | 19,992   |   |   |   | (43,915 | ) |
| Net change in short-term borrowings                                         |   |                         | (23,836  | )      |   |   | (8,964 | ) |
| Proceeds from issuance of long-term debt                                    |   |                         | 417      |   |   |   | 5,303 |   |
| Payments on long-term debt                                                  |   |                         | (114     | )      |   |   | (139 | ) |
| Net proceeds from issuance of treasury stock                                |   |                         | 2,666    |   |   |   | 2,778 |   |
| Acquisition of treasury stock                                               |   |                         | (163     | )      |   |   | (114 | ) |
| Repurchase of common stock warrant                                          |   |                         | (3,750   | )      |   |   | - |   |
| Cash dividends paid on preferred stock                                      |   |                         | -        |   |   |   | (1,387 | ) |
| Cash dividends paid on common stock                                         |   |                         | (3,968   | )      |   |   | (3,690 | ) |
| Net change in financing activities                                          |   |                         | (42,486  | )      |   |   | (119,547 | ) |
|                                                                        |   |                         |     |   |   |   |   |   |
| Net change in cash and cash equivalents                                     |   |                         | 42,060   |   |   |   | (87,977 | ) |
|                                                                        |   |                         |     |   |   |   |   |   |
| Cash and cash equivalents, beginning of year                                |   |                         | 96,872   |   |   |   | 210,102 |   |
|                                                                        |   |                         |     |   |   |   |   |   |
| Cash and cash equivalents, end of period                                    |   | $                            | 138,932  |   |   | $      | 122,125 |   |
|                                                                        |   |                         |     |   |   |   |   |   |
| Non-cash transactions:                                                      |   |                         |     |   |   |   |   |   |
| Loans transferred to other real estate and repossessed assets               |   | $                            | 3,931    |   |   | $      | 4,242 |   |
| Common stock matching contribution to KSOP plan                             |   |                         | 2,420    |   |   |   | 2,545 |   |
|                                                                        |   |                         |     |   |   |   |   |   |
| The accompanying notes are a part of the consolidated financial statements. |   |                         |     |   |   |   |   |   |

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1ST 

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| (Dollars in thousands)                              |   | Amortized |    |   | Gross            |   |   | Gross             |   |   |       |   |
|-----------------------------------------------------|--------|-----------|---------|--------|------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                                |   | Cost      |    |   | Unrealized Gains |   |   | Unrealized Losses |   |   | Fair Value |   |
| March 31, 2011                                      |   |      |    |   |             |   |   |              |   |   |       |   |
| U.S. Treasury and Federal agencies securities       |   | $         | 434,510 |   |             | $      | 4,461  |              |   | $      | (1,328     | )      |   | $ | 437,643 |   |
| U.S. States and political subdivisions securities   |   |      | 120,814 |   |             |   | 4,153  |              |   |   | (1,103     | )      |   |   | 123,864 |   |
| Mortgage-backed securities – Federal agencies |   |      | 327,458 |   |             |   | 6,741  |              |   |   | (441       | )      |   |   | 333,758 |   |
| Corporate debt securities                           |   |      | 35,677  |   |             |   | 167    |              |   |   | (249       | )      |   |   | 35,595 |   |
| Foreign government and other securities             |   |      | 6,717   |   |             |   | 23     |              |   |   | (51        | )      |   |   | 6,689 |   |
| Total debt securities                               |   |      | 925,176 |   |             |   | 15,545 |              |   |   | (3,172     | )      |   |   | 937,549 |   |
| Marketable equity securities                        |   |      | 2,346   |   |             |   | 2,329  |              |   |   | (3         | )      |   |   | 4,672 |   |
| Total investment securities available-for-sale      |   | $         | 927,522 |   |             | $      | 17,874 |              |   | $      | (3,175     | )      |   | $ | 942,221 |   |
|                                                |   |      |    |   |             |   |   |              |   |   |       |   |   |   |   |   |
| December 31, 2010                                   |   |      |    |   |             |   |   |              |   |   |       |   |   |   |   |   |
| U.S. Treasury and Federal agencies securities       |   | $         | 442,612 |   |             | $      | 5,546  |              |   | $      | (849       | )      |   | $ | 447,309 |   |
| U.S. States and political subdivisions securities   |   |      | 147,679 |   |             |   | 4,381  |              |   |   | (1,753     | )      |   |   | 150,307 |   |
| Mortgage-backed securities – Federal agencies |   |      | 309,046 |   |             |   | 7,854  |              |   |   | (232       | )      |   |   | 316,668 |   |
| Corporate debt securities                           |   |      | 45,778  |   |             |   | 182    |              |   |   | (345       | )      |   |   | 45,615 |   |
| Foreign government and other securities             |   |      | 5,732   |   |             |   | 18     |              |   |   | (34        | )      |   |   | 5,716 |   |
| Total debt securities                               |   |      | 950,847 |   |             |   | 17,981 |              |   |   | (3,213     | )      |   |   | 965,615 |   |
| Marketable equity securities                        |   |      | 1,254   |   |             |   | 2,152  |              |   |   | (3         | )      |   |   | 3,403 |   |
| Total investment securities available-for-sale      |   | $         | 952,101 |   |             | $      | 20,133 |              |   | $      | (3,216     | )      |   | $ | 969,018 |   |

| (Dollars in thousands)                   |   |           |    |   |       |   |
|------------------------------------------|--------|----------------|---------|--------|------------|--------|
|                                     |   | Amortized Cost |    |   | Fair Value |   |
| Due in one year or less                  |   | $              | 40,341  |   |       | $      | 40,737 |   |
| Due after one year through five years    |   |           | 437,823 |   |       |   | 442,361 |   |
| Due after five years through ten years   |   |           | 108,324 |   |       |   | 110,481 |   |
| Due after ten years                      |   |           | 11,230  |   |       |   | 10,212 |   |
| Mortgage-backed securities               |   |           | 327,458 |   |       |   | 333,758 |   |
| Total debt securities available-for-sale |   | $              | 925,176 |   |       | $      | 937,549 |   |

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| (Dollars in thousands)      |   | Three Months Ended |   |
|-----------------------------|--------|--------------------|--------|
|                        |   | March 31,          |   |
|                        |   | 2011               |   |   | 2010 |   |
| Gross realized gains        |   | $                  | 445    |   |   | $ | 292 |   |
| Gross realized losses       |   |               | (238   | ) |   |   | (12 | ) |
| Net realized gains (losses) |   | $                  | 207    |   |   | $ | 280 |   |

|                                              |   | Less than 12 Months |    |   | 12 months or Longer |   |   | Total  |   |
|---------------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|--------|--------|--------|
| (Dollars in thousands)                            |   | Fair                |    |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                              |   | Value               |    |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| March 31, 2011                                    |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and Federal agencies securities     |   | $                   | 156,626 |   |                | $      | (1,328 | )      |   | $ | - |   |   | $ | - |   |   | $ | 156,626 |   |   | $ | (1,328 | ) |
| U.S. States and political subdivisions securities |   |                | 7,447   |   |                |   | (132   | )      |   |   | 9,591 |   |   |   | (971 | ) |   |   | 17,038 |   |   |   | (1,103 | ) |
| Mortgage-backed securities - Federal agencies     |   |                | 36,872  |   |                |   | (408   | )      |   |   | 4,450 |   |   |   | (33 | ) |   |   | 41,322 |   |   |   | (441 | ) |
| Corporate debt securities                         |   |                | 26,398  |   |                |   | (249   | )      |   |   | - |   |   |   | - |   |   |   | 26,398 |   |   |   | (249 | ) |
| Foreign government and other securities           |   |                | 2,962   |   |                |   | (51    | )      |   |   | - |   |   |   | - |   |   |   | 2,962 |   |   |   | (51 | ) |
| Total debt securities                             |   |                | 230,305 |   |                |   | (2,168 | )      |   |   | 14,041 |   |   |   | (1,004 | ) |   |   | 244,346 |   |   |   | (3,172 | ) |
| Marketable equity securities                      |   |                | -       |   |                |   | -      |   |   |   | 5 |   |   |   | (3 | ) |   |   | 5 |   |   |   | (3 | ) |
| Total investment securities available-for-sale    |   | $                   | 230,305 |   |                | $      | (2,168 | )      |   | $ | 14,046 |   |   | $ | (1,007 | ) |   | $ | 244,351 |   |   | $ | (3,175 | ) |
|                                              |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010                                 |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and Federal agencies securities     |   | $                   | 158,497 |   |                | $      | (849   | )      |   | $ | - |   |   | $ | - |   |   | $ | 158,497 |   |   | $ | (849 | ) |
| U.S. States and political subdivisions securities |   |                | 9,226   |   |                |   | (246   | )      |   |   | 9,055 |   |   |   | (1,507 | ) |   |   | 18,281 |   |   |   | (1,753 | ) |
| Mortgage-backed securities - Federal agencies     |   |                | 23,351  |   |                |   | (213   | )      |   |   | 4,887 |   |   |   | (19 | ) |   |   | 28,238 |   |   |   | (232 | ) |
| Corporate debt securities                         |   |                | 26,407  |   |                |   | (345   | )      |   |   | - |   |   |   | - |   |   |   | 26,407 |   |   |   | (345 | ) |
| Foreign government and other securities           |   |                | 3,015   |   |                |   | (34    | )      |   |   | - |   |   |   | - |   |   |   | 3,015 |   |   |   | (34 | ) |
| Total debt securities                             |   |                | 220,496 |   |                |   | (1,687 | )      |   |   | 13,942 |   |   |   | (1,526 | ) |   |   | 234,438 |   |   |   | (3,213 | ) |
| Marketable equity securities                      |   |                | -       |   |                |   | -      |   |   |   | 5 |   |   |   | (3 | ) |   |   | 5 |   |   |   | (3 | ) |
| Total investment securities available-for-sale    |   | $                   | 220,496 |   |                | $      | (1,687 | )      |   | $ | 13,947 |   |   | $ | (1,529 | ) |   | $ | 234,443 |   |   | $ | (3,216 | ) |

