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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

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

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

|   | Yes | X |   | No |   |   |
|--------|-----|---|--------|----|--------|--------|

|   | Large                accelerated filer |   |   | Accelerated                filer | X |   | Non-accelerated                filer |   |   |
|--------|----------------------------------------|--------|--------|----------------------------------|---|--------|--------------------------------------|--------|--------|

|   | Yes |   |   | No | X |   |
|--------|-----|--------|--------|----|---|--------|

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*Table          of Contents*

TABLE      OF CONTENTS

| PART                I.  FINANCIAL INFORMATION |                                                                                                                                            |
|---------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                    |                                                                                                                                            | Page |
| Item                1.                                  | Financial                Statements (Unaudited)                                                                                                 |   |
|                                                    | Consolidated                statements of financial condition -- September                30, 2007, and December 31, 2006                       | 3 |
|                                                    | Consolidated                statements of income -- three months and nine                months ended September 30, 2007 and 2006               | 4 |
|                                                    | Consolidated                statements of changes in shareholders’ equity --                nine months ended September 30, 2007 and 2006 | 5 |
|                                                    | Consolidated                statements of cash flows -- nine months ended                September 30, 2007 and 2006                            | 6 |
|                                                    | Notes                to the Consolidated Financial                Statements                                                                    | 7 |
| Item                2.                                  | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations                       | 12 |
| Item                3.                                  | Quantitative                and Qualitative Disclosures About Market                Risk                                                        | 23 |
| Item                4.                                  | Controls                and Procedures                                                                                                          | 23 |
|                                                    |                                                                                                                                            |   |
| PART                II.  OTHER INFORMATION    |                                                                                                                                            |
|                                                    |                                                                                                                                            |   |
| Item                1.                                  | Legal                Proceedings                                                                                                                | 24 |
| Item                1A.                                 | Risk                Factors                                                                                                                     | 24 |
| Item                2.                                  | Unregistered                Sales of Equity Securities and Use of                Proceeds                                                       | 24 |
| Item                3.                                  | Defaults                Upon Senior Securities                                                                                                  | 24 |
| Item                4.                                  | Submission                of Matters to a Vote of Security                Holders                                                               | 24 |
| Item                5.                                  | Other                Information                                                                                                                | 24 |
| Item                6.                                  | Exhibits                                                                                                                                        | 25 |
|                                                    |                                                                                                                                            |   |
| SIGNATURES                                              | 26                                                                                                                                              |
|                                                    |                                                                                                                                            |   |
| EXHIBITS                                                |                                                                                                                                            |
|                                                    |  Exhibit              31.1                                                                                                                 |   |
|                                                    |  Exhibit              31.2                                                                                                                 |   |
|                                                    |  Exhibit              32.1                                                                                                                 |   |
|                                                    |  Exhibit              32.2                                                                                                                 |   |

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*Table          of Contents*