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|                              |   |   |      |   |   |   |    |   |   |
|-----------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| (Dollars in thousands)            |   | Grade: |      |
|                              |   |   | 1-6       |   |   |   | 7-12    |   |   | Total |   |
| March 31, 2011                    |   |   |      |   |   |   |    |   |   |   |   |
| Commercial and agricultural loans |   | $      | 504,137   |   |   | $      | 43,244  |   |   | $ | 547,381 |   |
| Auto, light truck,                |   |   |      |   |   |   |    |   |   |   |   |   |
| and environmental equipment       |   |   | 412,155   |   |   |   | 4,802   |   |   |   | 416,957 |   |
| Medium and heavy duty truck       |   |   | 135,750   |   |   |   | 20,272  |   |   |   | 156,022 |   |
| Aircraft financing                |   |   | 546,740   |   |   |   | 54,740  |   |   |   | 601,480 |   |
| Construction equipment financing  |   |   | 240,214   |   |   |   | 31,276  |   |   |   | 271,490 |   |
| Commercial real estate            |   |   | 518,801   |   |   |   | 59,847  |   |   |   | 578,648 |   |
| Total                             |   | $      | 2,357,797 |   |   | $      | 214,181 |   |   | $ | 2,571,978 |   |
|                              |   |   |      |   |   |   |    |   |   |   |   |   |
| December 31, 2010                 |   |   |      |   |   |   |    |   |   |   |   |   |
| Commercial and agricultural loans |   | $      | 483,603   |   |   | $      | 46,625  |   |   | $ | 530,228 |   |
| Auto, light truck,                |   |   |      |   |   |   |    |   |   |   |   |   |
| and environmental equipment       |   |   | 389,774   |   |   |   | 6,726   |   |   |   | 396,500 |   |
| Medium and heavy duty truck       |   |   | 143,431   |   |   |   | 19,393  |   |   |   | 162,824 |   |
| Aircraft financing                |   |   | 555,106   |   |   |   | 59,251  |   |   |   | 614,357 |   |
| Construction equipment financing  |   |   | 246,644   |   |   |   | 38,990  |   |   |   | 285,634 |   |
| Commercial real estate            |   |   | 532,581   |   |   |   | 62,148  |   |   |   | 594,729 |   |
| Total                             |   | $      | 2,351,139 |   |   | $      | 233,133 |   |   | $ | 2,584,272 |   |

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| (Dollars in thousands)  |   |       |    |   |          |   |   |   |   |
|-------------------------|--------|------------|---------|--------|---------------|--------|--------|--------|--------|
|                    |   | Performing |    |   | Nonperforming |   |   | Total  |   |
| March 31, 2011          |   |       |    |   |          |   |   |   |   |
| Residential real estate |   | $          | 380,796 |   |          | $      | 5,494  |   |   | $ | 386,290 |   |
| Consumer                |   |       | 92,882  |   |          |   | 568    |   |   |   | 93,450 |   |
| Total                   |   | $          | 473,678 |   |          | $      | 6,062  |   |   | $ | 479,740 |   |
|                    |   |       |    |   |          |   |   |   |   |   |   |   |
| December 31, 2010       |   |       |    |   |          |   |   |   |   |   |   |   |
| Residential real estate |   | $          | 385,729 |   |          | $      | 5,222  |   |   | $ | 390,951 |   |
| Consumer                |   |       | 94,973  |   |          |   | 427    |   |   |   | 95,400 |   |
| Total                   |   | $          | 480,702 |   |          | $      | 5,649  |   |   | $ | 486,351 |   |

|                              |   |       |   |       |   |     |   |       |   |       |   |    |   |            |   | Recorded     |   |
|-----------------------------------|--------|------------|--------|------------|--------|----------|--------|------------|--------|------------|--------|---------|--------|-----------------|--------|--------------|--------|
|                              |   |       |   |       |   | 90 Days  |   |       |   |       |   |    |   | Total      |   | Investment   |   |
| (Dollars in thousands)            |   | 30-59 Days |   | 60-89 Days |   | or More  |   | Total Past |   |       |   |    |   |  Financing |   | > 90 Days |   |
|                              |   | Past Due   |   | Past Due   |   | Past Due |   | Due        |   | Nonaccrual |   | Current |   | Receivables     |   | and Accruing |   |
| March 31, 2011                    |   |       |   |       |   |     |   |       |   |       |   |    |   |            |   |         |   |
| Commercial and agricultural loans |   | $          | 498    |       | $      | 202      |   | $          | -      |       | $      | 700     |   | $               | 7,987  |         | $      | 538,694 |   | $ | 547,381 |   | $ | - |   |
| Auto, light truck and             |   |       |   |       |   |     |   |       |   |       |   |    |   |            |   |         |   |   |   |   |   |   |   |   |   |
| environmental equipment           |   |       | 726    |       |   | 216      |   |       | -      |       |   | 942     |   |            | 2,825  |         |   | 413,190 |   |   | 416,957 |   |   | - |   |
| Medium and heavy duty truck       |   |       | 51     |       |   | -        |   |       | -      |       |   | 51      |   |            | 4,662  |         |   | 151,309 |   |   | 156,022 |   |   | - |   |
| Aircraft financing                |   |       | 5,297  |       |   | 713      |   |       | -      |       |   | 6,010   |   |            | 15,945 |         |   | 579,525 |   |   | 601,480 |   |   | - |   |
| Construction equipment financing  |   |       | 3,463  |       |   | 29       |   |       | -      |       |   | 3,492   |   |            | 8,077  |         |   | 259,921 |   |   | 271,490 |   |   | - |   |
| Commercial real estate            |   |       | 328    |       |   | 943      |   |       | -      |       |   | 1,271   |   |            | 28,995 |         |   | 548,382 |   |   | 578,648 |   |   | - |   |
| Residential real estate           |   |       | 2,477  |       |   | 595      |   |       | 434    |       |   | 3,506   |   |            | 5,060  |         |   | 377,724 |   |   | 386,290 |   |   | 434 |   |
| Consumer                          |   |       | 859    |       |   | 341      |   |       | 81     |       |   | 1,281   |   |            | 487    |         |   | 91,682 |   |   | 93,450 |   |   | 81 |   |
| Total                             |   | $          | 13,699 |       | $      | 3,039    |   | $          | 515    |       | $      | 17,253  |   | $               | 74,038 |         | $      | 2,960,427 |   | $ | 3,051,718 |   | $ | 515 |   |
|                              |   |       |   |       |   |     |   |       |   |       |   |    |   |            |   |         |   |   |   |   |   |   |   |   |   |
| December 31, 2010                 |   |       |   |       |   |     |   |       |   |       |   |    |   |            |   |         |   |   |   |   |   |   |   |   |   |
| Commercial and agricultural loans |   | $          | 760    |       | $      | 22       |   | $          | -      |       | $      | 782     |   | $               | 8,083  |         | $      | 521,363 |   | $ | 530,228 |   | $ | - |   |
| Auto, light truck and             |   |       |   |       |   |     |   |       |   |       |   |    |   |            |   |         |   |   |   |   |   |   |   |   |   |
| environmental equipment           |   |       | 528    |       |   | 715      |   |       | -      |       |   | 1,243   |   |            | 3,332  |         |   | 391,925 |   |   | 396,500 |   |   | - |   |
| Medium and heavy duty truck       |   |       | 33     |       |   | -        |   |       | -      |       |   | 33      |   |            | 5,068  |         |   | 157,723 |   |   | 162,824 |   |   | - |   |
| Aircraft financing                |   |       | 16,097 |       |   | 188      |   |       | -      |       |   | 16,285  |   |            | 17,898 |         |   | 580,174 |   |   | 614,357 |   |   | - |   |
| Construction equipment financing  |   |       | 1,254  |       |   | 601      |   |       | -      |       |   | 1,855   |   |            | 8,575  |         |   | 275,204 |   |   | 285,634 |   |   | - |   |
| Commercial real estate            |   |       | 759    |       |   | 94       |   |       | -      |       |   | 853     |   |            | 26,622 |         |   | 567,254 |   |   | 594,729 |   |   | - |   |
| Residential real estate           |   |       | 3,781  |       |   | 580      |   |       | 264    |       |   | 4,625   |   |            | 4,958  |         |   | 381,368 |   |   | 390,951 |   |   | 264 |   |
| Consumer                          |   |       | 1,152  |       |   | 531      |   |       | 98     |       |   | 1,781   |   |            | 329    |         |   | 93,290 |   |   | 95,400 |   |   | 98 |   |
| Total                             |   | $          | 24,364 |       | $      | 2,731    |   | $          | 362    |       | $      | 27,457  |   | $               | 74,865 |         | $      | 2,968,301 |   | $ | 3,070,623 |   | $ | 362 |   |

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Table of Contents

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Table of Contents

|                              |  Commercial |    |   Auto, light   |   | Medium      |   |      |    |         |   |        |   |        |    |     |   |    |   |
|-----------------------------------|------------------|---------|--------------------------------|--------|-------------|--------|-----------|---------|--------------|--------|-------------|--------|-------------|---------|----------|--------|---------|--------|
|                              |  and        |    |  truck and                |   | and         |   |      |    | Construction |   |        |   |        |    |     |   |    |   |
| (Dollars in thousands)            | agricultural     |    | environmental                  |   | heavy duty  |   | Aircraft  |    | equipment    |   | Commercial  |   | Residential |    | Consumer |   |    |   |
|                              | loans            |    | equipment                      |   |  truck |   | financing |    | financing    |   | real estate |   | real estate |    | loans    |   | Total   |   |
| March 31, 2011                    |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |
| Reserve for loan and lease losses |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |
| Balance, beginning of period      | $                | 20,544  |                           | $      | 7,542       |   | $         | 5,768   |         | $      | 29,811      |   | $           | 8,439   |     | $      | 11,177  |   | $ | 2,518 |   | $ | 1,075 |   | $ | 86,874 |   |
| Charge-offs                       |             | 422     |                           |   | 68          |   |      | -       |         |   | 1,098       |   |        | 585     |     |   | 1,231   |   |   | 34 |   |   | 595 |   |   | 4,033 |   |
| Recoveries                        |             | 124     |                           |   | 45          |   |      | 1       |         |   | 674         |   |        | 35      |     |   | 105     |   |   | 3 |   |   | 134 |   |   | 1,121 |   |
| Net charge-offs (recoveries)      |             | 298     |                           |   | 23          |   |      | (1      | )            |   | 424         |   |        | 550     |     |   | 1,126   |   |   | 31 |   |   | 461 |   |   | 2,912 |   |
| Provision (recovery of provision) |             | (3,941  | )                              |   | 405         |   |      | (704    | )            |   | 1,516       |   |        | (1,091  | )        |   | 5,484   |   |   | 55 |   |   | 474 |   |   | 2,198 |   |
| Balance, end of period            | $                | 16,305  |                           | $      | 7,924       |   | $         | 5,065   |         | $      | 30,903      |   | $           | 6,798   |     | $      | 15,535  |   | $ | 2,542 |   | $ | 1,088 |   | $ | 86,160 |   |
| Ending balance: individually      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 4,025   |                           | $      | 308         |   | $         | 171     |         | $      | 2,174       |   | $           | 47      |     | $      | 1,348   |   | $ | - |   | $ | - |   | $ | 8,073 |   |
| Ending balance: collectively      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 12,280  |                           | $      | 7,616       |   | $         | 4,894   |         | $      | 28,729      |   | $           | 6,751   |     | $      | 14,187  |   | $ | 2,542 |   | $ | 1,088 |   | $ | 78,087 |   |
|                              |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| Financing receivables:            |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| Ending balance                    | $                | 547,381 |                           | $      | 416,957     |   | $         | 156,022 |         | $      | 601,480     |   | $           | 271,490 |     | $      | 578,648 |   | $ | 386,290 |   | $ | 93,450 |   | $ | 3,051,718 |   |
| Ending balance: individually      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 12,769  |                           | $      | 1,993       |   | $         | 4,692   |         | $      | 16,462      |   | $           | 8,065   |     | $      | 31,489  |   | $ | - |   | $ | - |   | $ | 75,470 |   |
| Ending balance: collectively      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 534,612 |                           | $      | 414,964     |   | $         | 151,330 |         | $      | 585,018     |   | $           | 263,425 |     | $      | 547,159 |   | $ | 386,290 |   | $ | 93,450 |   | $ | 2,976,248 |   |
|                              |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| March 31, 2010                    |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| Reserve for loan and lease losses |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| Balance, beginning of period      | $                | 24,017  |                           | $      | 9,630       |   | $         | 6,186   |         | $      | 24,807      |   | $           | 8,875   |     | $      | 10,453  |   | $ | 880 |   | $ | 3,388 |   | $ | 88,236 |   |
| Charge-offs                       |             | 348     |                           |   | 472         |   |      | 601     |         |   | 2,567       |   |        | 509     |     |   | 340     |   |   | 165 |   |   | 377 |   |   | 5,379 |   |
| Recoveries                        |             | 245     |                           |   | 34          |   |      | 39      |         |   | 72          |   |        | 42      |     |   | -       |   |   | 1 |   |   | 149 |   |   | 582 |   |
| Net charge-offs (recoveries)      |             | 103     |                           |   | 438         |   |      | 562     |         |   | 2,495       |   |        | 467     |     |   | 340     |   |   | 164 |   |   | 228 |   |   | 4,797 |   |
| Provision (recovery of provision) |             | (2,798  | )                              |   | (28         | )      |      | 1,745   |         |   | (615        | )      |        | 982     |     |   | 4,649   |   |   | 1,834 |   |   | (1,381 | ) |   | 4,388 |   |
| Balance, end of period            | $                | 21,116  |                           | $      | 9,164       |   | $         | 7,369   |         | $      | 21,697      |   | $           | 9,390   |     | $      | 14,762  |   | $ | 2,550 |   | $ | 1,779 |   | $ | 87,827 |   |
| Ending balance: individually      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 1,357   |                           | $      | 543         |   | $         | 2,134   |         | $      | 75          |   | $           | 1,731   |     | $      | 4,232   |   | $ | - |   | $ | - |   | $ | 10,072 |   |
| Ending balance: collectively      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 19,759  |                           | $      | 8,621       |   | $         | 5,235   |         | $      | 21,622      |   | $           | 7,659   |     | $      | 10,530  |   | $ | 2,550 |   | $ | 1,779 |   | $ | 77,755 |   |
|                              |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| Financing receivables:            |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| Ending balance                    | $                | 546,826 |                           | $      | 364,445     |   | $         | 200,228 |         | $      | 608,643     |   | $           | 303,866 |     | $      | 584,756 |   | $ | 392,911 |   | $ | 104,440 |   | $ | 3,106,115 |   |
| Ending balance: individually      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 8,274   |                           | $      | 3,935       |   | $         | 15,310  |         | $      | 2,786       |   | $           | 11,617  |     | $      | 31,699  |   | $ | - |   | $ | - |   | $ | 73,621 |   |
| Ending balance: collectively      |             |    |                           |   |        |   |      |    |         |   |        |   |        |    |     |   |    |   |   |   |   |   |   |   |   |   |   |
| evaluated for impairment          | $                | 538,552 |                           | $      | 360,510     |   | $         | 184,918 |         | $      | 605,857     |   | $           | 292,249 |     | $      | 553,057 |   | $ | 392,911 |   | $ | 104,440 |   | $ | 3,032,494 |   |