| **1st                  SOURCE CORPORATION**                                                                                      |   |                           |      |   |                          |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|--------|-------------------------------|--------|
| **CONSOLIDATED                  STATEMENTS OF FINANCIAL                  CONDITION**                                             |   |                           |      |   |                          |   |
| **(Unaudited                  - Dollars in thousands)**                                                                          |   |                           |      |   |                          |   |
|                                                                                                                             |   | September                  30, |      |   | December                  31, |   |
|                                                                                                                             |   | 2007                           |      |   | 2006                          |   |
| **ASSETS**                                                                                                                       |   |                           |      |   |                          |   |
| Cash                  and due from banks                                                                                         |   | $                              | 117,564   |   |                          | $      | 118,131 |   |
| Federal                  funds sold and                                                                                          |   |                           |      |   |                          |   |   |   |
| interest                  bearing deposits with other banks                                                                      |   |                           | 3,754     |   |                          |   | 64,979 |   |
| Investment                  securities available-for-sale                                                                        |   |                           |      |   |                          |   |   |   |
| (amortized                  cost of $807,441and $709,091                                                                         |   |                           |      |   |                          |   |   |   |
| at                  September 30, 2007 and December 31, 2006, respectively)                                                      |   |                           | 810,802   |   |                          |   | 708,672 |   |
| Mortgages                  held for sale                                                                                         |   |                           | 25,074    |   |                          |   | 50,159 |   |
| Loans                  and leases - net of unearned discount:                                                                    |   |                           |      |   |                          |   |   |   |
| Commercial                  and agricultural loans                                                                               |   |                           | 585,842   |   |                          |   | 478,310 |   |
| Auto,                  light truck and environmental equipment                                                                   |   |                           | 330,967   |   |                          |   | 317,604 |   |
| Medium                  and heavy duty truck                                                                                     |   |                           | 315,116   |   |                          |   | 341,744 |   |
| Aircraft                  financing                                                                                              |   |                           | 583,533   |   |                          |   | 498,914 |   |
| Construction                  equipment financing                                                                                |   |                           | 377,069   |   |                          |   | 305,976 |   |
| Loans                  secured by real estate                                                                                    |   |                           | 858,818   |   |                          |   | 632,283 |   |
| Consumer                  loans                                                                                                  |   |                           | 150,250   |   |                          |   | 127,706 |   |
| Total                  loans and leases                                                                                          |   |                           | 3,201,595 |   |                          |   | 2,702,537 |   |
| Reserve                  for loan and lease losses                                                                               |   |                           | (64,664   | )      |                          |   | (58,802 | ) |
| Net                  loans and leases                                                                                            |   |                           | 3,136,931 |   |                          |   | 2,643,735 |   |
| Equipment                  owned under operating leases, net                                                                     |   |                           | 78,041    |   |                          |   | 76,310 |   |
| Net                  premises and equipment                                                                                      |   |                           | 49,272    |   |                          |   | 37,326 |   |
| Goodwill                  and intangile assets                                                                                   |   |                           | 91,546    |   |                          |   | 19,418 |   |
| Accrued                  income and other assets                                                                                 |   |                           | 99,667    |   |                          |   | 88,585 |   |
| Total                  assets                                                                                                    |   | $                              | 4,412,651 |   |                          | $      | 3,807,315 |   |
|                                                                                                                             |   |                           |      |   |                          |   |   |   |
| **LIABILITIES**                                                                                                                  |   |                           |      |   |                          |   |   |   |
| Deposits:                                                                                                                        |   |                           |      |   |                          |   |   |   |
| Noninterest                  bearing                                                                                             |   | $                              | 389,099   |   |                          | $      | 339,866 |   |
| Interest                  bearing                                                                                                |   |                           | 3,026,070 |   |                          |   | 2,708,418 |   |
| Total                  deposits                                                                                                  |   |                           | 3,415,169 |   |                          |   | 3,048,284 |   |
|                                                                                                                             |   |                           |      |   |                          |   |   |   |
| Federal                  funds purchased and securities                                                                          |   |                           |      |   |                          |   |   |   |
| sold                  under agreements to repurchase                                                                             |   |                           | 327,623   |   |                          |   | 195,262 |   |
| Other                  short-term borrowings                                                                                     |   |                           | 24,611    |   |                          |   | 27,456 |   |
| Long-term                  debt and mandatorily redeemable securities                                                            |   |                           | 44,303    |   |                          |   | 43,761 |   |
| Subordinated                  notes                                                                                              |   |                           | 100,002   |   |                          |   | 59,022 |   |
| Accrued                  expenses and other liabilities                                                                          |   |                           | 73,748    |   |                          |   | 64,626 |   |
| Total                  liabilities                                                                                               |   |                           | 3,985,456 |   |                          |   | 3,438,411 |   |
|                                                                                                                             |   |                           |      |   |                          |   |   |   |
| **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 25,918,510 at September 30, 2007                                           |   |                           |      |   |                          |   |   |   |
| and                  23,781,518 at December 31, 2006, less unearned shares                                                       |   |                           |      |   |                          |   |   |   |
| (275,004                  at September 30, 2007 and 262,986 at December 31, 2006)                                                |   |                           | 342,840   |   |                          |   | 289,163 |   |
| Retained                  earnings                                                                                               |   |                           | 112,938   |   |                          |   | 99,572 |   |
| Cost                  of common stock in treasury (1,470,523 shares at September 30,                  2007,                  and |   |                           |      |   |                          |   |   |   |
| 1,022,435                  shares at December 31, 2006)                                                                          |   |                           | (30,717   | )      |                          |   | (19,571 | ) |
| Accumulated                  other comprehensive income/(loss)                                                                   |   |                           | 2,134     |   |                          |   | (260 | ) |
| Total                  shareholders' equity                                                                                      |   |                           | 427,195   |   |                          |   | 368,904 |   |
| Total                  liabilities and shareholders' equity                                                                      |   | $                              | 4,412,651 |   |                          | $      | 3,807,315 |   |
|                                                                                                                             |   |                           |      |   |                          |   |   |   |
| The                  accompanying notes are a part of the consolidated financial                  statements.                    |   |                           |      |   |                          |   |   |   |