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Table of Contents

|                                          |   |       |   |   | Unpaid    |   |   |      |   |   | Average    |   |
|-----------------------------------------------|--------|------------|--------|--------|-----------|--------|--------|-----------|--------|--------|------------|--------|
| (Dollars in thousands)                        |   | Recorded   |   |   | Principal |   |   | Related   |   |   | Recorded   |   |
|                                          |   | Investment |   |   | Balance   |   |   | Allowance |   |   | Investment |   |
| March 31, 2011                                |   |       |   |   |      |   |   |      |   |   |       |   |
| With no related allowance recorded:           |   |       |   |   |      |   |   |      |   |   |       |   |
| Commercial and agricultural loans             |   | $          | 4,737  |   |      | $      | 4,737  |      |   | $      | -          |   |   | $ | 5,010 |   |
| Auto, light truck and environmental equipment |   |       | 1,099  |   |      |   | 1,099  |      |   |   | -          |   |   |   | 1,378 |   |
| Medium and heavy duty truck                   |   |       | 1,596  |   |      |   | 1,596  |      |   |   | -          |   |   |   | 1,657 |   |
| Aircraft financing                            |   |       | 5,743  |   |      |   | 5,743  |      |   |   | -          |   |   |   | 7,506 |   |
| Construction equipment financing              |   |       | 7,251  |   |      |   | 7,250  |      |   |   | -          |   |   |   | 7,558 |   |
| Commercial real estate                        |   |       | 22,437 |   |      |   | 22,437 |      |   |   | -          |   |   |   | 22,354 |   |
| Total with no related allowance recorded      |   |       | 42,863 |   |      |   | 42,862 |      |   |   | -          |   |   |   | 45,463 |   |
| With an allowance recorded:                   |   |       |   |   |      |   |   |      |   |   |       |   |   |   |   |   |
| Commercial and agricultural loans             |   |       | 8,032  |   |      |   | 8,031  |      |   |   | 4,025      |   |   |   | 7,960 |   |
| Auto, light truck and environmental equipment |   |       | 894    |   |      |   | 894    |      |   |   | 308        |   |   |   | 859 |   |
| Medium and heavy duty truck                   |   |       | 3,096  |   |      |   | 3,096  |      |   |   | 171        |   |   |   | 3,153 |   |
| Aircraft financing                            |   |       | 10,719 |   |      |   | 10,718 |      |   |   | 2,174      |   |   |   | 8,771 |   |
| Construction equipment financing              |   |       | 814    |   |      |   | 814    |      |   |   | 47         |   |   |   | 753 |   |
| Commercial real estate                        |   |       | 9,052  |   |      |   | 9,057  |      |   |   | 1,348      |   |   |   | 7,509 |   |
| Total with an allowance recorded              |   |       | 32,607 |   |      |   | 32,610 |      |   |   | 8,073      |   |   |   | 29,005 |   |
| Total:                                        |   |       |   |   |      |   |   |      |   |   |       |   |   |   |   |   |
| Commercial and agricultural loans             |   |       | 12,769 |   |      |   | 12,768 |      |   |   | 4,025      |   |   |   | 12,970 |   |
| Auto, light truck and environmental equipment |   |       | 1,993  |   |      |   | 1,993  |      |   |   | 308        |   |   |   | 2,237 |   |
| Medium and heavy duty truck                   |   |       | 4,692  |   |      |   | 4,692  |      |   |   | 171        |   |   |   | 4,810 |   |
| Aircraft financing                            |   |       | 16,462 |   |      |   | 16,461 |      |   |   | 2,174      |   |   |   | 16,277 |   |
| Construction equipment financing              |   |       | 8,065  |   |      |   | 8,064  |      |   |   | 47         |   |   |   | 8,311 |   |
| Commercial real estate                        |   |       | 31,489 |   |      |   | 31,494 |      |   |   | 1,348      |   |   |   | 29,863 |   |
| Total impaired loans                          |   | $          | 75,470 |   |      | $      | 75,472 |      |   | $      | 8,073      |   |   | $ | 74,468 |   |
|                                          |   |       |   |   |      |   |   |      |   |   |       |   |   |   |   |   |
| December 31, 2010                             |   |       |   |   |      |   |   |      |   |   |       |   |   |   |   |   |
| With no related allowance recorded:           |   |       |   |   |      |   |   |      |   |   |       |   |   |   |   |   |
| Commercial and agricultural loans             |   | $          | 4,930  |   |      | $      | 4,930  |      |   | $      | -          |   |   | $ | 4,848 |   |
| Auto, light truck and environmental equipment |   |       | 1,596  |   |      |   | 1,597  |      |   |   | -          |   |   |   | 1,632 |   |
| Medium and heavy duty truck                   |   |       | 1,748  |   |      |   | 1,748  |      |   |   | -          |   |   |   | 2,922 |   |
| Aircraft financing                            |   |       | 4,509  |   |      |   | 4,509  |      |   |   | -          |   |   |   | 3,315 |   |
| Construction equipment financing              |   |       | 5,534  |   |      |   | 5,535  |      |   |   | -          |   |   |   | 5,107 |   |
| Commercial real estate                        |   |       | 21,071 |   |      |   | 21,071 |      |   |   | -          |   |   |   | 20,301 |   |
| Total with no related allowance recorded      |   |       | 39,388 |   |      |   | 39,390 |      |   |   | -          |   |   |   | 38,125 |   |
| With an allowance recorded:                   |   |       |   |   |      |   |   |      |   |   |       |   |   |   |   |   |
| Commercial and agricultural loans             |   |       | 8,282  |   |      |   | 8,281  |      |   |   | 4,190      |   |   |   | 11,210 |   |
| Auto, light truck and environmental equipment |   |       | 1,136  |   |      |   | 1,136  |      |   |   | 377        |   |   |   | 1,714 |   |
| Medium and heavy duty truck                   |   |       | 3,347  |   |      |   | 3,347  |      |   |   | 1,049      |   |   |   | 5,591 |   |
| Aircraft financing                            |   |       | 13,913 |   |      |   | 13,913 |      |   |   | 2,050      |   |   |   | 8,626 |   |
| Construction equipment financing              |   |       | 3,374  |   |      |   | 3,379  |      |   |   | 648        |   |   |   | 5,485 |   |
| Commercial real estate                        |   |       | 8,625  |   |      |   | 8,630  |      |   |   | 893        |   |   |   | 9,489 |   |
| Total with an allowance recorded              |   |       | 38,677 |   |      |   | 38,686 |      |   |   | 9,207      |   |   |   | 42,115 |   |
| Total:                                        |   |       |   |   |      |   |   |      |   |   |       |   |   |   |   |   |
| Commercial and agricultural loans             |   |       | 13,212 |   |      |   | 13,211 |      |   |   | 4,190      |   |   |   | 16,058 |   |
| Auto, light truck and environmental equipment |   |       | 2,732  |   |      |   | 2,733  |      |   |   | 377        |   |   |   | 3,346 |   |
| Medium and heavy duty truck                   |   |       | 5,095  |   |      |   | 5,095  |      |   |   | 1,049      |   |   |   | 8,513 |   |
| Aircraft financing                            |   |       | 18,422 |   |      |   | 18,422 |      |   |   | 2,050      |   |   |   | 11,941 |   |
| Construction equipment financing              |   |       | 8,908  |   |      |   | 8,914  |      |   |   | 648        |   |   |   | 10,592 |   |
| Commercial real estate                        |   |       | 29,696 |   |      |   | 29,701 |      |   |   | 893        |   |   |   | 29,790 |   |
| Total impaired loans                          |   | $          | 78,065 |   |      | $      | 78,076 |      |   | $      | 9,207      |   |   | $ | 80,240 |   |

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| (Dollars in thousands)                        |   | Three Months Ended |   |
|-----------------------------------------------|--------|--------------------|--------|
|                                          |   | March 31,          |   |
|                                          |   | 2011               |   |   | 2010 |   |
| Commercial and agricultural loans             |   | $                  | 116    |   |   | $ | 25 |   |
| Auto, light truck and environmental equipment |   |               | 1      |   |   |   | - |   |
| Medium and heavy duty truck                   |   |               | 1      |   |   |   | 2 |   |
| Aircraft financing                            |   |               | 9      |   |   |   | - |   |
| Construction equipment financing              |   |               | 9      |   |   |   | 88 |   |
| Commercial real estate                        |   |               | 65     |   |   |   | 24 |   |
| Total impaired loans                          |   | $                  | 201    |   |   | $ | 139 |   |

|                                                             |   | Three Months Ended |   |
|------------------------------------------------------------------|--------|--------------------|--------|
| (Dollars in thousands)                                           |   | March 31,          |   |
|                                                             |   | 2011               |   |   | 2010 |   |
| Mortgage servicing assets:                                       |   |               |   |   |   |   |
| Balance at beginning of period                                   |   | $                  | 7,556  |   |   | $ | 8,749 |   |
| Additions                                                        |   |               | 146    |   |   |   | 571 |   |
| Amortization                                                     |   |               | (734   | ) |   |   | (761 | ) |
| Sales                                                            |   |               | -      |   |   |   | (443 | ) |
| Carrying value before valuation allowance at end of period       |   |               | 6,968  |   |   |   | 8,116 |   |
| Valuation allowance:                                             |   |               |   |   |   |   |   |   |
| Balance at beginning of period                                   |   |               | -      |   |   |   | (1 | ) |
| Impairment (charges) recoveries                                  |   |               | (5     | ) |   |   | 1 |   |
| Balance at end of period                                         |   | $                  | (5     | ) |   | $ | - |   |
| Net carrying value of mortgage servicing assets at end of period |   | $                  | 6,963  |   |   | $ | 8,116 |   |
| Fair value of mortgage servicing assets at end of period         |   | $                  | 10,194 |   |   | $ | 10,575 |   |

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|                                            |   | March 31,   |   |
|-------------------------------------------------|--------|-------------|--------|
|                                            |   | 2011        |   | 2010 |   |
| Expected weighted-average life (in years)       |   |  3.46  |   |   |  3.55 |   |   |
| Weighted-average constant prepayment rate (CPR) |   |  18.00 | %      |   |  17.64 | % |   |
| Weighted-average discount rate                  |   |  9.56  | %      |   |  8.48 | % |   |

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Table of Contents

| (Dollars in thousands)       |   |        |    | Asset derivatives   |   | Liability derivatives   |
|------------------------------|--------|-------------|---------|---------------------|--------|-------------------------|
|                         |   | Notional or |    | Statement of        |   |                    |   | Statement of |   |   |
|                         |   | contractual |    | Financial Condition |   | Fair                    |   | Financial Condition |   | Fair |
|                         |   | amount      |    | location            |   | value                   |   | location |   | value |
|                         |   |        |    |                |   |                    |   |   |   |   |   |   |   |
| March 31, 2011               |   |        |    |                |   |                    |   |   |   |   |   |   |   |
| Interest rate swap contracts |   | $           | 436,745 |                |   | Other assets            |   | $ | 12,391 |   |   | Other liabilities |   | $ | 12,781 |   |
| Loan commitments             |   |        | 13,263  |                |   | Mortgages held for sale |   |   | 71 |   |   | N/A |   |   | - |   |
| Forward contracts            |   |        | 9,500   |                |   | N/A                     |   |   | - |   |   | Mortgages held for sale |   |   | 42 |   |
|                         |   |        |    |                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                        |   | $           | 459,508 |                |   |                    |   |   | $ | 12,462 |   |   |   |   |   | $ | 12,823 |   |
|                         |   |        |    |                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2010            |   |        |    |                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swap contracts |   | $           | 446,224 |                |   | Other assets            |   | $ | 14,959 |   |   | Other liabilities |   | $ | 15,384 |   |
| Loan commitments             |   |        | 28,666  |                |   | Mortgages held for sale |   |   | 30 |   |   | N/A |   |   | - |   |
| Forward contracts            |   |        | 40,320  |                |   | Mortgages held for sale |   |   | 451 |   |   | N/A |   |   | - |   |
|                         |   |        |    |                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                        |   | $           | 515,210 |                |   |                    |   |   | $ | 15,440 |   |   |   |   |   | $ | 15,384 |   |

|                         |                    |   | Gain (loss)        |   |
|------------------------------|-------------------------|--------|--------------------|--------|
|                         |                    |   | Three Months Ended |   |
|                         | Statement of            |   | March 31,          |   |
| (Dollars in thousands)       | Income location         |   | 2011               |   |   | 2010 |   |
|                         |                    |   |               |   |   |   |   |
| Interest rate swap contracts | Other expense           |   | $                  | 2      |   |   | $ | (35 | ) |
| Interest rate swap contracts | Other income            |   |               | 27     |   |   |   | 77 |   |
| Loan commitments             | Mortgage banking income |   |               | 41     |   |   |   | 107 |   |
| Forward contracts            | Mortgage banking income |   |               | (493   | ) |   |   | (325 | ) |
| Total                        |                    |   | $                  | (423   | ) |   | $ | (176 | ) |

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|                                                                      |   | Three Months Ended |       |
|---------------------------------------------------------------------------|--------|--------------------|------------|
| (Dollars in thousands - except per share amounts)                         |   | March 31,          |       |
|                                                                      |   | 2011               |       |   | 2010 |   |
| Distributed earnings allocated to common stock                            |   | $                  | 3,888      |   |   | $ | 3,616 |   |
| Undistributed earnings allocated to common stock                          |   |               | 6,612      |   |   |   | 4,278 |   |
| Net earnings allocated to common stock                                    |   |               | 10,500     |   |   |   | 7,894 |   |
| Net earnings allocated to participating securities                        |   |               | 108        |   |   |   | 74 |   |
| Net income allocated to common stock and participating securities         |   | $                  | 10,608     |   |   | $ | 7,968 |   |
|                                                                      |   |               |       |   |   |   |   |   |
| Weighted average shares outstanding for basic earnings per common share   |   |               | 24,271,366 |   |   |   | 24,210,242 |   |
| Dilutive effect of stock compensation                                     |   |               | 8,151      |   |   |   | 5,264 |   |
| Weighted average shares outstanding for diluted earnings per common share |   |               | 24,279,517 |   |   |   | 24,215,506 |   |
|                                                                      |   |               |       |   |   |   |   |   |
| Basic earnings per common share                                           |   | $                  | 0.43       |   |   | $ | 0.33 |   |
| Diluted earnings per common share                                         |   | $                  | 0.43       |   |   | $ | 0.33 |   |

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|                                          |   |      |   |   |     |   |   | Average     |   |   |       |   |
|-----------------------------------------------|--------|-----------|--------|--------|----------|--------|--------|-------------|--------|--------|------------|--------|
|                                          |   |      |   |   | Weighted |   |   | Remaining   |   |   | Total      |   |
|                                          |   |      |   |   | Average  |   |   | Contractual |   |   | Intrinsic  |   |
|                                          |   | Number of |   |   | Exercise |   |   | Term        |   |   | Value      |   |
|                                          |   | Shares    |   |   | Price    |   |   | (in years)  |   |   | (in 000's) |   |
|                                          |   |      |   |   |     |   |   |        |   |   |       |   |
| Options outstanding, beginning of year        |   |      | 62,508 |   |     | $      | 17.18  |        |   |   |       |   |   |   |
| Granted                                       |   |      | -      |   |     |   | -      |        |   |   |       |   |   |   |
| Exercised                                     |   |      | -      |   |     |   | -      |        |   |   |       |   |   |   |
| Forfeited                                     |   |      | (7,508 | )      |     |   | 17.31  |        |   |   |       |   |   |   |
| Options outstanding, March 31, 2011           |   |      | 55,000 |   |     | $      | 17.16  |        |   |   | 1.01       |   |   | $ | 181 |   |
|                                          |   |      |   |   |     |   |   |        |   |   |       |   |   |   |   |   |
|                                          |   |      |   |   |     |   |   |        |   |   |       |   |   |   |   |   |
| Vested and expected to vest at March 31, 2011 |   |      | 55,000 |   |     | $      | 17.16  |        |   |   | 1.01       |   |   | $ | 181 |   |
| Exercisable at March 31, 2011                 |   |      | 52,250 |   |     | $      | 17.43  |        |   |   | 0.95       |   |   | $ | 159 |   |

|     |            |   | Options Outstanding |   |   | Options Exercisable |   |
|----------|-----------------|--------|---------------------|--------|--------|---------------------|--------|
|     |            |   |                |   |   | Weighted            |   |   |   |   |   |   |   |   |   |   |
|     |            |   |                |   |   | Average             |   |   | Weighted |   |   |   |   |   | Weighted |   |
| Range of |            |   | Number              |   |   | Remaining           |   |   | Average |   |   | Number |   |   | Average |   |
| Exercise |            |   | of shares           |   |   | Contractual         |   |   | Exercise |   |   | of shares |   |   | Exercise |   |
| Prices   |            |   | Outstanding         |   |   | Life                |   |   | Price |   |   | Exercisable |   |   | Price |   |
| $        | 12.04 to $17.99 |   |                | 22,000 |   |                | 2.06   |   |   | $ | 12.04 |   |   | 19,250 |   |   | $ | 12.04 |   |
| $        | 18.00 to $26.99 |   |                | 33,000 |   |                | 0.31   |   |   |   | 20.58 |   |   | 33,000 |   |   |   | 20.58 |   |