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*Table          of Contents*

| **1stSOURCE                  CORPORATION**                                                                    |   |                                |       |   |                               |   |       |   |   |   |       |   |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|--------|------------------------------------|--------|------------|--------|--------|--------|------------|--------|
| **CONSOLIDATED                  STATEMENTS OF                  INCOME**                                       |   |                                |       |   |                               |   |       |   |   |   |       |   |
| **(Unaudited                  - Dollars in thousands, except per share amounts)**                             |   |                                |       |   |                               |   |       |   |   |   |       |   |
|                                                                                                          |   | Three                  Months Ended |       |   | Nine                  Months Ended |   |
|                                                                                                          |   | September                  30,      |       |   | September                  30,     |   |
|                                                                                                          |   | 2007                                |       |   | 2006                               |   |       | 2007   |   |   | 2006       |   |
| Interest                  income:                                                                             |   |                                |       |   |                               |   |       |   |   |   |       |   |
| Loans                  and leases                                                                             |   | $                                   | 57,970     |   |                               | $      | 47,468     |   |   | $      | 159,322    |   |   | $ | 132,777 |   |
| Investment                  securities, taxable                                                               |   |                                | 7,365      |   |                               |   | 5,298      |   |   |   | 19,086     |   |   |   | 14,020 |   |
| Investment                  securities, tax-exempt                                                            |   |                                | 2,213      |   |                               |   | 1,279      |   |   |   | 5,351      |   |   |   | 3,838 |   |
| Other                                                                                                         |   |                                | 782        |   |                               |   | 334        |   |   |   | 2,856      |   |   |   | 921 |   |
| **Total                  interest income**                                                                    |   |                                | 68,330     |   |                               |   | 54,379     |   |   |   | 186,615    |   |   |   | 151,556 |   |
| Interest                  expense:                                                                            |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| Deposits                                                                                                      |   |                                | 31,184     |   |                               |   | 22,399     |   |   |   | 85,249     |   |   |   | 58,715 |   |
| Short-term                  borrowings                                                                        |   |                                | 2,978      |   |                               |   | 2,776      |   |   |   | 8,240      |   |   |   | 8,358 |   |
| Subordinated                  notes                                                                           |   |                                | 1,846      |   |                               |   | 1,098      |   |   |   | 4,236      |   |   |   | 3,228 |   |
| Long-term                  debt and mandatorily redeemable securities                                         |   |                                | 624        |   |                               |   | 655        |   |   |   | 2,049      |   |   |   | 1,560 |   |
| **Total                  interest expense**                                                                   |   |                                | 36,632     |   |                               |   | 26,928     |   |   |   | 99,774     |   |   |   | 71,861 |   |
| **Net                  interest income**                                                                      |   |                                | 31,698     |   |                               |   | 27,451     |   |   |   | 86,841     |   |   |   | 79,695 |   |
| Provision                  for (recovery of provision for) loan and lease losses                              |   |                                | 3,660      |   |                               |   | (667       | )      |   |   | 4,284      |   |   |   | (2,638 | ) |
| **Net                  interest income after provision for**                                                  |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| **(recovery                  of provision for) loan and lease losses**                                   |   |                                | 28,038     |   |                               |   | 28,118     |   |   |   | 82,557     |   |   |   | 82,333 |   |
| Noninterest                  income:                                                                          |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| Trust                  fees                                                                                   |   |                                | 3,853      |   |                               |   | 3,271      |   |   |   | 11,367     |   |   |   | 10,320 |   |
| Service                  charges on deposit accounts                                                          |   |                                | 5,278      |   |                               |   | 5,020      |   |   |   | 15,074     |   |   |   | 14,323 |   |
| Mortgage                  banking income                                                                      |   |                                | 770        |   |                               |   | 4,971      |   |   |   | 2,400      |   |   |   | 9,833 |   |