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| ■      | Level 1 – The valuation is based on quoted prices in active markets for identical instruments. |
|---------------------------------------|------------------------------------------------------------------------------------------------------|

| ■      | Level 2 – The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. |
|---------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■      | Level 3 – The valuation is based on unobservable inputs that are supported by minimal or no market activity and that are significant to the fair value of the instrument.  Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar techniques that incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument, or valuations that require significant management judgment or estimation. |
|---------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (Dollars in thousands)                            |   | Fair value carrying amount |   |   | Aggregate unpaid principal |   |   | Excess of fair value carrrying amount over (under) unpaid principal |   |   |
|---------------------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|--------|---------------------------------------------------------------------|--------|--------|
|                                              |   |                       |   |   |                       |   |   |                                                                |   |   |
| Mortgages held for sale reported at fair value:   |   |                       |   |   |                       |   |   |                                                                |   |   |
| Total loans                                       |   | $                          | 5,467  |   |                       | $      | 5,307  |                                                                |   | $      | 160 | (1 | ) |
| Nonaccrual loans                                  |   |                       | -      |   |                       |   | -      |                                                                |   |   | - |   |   |
| Loans 90 days or more past due and still accruing |   |                       | -      |   |                       |   | -      |                                                                |   |   | - |   |   |

| ■      | U.S. treasuries are priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ■      | Government-sponsored agency debt securities and corporate bonds are primarily priced using available market information through processes such as benchmark curves, market valuations of like securities, sector groupings and matrix pricing. |
|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■      | Other government-sponsored agency securities, mortgage-backed securities and some of the actively traded REMICs and CMOs, are primarily priced using available market information including benchmark yields, prepayment speeds, spreads and volatility of similar securities. |
|---------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■      | Other inactive government-sponsored agency securities are primarily priced using consensus pricing and dealer quotes. |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------|

| ■      | State and political subdivisions are largely grouped by characteristics, i.e., geographical data and source of revenue in trade dissemination systems.  Since some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities.  Local tax anticipation warrants, with very little market activity, are priced using an appropriate market yield curve. |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■      | Marketable equity (common) securities are primarily priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (Dollars in thousands)                                                 |   | Level 1 |   |   | Level 2 |   |    | Level 3 |   |   | Total  |   |
|------------------------------------------------------------------------|--------|---------|--------|--------|---------|--------|---------|---------|--------|--------|--------|--------|
|                                                                   |   |    |   |   |    |   |    |    |   |   |   |   |
| Assets:                                                                |   |    |   |   |    |   |    |    |   |   |   |   |
| Investment securities available-for-sale:                              |   |    |   |   |    |   |    |    |   |   |   |   |
| U.S. Treasury and Federal agencies securities                          |   | $       | 20,159 |   |    | $      | 417,484 |    |   | $      | -      |   |   | $ | 437,643 |   |
| U.S. States and political subdivisions securities                      |   |    | -      |   |    |   | 107,326 |    |   |   | 16,538 |   |   |   | 123,864 |   |
| Mortgage-backed securities – Federal agencies                    |   |    | -      |   |    |   | 333,758 |    |   |   | -      |   |   |   | 333,758 |   |
| Corporate debt securities                                              |   |    | -      |   |    |   | 35,595  |    |   |   | -      |   |   |   | 35,595 |   |
| Foreign government and other securities                                |   |    | -      |   |    |   | 6,014   |    |   |   | 675    |   |   |   | 6,689 |   |
| Total debt securities                                                  |   |    | 20,159 |   |    |   | 900,177 |    |   |   | 17,213 |   |   |   | 937,549 |   |
| Marketable equity securities                                           |   |    | 4,672  |   |    |   | -       |    |   |   | -      |   |   |   | 4,672 |   |
| Total investment securities available-for-sale                         |   |    | 24,831 |   |    |   | 900,177 |    |   |   | 17,213 |   |   |   | 942,221 |   |
| Trading account securities                                             |   |    | 146    |   |    |   | -       |    |   |   | -      |   |   |   | 146 |   |
| Mortgages held for sale                                                |   |    | -      |   |    |   | 5,467   |    |   |   | -      |   |   |   | 5,467 |   |
| Accrued income and other assets (Interest rate swap agreements)        |   |    | -      |   |    |   | 12,391  |    |   |   | -      |   |   |   | 12,391 |   |
| Total                                                                  |   | $       | 24,977 |   |    | $      | 918,035 |    |   | $      | 17,213 |   |   | $ | 960,225 |   |
|                                                                   |   |    |   |   |    |   |    |    |   |   |   |   |   |   |   |   |
| Liabilities                                                            |   |    |   |   |    |   |    |    |   |   |   |   |   |   |   |   |
| Accrued expenses and other liabilities (Interest rate swap agreements) |   | $       | -      |   |    | $      | 12,781  |    |   | $      | -      |   |   | $ | 12,781 |   |
| Total                                                                  |   | $       | -      |   |    | $      | 12,781  |    |   | $      | -      |   |   | $ | 12,781 |   |

| (Dollars in thousands)                       |   | U.S. States and political subdivisions securities |   |   | Corporate debt securities |   |   | Foreign government and other securities |   |   | Investment securities available-for-sale |   |
|----------------------------------------------|--------|---------------------------------------------------|--------|--------|---------------------------|--------|--------|-----------------------------------------|--------|--------|------------------------------------------|--------|
| Beginning balance January 1, 2011            |   | $                                                 | 16,306 |   |                      | $      | 9,992  |                                    |   | $      | 675                                      |   |   | $ | 26,973 |   |
| Total gains or losses (realized/unrealized): |   |                                              |   |   |                      |   |   |                                    |   |   |                                     |   |   |   |   |   |
| Included in earnings                         |   |                                              | -      |   |                      |   | -      |                                    |   |   | -                                        |   |   |   | - |   |
| Included in other comprehensive income       |   |                                              | 577    |   |                      |   | -      |                                    |   |   | -                                        |   |   |   | 577 |   |
| Purchases                                    |   |                                              | 350    |   |                      |   | -      |                                    |   |   | -                                        |   |   |   | 350 |   |
| Issuances                                    |   |                                              | -      |   |                      |   | -      |                                    |   |   | -                                        |   |   |   | - |   |
| Settlements                                  |   |                                              | -      |   |                      |   | -      |                                    |   |   | -                                        |   |   |   | - |   |
| Maturities                                   |   |                                              | (695   | )      |                      |   | (9,992 | )                                       |   |   | -                                        |   |   |   | (10,687 | ) |
| Transfers into Level 3                       |   |                                              | -      |   |                      |   | -      |                                    |   |   | -                                        |   |   |   | - |   |
| Transfers out of Level 3                     |   |                                              | -      |   |                      |   | -      |                                    |   |   | -                                        |   |   |   | - |   |
| Ending balance March 31, 2011                |   | $                                                 | 16,538 |   |                      | $      | -      |                                    |   | $      | 675                                      |   |   | $ | 17,213 |   |

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| (Dollars in thousands)                                      |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total  |   |
|-------------------------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                                                        |   |    |   |   |    |   |   |    |   |   |   |   |
| Loans                                                       |   | $       | -      |   |    | $      | -      |    |   | $      | 75,472 |   |   | $ | 75,472 |   |
| Accrued income and other assets (partnership investments)   |   |    | -      |   |    |   | -      |    |   |   | 2,006  |   |   |   | 2,006 |   |
| Accrued income and other assets (mortgage servicing rights) |   |    | -      |   |    |   | -      |    |   |   | 6,963  |   |   |   | 6,963 |   |
| Accrued income and other assets (repossessions)             |   |    | -      |   |    |   | -      |    |   |   | 5,482  |   |   |   | 5,482 |   |
| Accrued income and other assets (other real estate)         |   |    | -      |   |    |   | -      |    |   |   | 8,013  |   |   |   | 8,013 |   |
|                                                        |   | $       | -      |   |    | $      | -      |    |   | $      | 97,936 |   |   | $ | 97,936 |   |

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|                                                                                                       |   | March 31, 2011 |      |   | December 31, 2010 |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                                                                                       |   | Carrying or    |      |   |              |   |   | Carrying or |   |   |   |   |
| (Dollars in thousands)                                                                                     |   | Contract Value |      |   | Fair Value        |   |   | Contract Value |   |   | Fair Value |   |
| Assets:                                                                                                    |   |           |      |   |              |   |   |   |   |   |   |   |
| Cash and due from banks                                                                                    |   | $              | 57,271    |   |              | $      | 57,271 |   |   | $ | 62,313 |   |   | $ | 62,313 |   |
| Federal funds sold and interest bearing deposits with other banks                                          |   |           | 81,661    |   |              |   | 81,661 |   |   |   | 34,559 |   |   |   | 34,559 |   |
| Investment securities, available-for-sale                                                                  |   |           | 942,221   |   |              |   | 942,221 |   |   |   | 969,018 |   |   |   | 969,018 |   |
| Other investments and trading account securities                                                           |   |           | 20,649    |   |              |   | 20,649 |   |   |   | 21,481 |   |   |   | 21,481 |   |
| Mortgages held for sale                                                                                    |   |           | 5,467     |   |              |   | 5,467 |   |   |   | 32,599 |   |   |   | 32,599 |   |
| Loans and leases, net of reserve for loan and lease losses                                                 |   |           | 2,965,558 |   |              |   | 3,076,930 |   |   |   | 2,983,749 |   |   |   | 3,040,895 |   |
| Cash surrender value of life insurance policies                                                            |   |           | 53,599    |   |              |   | 53,599 |   |   |   | 54,182 |   |   |   | 54,182 |   |
| Mortgage servicing rights                                                                                  |   |           | 6,963     |   |              |   | 10,194 |   |   |   | 7,556 |   |   |   | 8,785 |   |
| Interest rate swaps                                                                                        |   |           | 12,391    |   |              |   | 12,391 |   |   |   | 14,959 |   |   |   | 14,959 |   |
| Liabilities:                                                                                               |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                   |   | $              | 3,609,007 |   |              | $      | 3,636,660 |   |   | $ | 3,622,745 |   |   | $ | 3,654,067 |   |
| Short-term borrowings                                                                                      |   |           | 132,153   |   |              |   | 132,153 |   |   |   | 155,989 |   |   |   | 155,989 |   |
| Long-term debt and mandatorily redeemable securities                                                       |   |           | 26,717    |   |              |   | 26,955 |   |   |   | 24,816 |   |   |   | 25,072 |   |
| Subordinated notes                                                                                         |   |           | 89,692    |   |              |   | 87,951 |   |   |   | 89,692 |   |   |   | 79,811 |   |
| Interest rate swaps                                                                                        |   |           | 12,781    |   |              |   | 12,781 |   |   |   | 15,384 |   |   |   | 15,384 |   |
| Off-balance-sheet instruments *                                                                            |   |           | -         |   |              |   | 146 |   |   |   | - |   |   |   | 134 |   |
| * Represents estimated cash outflows required to currently settle the obligations at current market rates. |   |           |      |   |              |

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ITEM 

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| (Dollars in thousands)                         |   | March 31, |    |   | December 31, |   |
|------------------------------------------------|--------|-----------|---------|--------|--------------|--------|
|                                           |   | 2011      |    |   | 2010         |   |
| Accrued income and other assets:               |   |      |    |   |         |   |
| Bank owned life insurance cash surrender value |   | $         | 53,599  |   |         | $      | 54,182 |   |
| Accrued interest receivable                    |   |      | 14,334  |   |         |   | 14,218 |   |
| Mortgage servicing assets                      |   |      | 6,963   |   |         |   | 7,556 |   |
| Other real estate                              |   |      | 6,813   |   |         |   | 6,392 |   |
| Former bank premises held for sale             |   |      | 1,200   |   |         |   | 1,200 |   |
| Repossessions                                  |   |      | 5,482   |   |         |   | 5,670 |   |
| All other assets                               |   |      | 45,180  |   |         |   | 51,370 |   |
| Total accrued income and other assets          |   | $         | 133,571 |   |         | $      | 140,588 |   |

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|                                      |   |   |    |   |            |   |   |              |   |   |    |   |   | To Be Well        |   |
|-------------------------------------------|--------|--------|---------|--------|-----------------|--------|--------|-------------------|--------|--------|---------|--------|--------|-------------------|--------|
|                                      |   |   |    |   |            |   |   |              |   |   |    |   |   | Capitalized Under |   |
|                                      |   |   |    |   | Minimum Capital |   |   | Prompt Corrective |   |
|                                      |   | Actual |    |   | Adequacy        |   |   | Action Provisions |   |
| (Dollars in thousands)                    |   | Amount |    |   | Ratio           |   |   | Amount            |   |   | Ratio   |   |   | Amount            |   |   | Ratio |   |
| Total Capital (to Risk-Weighted Assets):  |   |   |    |   |            |   |   |              |   |   |    |   |   |              |   |   |
| 1st Source Corporation                    |   | $      | 522,933 |   |            |   | 15.68  | %                 |   | $      | 266,750 |   |   |              | 8.00   | % |   | $ | 333,438 |   |   |   | 10.00 | % |
| 1st Source Bank                           |   |   | 516,652 |   |            |   | 15.55  |              |   |   | 265,845 |   |   |              | 8.00   |   |   |   | 332,306 |   |   |   | 10.00 |   |
| Tier 1 Capital (to Risk-Weighted Assets): |   |   |    |   |            |   |   |              |   |   |    |   |   |              |   |   |   |   |   |   |   |
| 1st Source Corporation                    |   |   | 479,637 |   |            |   | 14.38  |              |   |   | 133,375 |   |   |              | 4.00   |   |   |   | 200,063 |   |   |   | 6.00 |   |
| 1st Source Bank                           |   |   | 474,425 |   |            |   | 14.28  |              |   |   | 132,922 |   |   |              | 4.00   |   |   |   | 199,383 |   |   |   | 6.00 |   |
| Tier 1 Capital (to Average Assets):       |   |   |    |   |            |   |   |              |   |   |    |   |   |              |   |   |   |   |   |   |   |   |   |   |
| 1st Source Corporation                    |   |   | 479,637 |   |            |   | 11.07  |              |   |   | 173,272 |   |   |              | 4.00   |   |   |   | 216,589 |   |   |   | 5.00 |   |
| 1st Source Bank                           |   |   | 474,425 |   |            |   | 10.99  |              |   |   | 172,682 |   |   |              | 4.00   |   |   |   | 215,852 |   |   |   | 5.00 |   |

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| DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY |                         |      |   |     |   |   |   |
|--------------------------------------------------------------|------------------------------|-----------|--------|----------|--------|--------|--------|
| INTEREST RATES AND INTEREST DIFFERENTIAL                     |                         |      |   |     |   |   |   |
| (Dollars in thousands)                                       |                         |      |   |     |   |   |   |
|                                                         | Three months ended March 31, |      |
|                                                         | 2011                         |      |   | 2010     |   |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |                         |      |   | Interest |   |   |   |   |   |   |   |   | Interest |   |   |   |   |
|                                                         | Average                      |      |   | Income/  |   |   | Yield/ |   |   | Average |   |   | Income/ |   |   | Yield/ |   |
|                                                         | Balance                      |      |   | Expense  |   |   | Rate   |   |   | Balance |   |   | Expense |   |   | Rate |   |
| ASSETS:                                                      |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities:                                       |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                      | $                            | 815,564   |   |     | $      | 4,482  |   |   |   | 2.23 | % |   | $ | 712,824 |   |   | $ | 5,401 |   |   |   | 3.07 | % |
| Tax exempt                                                   |                         | 141,004   |   |     |   | 1,734  |   |   |   | 4.99 | % |   |   | 179,782 |   |   |   | 2,145 |   |   |   | 4.84 | % |
| Mortgages - held for sale                                    |                         | 17,213    |   |     |   | 179    |   |   |   | 4.22 | % |   |   | 20,634 |   |   |   | 273 |   |   |   | 5.37 | % |
| Net loans and leases                                         |                         | 3,054,013 |   |     |   | 41,278 |   |   |   | 5.48 | % |   |   | 3,100,144 |   |   |   | 42,194 |   |   |   | 5.52 | % |
| Other investments                                            |                         | 80,949    |   |     |   | 243    |   |   |   | 1.22 | % |   |   | 132,323 |   |   |   | 274 |   |   |   | 0.84 | % |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Earning Assets                                         |                         | 4,108,743 |   |     |   | 47,916 |   |   |   | 4.73 | % |   |   | 4,145,707 |   |   |   | 50,287 |   |   |   | 4.92 | % |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                      |                         | 58,710    |   |     |   |   |   |   |   |   |   |   |   | 57,891 |   |   |   |   |   |   |   |   |   |
| Reserve for loan and lease losses                            |                         | (88,263   | )      |     |   |   |   |   |   |   |   |   |   | (89,223 | ) |   |   |   |   |   |   |   |   |
| Other assets                                                 |                         | 340,974   |   |     |   |   |   |   |   |   |   |   |   | 371,019 |   |   |   |   |   |   |   |   |   |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                        | $                            | 4,420,164 |   |     |   |   |   |   |   |   |   |   | $ | 4,485,394 |   |   |   |   |   |   |   |   |   |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY:                        |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits                                    | $                            | 3,084,779 |   |     | $      | 8,355  |   |   |   | 1.10 | % |   | $ | 3,126,268 |   |   | $ | 12,405 |   |   |   | 1.61 | % |
| Short-term borrowings                                        |                         | 148,729   |   |     |   | 89     |   |   |   | 0.24 | % |   |   | 160,652 |   |   |   | 188 |   |   |   | 0.47 | % |
| Subordinated notes                                           |                         | 89,692    |   |     |   | 1,647  |   |   |   | 7.45 | % |   |   | 89,692 |   |   |   | 1,647 |   |   |   | 7.45 | % |
| Long-term debt and                                           |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| mandatorily redeemable securities                            |                         | 25,426    |   |     |   | 259    |   |   |   | 4.13 | % |   |   | 20,070 |   |   |   | 270 |   |   |   | 5.46 | % |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest-Bearing Liabilities                           |                         | 3,348,626 |   |     |   | 10,350 |   |   |   | 1.25 | % |   |   | 3,396,682 |   |   |   | 14,510 |   |   |   | 1.73 | % |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing deposits                                 |                         | 515,236   |   |     |   |   |   |   |   |   |   |   |   | 447,861 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                            |                         | 63,629    |   |     |   |   |   |   |   |   |   |   |   | 62,239 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                                         |                         | 492,673   |   |     |   |   |   |   |   |   |   |   |   | 578,612 |   |   |   |   |   |   |   |   |   |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                        | $                            | 4,420,164 |   |     |   |   |   |   |   |   |   |   | $ | 4,485,394 |   |   |   |   |   |   |   |   |   |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Income                                          |                         |      |   |     | $      | 37,566 |   |   |   |   |   |   |   |   |   |   | $ | 35,777 |   |   |   |   |   |
|                                                         |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Yield on Earning Assets on a Taxable                     |                         |      |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equivalent Basis                                             |                         |      |   |     |   |   |   |   |   | 3.71 | % |   |   |   |   |   |   |   |   |   |   | 3.50 | % |