| Insurance                  commissions                                                                        |   |                                | 964        |   |                               |   | 1,012      |   |   |   | 3,540      |   |   |   | 3,626 |   |
| Equipment                  rental income                                                                      |   |                                | 5,345      |   |                               |   | 5,032      |   |   |   | 15,730     |   |   |   | 13,910 |   |
| Other                  income                                                                                 |   |                                | 1,841      |   |                               |   | 1,740      |   |   |   | 6,042      |   |   |   | 4,873 |   |
| Investment                  securities and other investment (losses) gains                                    |   |                                | (154       | )      |                               |   | (223       | )      |   |   | 300        |   |   |   | 2,010 |   |
| **Total                  noninterest income**                                                                 |   |                                | 17,897     |   |                               |   | 20,823     |   |   |   | 54,453     |   |   |   | 58,895 |   |
| Noninterest                  expense:                                                                         |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| Salaries                  and employee benefits                                                               |   |                                | 20,035     |   |                               |   | 17,433     |   |   |   | 55,754     |   |   |   | 49,820 |   |
| Net                  occupancy expense                                                                        |   |                                | 2,467      |   |                               |   | 1,854      |   |   |   | 6,552      |   |   |   | 5,581 |   |
| Furniture                  and equipment expense                                                              |   |                                | 3,996      |   |                               |   | 2,936      |   |   |   | 10,838     |   |   |   | 9,029 |   |
| Depreciation                  - leased equipment                                                              |   |                                | 4,284      |   |                               |   | 4,031      |   |   |   | 12,603     |   |   |   | 10,960 |   |
| Supplies                  and communication                                                                   |   |                                | 1,666      |   |                               |   | 1,358      |   |   |   | 4,450      |   |   |   | 4,028 |   |
| Other  expense                                                                                      |   |                                | 4,992      |   |                               |   | 4,212      |   |   |   | 13,489     |   |   |   | 14,198 |   |
| **Total                  noninterest expense**                                                                |   |                                | 37,440     |   |                               |   | 31,824     |   |   |   | 103,686    |   |   |   | 93,616 |   |
| Income                  before income taxes                                                                   |   |                                | 8,495      |   |                               |   | 17,117     |   |   |   | 33,324     |   |   |   | 47,612 |   |
| Income                  tax expense                                                                           |   |                                | 2,365      |   |                               |   | 6,153      |   |   |   | 10,611     |   |   |   | 16,438 |   |
|                                                                                                          |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| **Net                  income**                                                                               |   | $                                   | 6,130      |   |                               | $      | 10,964     |   |   | $      | 22,713     |   |   | $ | 31,174 |   |
|                                                                                                          |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| Per                  common share:                                                                            |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| Basic                  net income per common share                                                            |   | $                                   | 0.25       |   |                               | $      | 0.49       |   |   | $      | 0.97       |   |   | $ | 1.38 |   |
| Diluted                  net income per common share                                                          |   | $                                   | 0.25       |   |                               | $      | 0.48       |   |   | $      | 0.96       |   |   | $ | 1.36 |   |
| Dividends                  declared                                                                           |   | $                                   | 0.140      |   |                               | $      | 0.140      |   |   | $      | 0.420      |   |   | $ | 0.394 |   |
| Basic                  weighted average common shares outstanding                                             |   |                                | 24,275,794 |   |                               |   | 22,497,930 |   |   |   | 23,309,281 |   |   |   | 22,549,914 |   |
| Diluted                  weighted average common shares outstanding                                           |   |                                | 24,567,404 |   |                               |   | 22,811,273 |   |   |   | 23,603,676 |   |   |   | 22,843,785 |   |
|                                                                                                          |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |
| The                  accompanying notes are a part of the consolidated financial                  statements. |   |                                |       |   |                               |   |       |   |   |   |       |   |   |   |   |   |