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| (Dollars in thousands)                    |   |      |   |   |         |   |   |      |   |
|-------------------------------------------|--------|-----------|--------|--------|--------------|--------|--------|-----------|--------|
|                                      |   | March 31, |   |   | December 31, |   |   | March 31, |   |
|                                      |   | 2011      |   |   | 2010         |   |   | 2010      |   |
|                                      |   |      |   |   |         |   |   |      |   |
| Loans and leases past due 90 days or more |   | $         | 515    |   |         | $      | 361    |      |   | $ | 272 |   |
| Nonaccrual loans and leases               |   |      | 74,038 |   |         |   | 74,853 |      |   |   | 78,094 |   |
| Other real estate                         |   |      | 6,813  |   |         |   | 6,392  |      |   |   | 5,205 |   |
| Former bank premises held for sale        |   |      | 1,200  |   |         |   | 1,200  |      |   |   | 2,363 |   |
| Repossessions                             |   |      | 5,482  |   |         |   | 5,670  |      |   |   | 9,886 |   |
| Equipment owned under operating leases    |   |      | 300    |   |         |   | 236    |      |   |   | 150 |   |
|                                      |   |      |   |   |         |   |   |      |   |   |   |   |
| Total nonperforming assets                |   | $         | 88,348 |   |         | $      | 88,712 |      |   | $ | 95,970 |   |

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|                                          |   | March 31, |   |
|-----------------------------------------------|--------|-----------|--------|
| (Dollars in thousands)                        |   | 2011      |   |   | 2010 |   |
|                                          |   |      |   |   |   |   |
| Commercial and agricultural loans             |   | $         | -      |   |   | $ | 146 |   |
| Auto, light truck and environmental equipment |   |      | 261    |   |   |   | 325 |   |
| Medium and heavy duty truck                   |   |      | 60     |   |   |   | 315 |   |
| Aircraft financing                            |   |      | 4,946  |   |   |   | 8,858 |   |
| Construction equipment financing              |   |      | 200    |   |   |   | 195 |   |
| Commercial real estate                        |   |      | 6,083  |   |   |   | 4,475 |   |
| Residential real estate                       |   |      | 730    |   |   |   | 730 |   |
| Consumer loans                                |   |      | 15     |   |   |   | 47 |   |
|                                          |   |      |   |   |   |   |   |   |
| Total                                         |   | $         | 12,295 |   |   | $ | 15,091 |   |

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| (Dollars in thousands)                           |   | Three Months Ended |   |
|--------------------------------------------------|--------|--------------------|--------|
|                                             |   | March 31,          |   |
|                                             |   | 2011               |   |   | 2010 |   |
| Noninterest income:                              |   |               |   |   |   |   |
| Trust fees                                       |   | $                  | 3,992  |   |   | $ | 3,745 |   |
| Service charges on deposit accounts              |   |               | 4,236  |   |   |   | 4,620 |   |
| Mortgage banking income                          |   |               | 444    |   |   |   | 777 |   |
| Insurance commissions                            |   |               | 1,142  |   |   |   | 1,465 |   |
| Equipment rental income                          |   |               | 6,038  |   |   |   | 6,745 |   |
| Other income                                     |   |               | 2,971  |   |   |   | 2,689 |   |
| Investment securities and other investment gains |   |               | 130    |   |   |   | 881 |   |
|                                             |   |               |   |   |   |   |   |   |
| Total noninterest income                         |   | $                  | 18,953 |   |   | $ | 20,922 |   |

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Table of Contents

| (Dollars in thousands)                                         |   | Three Months Ended |   |
|----------------------------------------------------------------|--------|--------------------|--------|
|                                                           |   | March 31,          |   |
|                                                           |   | 2011               |   |   | 2010 |   |
| Noninterest expense:                                           |   |               |   |   |   |   |
|   Salaries and employee benefits                     |   | $                  | 18,638 |   |   | $ | 18,810 |   |
|   Net occupancy expense                              |   |               | 2,320  |   |   |   | 2,487 |   |
|   Furniture and equipment expense                    |   |               | 3,349  |   |   |   | 2,800 |   |
|   Depreciation - leased equipment                    |   |               | 4,805  |   |   |   | 5,364 |   |
|   Professional fees                                  |   |               | 1,096  |   |   |   | 1,514 |   |
|   Supplies and communication                         |   |               | 1,394  |   |   |   | 1,369 |   |
|   Business development and marketing expense         |   |               | 622    |   |   |   | 567 |   |
|   Intangible asset amortization                      |   |               | 325    |   |   |   | 330 |   |
|   Loan and lease collection and repossession expense |   |               | 1,324  |   |   |   | 1,106 |   |
|   FDIC and other insurance                           |   |               | 1,676  |   |   |   | 1,674 |   |
|   Other expense                                      |   |               | 2,927  |   |   |   | 1,089 |   |
|                                                           |   |               |   |   |   |   |   |   |
| Total noninterest expense                                      |   | $                  | 38,476 |   |   | $ | 37,110 |   |

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Table of Contents

ITEM 

ITEM 

| ITEM 1. | Legal Proceedings. |
|---------|--------------------|

| ITEM 1A. | Risk Factors. |
|----------|---------------|

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

|                   |         |                           | 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 (1)         | the plans or programs           |   |
| January 01 - 31, 2011  | -            | $      -   | -                             | 1,238,372                       |   |
| February 01 - 28, 2011 | 1,900        |      18.50 | 1,900                         | 1,236,472                       |   |
| March 01 - 31, 2011    | 7,000        |      18.35 | 7,000                         | 1,229,472                       |   |

| ITEM 3. | Defaults Upon Senior Securities. |
|---------|----------------------------------|

|   | None |
|--------|------|

| ITEM 4. | (Removed and reserved). |
|---------|-------------------------|

| ITEM 5. | Other Information. |
|---------|--------------------|

|   | None |
|--------|------|

| ITEM 6. | Exhibits |
|---------|----------|

|   | The following exhibits are filed with this report: |
|--------|----------------------------------------------------|

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

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

|   | 32.1 | Certification pursuant to 18 U.S.C. Section 1350 of Chief Executive Officer. |
|--------|------|------------------------------------------------------------------------------|

|   | 32.2 | Certification pursuant to 18 U.S.C. Section 1350 of Chief Financial Officer. |
|--------|------|------------------------------------------------------------------------------|

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SIGNATURES

|                                 |   | 1st Source Corporation                   |
|--------------------------------------|--------|------------------------------------------|
|                                 |   |                                     |
|                                 |   |                                     |
|                                 |   |                                     |
| DATE   April 21, 2011 |   | /s/CHRISTOPHER J. MURPHY III             |
|                                 |   | Christopher J. Murphy III                |
|                                 |   | Chairman of the Board, President and CEO |
|                                 |   |                                     |
|                                 |   |                                     |
| DATE  April 21, 2011       |   | /s/LARRY E. LENTYCH                      |
|                                 |   | Larry E. Lentych                         |
|                                 |   | Treasurer and Chief Financial Officer    |
|                                 |   | Principal Accounting Officer             |

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