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*Table          of Contents*

| **1stSOURCE                CORPORATION**                                                                  |   |       |        |   |   |       |        |
|-----------------------------------------------------------------------------------------------------------|--------|------------|-------------|--------|--------|------------|-------------|
| **CONSOLIDATED                STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY**                              |   |       |        |   |   |       |        |
| **(Unaudited                - Dollars in thousands, except per share amounts)**                           |   |       |        |   |   |       |        |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   | Net |   |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   | Unrealized |   |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   | Appreciation |   |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   | Cost                of |   |   | (Depreciation) |   |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   | Common |   |   | of                Securities |   |
|                                                                                                      |   |       |        |   | Common |       |        | Retained |   |   | Stock |   |   | Available- |   |
|                                                                                                      |   | Total      |        |   | Stock  |       |        | Earnings |   |   | in                Treasury |   |   | For-Sale |   |
| **Balance                at January 1, 2006**                                                             |   | **$**      | **345,576** |   |   | **$**      | **221,579** |   |   | **$** | **139,601** |   |   | **$** | **(12,364** | **)** |   | **$** | **(3,240** | **)** |
| **Comprehensive                Income, net of tax:**                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                Income**                                                                             |   | ** ** | **31,174**  |   |   | ** ** | **-**       |   |   | ** ** | **31,174** |   |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **Change                in unrealized appreciation**                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **of                available-for-sale securities, net of tax**                                           |   | ** ** | **2,321**   |   |   | ** ** | **-**       |   |   | ** ** | **-** |   |   | ** ** | **-** |   |   | ** ** | **2,321** |   |
| **Total                Comprehensive Income**                                                             |   | ** ** | **33,495**  |   |   | ** ** | **-**       |   |   | ** ** | **-** |   |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **Issuance                of 94,089 common shares**                                                       |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **under                stock based compensation awards,**                                                 |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **including                related tax effects**                                                          |   | ** ** | **709**     |   |   | ** ** | **-**       |   |   | ** ** | **353** |   |   | ** ** | **356** |   |   | ** ** | **-** |   |
| **Cost                of 328,931 shares of common**                                                       |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **stock                acquired for treasury**                                                            |   | ** ** | **(7,385**  | **)**  |   | ** ** | **-**       |   |   | ** ** | **-** |   |   | ** ** | **(7,385** | **)** |   | ** ** | **-** |   |
| **Cash                dividend ($0.394 per share)**                                                       |   | ** ** | **(8,937**  | **)**  |   | ** ** | **-**       |   |   | ** ** | **(8,937** | **)** |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **10%                common stock dividend**                                                              |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **($12                cash paid in lieu of fractional shares)**                                           |   | ** ** | **(12**     | **)**  |   | ** ** | **67,584**  |   |   | ** ** | **(67,596** | **)** |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **Balance                at September 30, 2006**                                                          |   | **$**      | **363,446** |   |   | **$**      | **289,163** |   |   | **$** | **94,595** |   |   | **$** | **(19,393** | **)** |   | **$** | **(919** | **)** |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                at January 1, 2007**                                                             |   | **$**      | **368,904** |   |   | **$**      | **289,163** |   |   | **$** | **99,572** |   |   | **$** | **(19,571** | **)** |   | **$** | **(260** | **)** |
| **Comprehensive                Income, net of tax:**                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                Income**                                                                             |   | ** ** | **22,713**  |   |   | ** ** | **-**       |   |   | ** ** | **22,713** |   |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **Change                in unrealized appreciation**                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **of                available-for-sale securities, net of tax**                                           |   | ** ** | **2,394**   |   |   | ** ** | **-**       |   |   | ** ** | **-** |   |   | ** ** | **-** |   |   | ** ** | **2,394** |   |
| **Total                Comprehensive Income**                                                             |   | ** ** | **25,107**  |   |   | ** ** | **-**       |   |   | ** ** | **-** |   |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **Issuance                of 40,349 common shares**                                                       |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **under                stock based compensation awards,**                                                 |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **including                related tax effects**                                                          |   | ** ** | **544**     |   |   | ** ** | **-**       |   |   | ** ** | **384** |   |   | ** ** | **160** |   |   | ** ** | **-** |   |
| **Cost                of 478,083 shares of common**                                                       |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **stock                acquired for treasury**                                                            |   | ** ** | **(11,306** | **)**  |   | ** ** | **-**       |   |   | ** ** | **-** |   |   | ** ** | **(11,306** | **)** |   | ** ** | **-** |   |
| **Cash                dividend ($0.42 per share)**                                                        |   | ** ** | **(9,731**  | **)**  |   | ** ** | **-**       |   |   | ** ** | **(9,731** | **)** |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **Issuance                of 2,124,974 shares of common**                                                 |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **stock                for FINA Bancorp purchase**                                                        |   | ** ** | **53,677**  |   |   | ** ** | **53,677**  |   |   | ** ** | **-** |   |   | ** ** | **-** |   |   | ** ** | **-** |   |
| **Balance                at September 30, 2007**                                                          |   | **$**      | **427,195** |   |   | **$**      | **342,840** |   |   | **$** | **112,938** |   |   | **$** | **(30,717** | **)** |   | **$** | **2,134** |   |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The                accompanying notes are a part of the consolidated financial                statements. |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |       |        |   |   |       |        |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table          of Contents*

| **1st                  SOURCE                  CORPORATION**                                                  |   |                                             |     |    |   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|----------|---------|--------|--------|
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS**                                                    |   |                                             |     |    |   |   |
| **(Unaudited                  - Dollars in thousands)**                                                       |   |                                             |     |    |   |   |
|                                                                                                          |   | Nine                  Months Ended September 30, |     |
|                                                                                                          |   | 2007                                             |     |    | 2006   |   |
| Operating                  activities:                                                                        |   |                                             |     |    |   |   |
| Net                  income                                                                                   |   | $                                                | 22,713   |    |   | $      | 31,174 |   |
| Adjustments                  to reconcile net income to net cash                                              |   |                                             |     |    |   |   |   |   |
| from/(used                  in) operating activities:                                                         |   |                                             |     |    |   |   |   |   |
| Provision                  for (recovery of provision for) loan and lease losses                              |   |                                             | 4,284    |    |   |   | (2,638 | ) |
| Depreciation                  of premises and equipment                                                       |   |                                             | 3,905    |    |   |   | 3,689 |   |
| Depreciation                  of equipment owned under operating leases                                       |   |                                             | 12,603   |    |   |   | 10,960 |   |
| Amortization                  of investment security premiums                                                 |   |                                             |     |    |   |   |   |   |
| and                  accretion of discounts, net                                                              |   |                                             | (273     | )       |   |   | 159 |   |
| Amortization                  of mortgage servicing rights                                                    |   |                                             | 1,753    |    |   |   | 3,930 |   |
| Mortgage                  servicing asset impairment recoveries                                               |   |                                             | -        |    |   |   | (16 | ) |
| Change                  in deferred income taxes                                                              |   |                                             | (3,226   | )       |   |   | (5,878 | ) |
| Realized                  investment securities gains                                                         |   |                                             | (300     | )       |   |   | (2,010 | ) |
| Change                  in mortgages held for sale                                                            |   |                                             | 25,085   |    |   |   | 13,039 |   |
| Change                  in interest receivable                                                                |   |                                             | (3,538   | )       |   |   | (1,705 | ) |
| Change                  in interest payable                                                                   |   |                                             | 2,816    |    |   |   | 5,104 |   |
| Change                  in other assets                                                                       |   |                                             | (1,303   | )       |   |   | 577 |   |
| Change                  in other liabilities                                                                  |   |                                             | (867     | )       |   |   | (67 | ) |
| Other                                                                                                         |   |                                             | 1,328    |    |   |   | 77 |   |
| Net                  change in operating activities                                                           |   |                                             | 64,980   |    |   |   | 56,395 |   |
|                                                                                                          |   |                                             |     |    |   |   |   |   |
| Investing                  activities:                                                                        |   |                                             |     |    |   |   |   |   |
|     Cash                  paid for acquisition, net of cash acquired                      |   |                                             | (55,977  | )       |   |   | - |   |
| Proceeds                  from sales of investment securities                                                 |   |                                             | 1,070    |    |   |   | 64,623 |   |
| Proceeds                  from maturities of investment securities                                            |   |                                             | 445,847  |    |   |   | 216,996 |   |
| Purchases                  of investment securities                                                           |   |                                             | (360,199 | )       |   |   | (272,058 | ) |
| Net                  change in short-term investments                                                         |   |                                             | 217,400  |    |   |   | 10,836 |   |
| Net                  change in loans and leases                                                               |   |                                             | (261,770 | )       |   |   | (160,780 | ) |
| Net                  change in equipment owned under operating leases                                         |   |                                             | (14,333  | )       |   |   | (26,928 | ) |
| Purchases                  of premises and equipment                                                          |   |                                             | (13,600  | )  |   |   | (3,010 | ) |
| Net                  change in investing activities                                                           |   |                                             | (41,562  | )       |   |   | (170,321 | ) |
|                                                                                                          |   |                                             |     |    |   |   |   |   |
| Financing                  activities:                                                                        |   |                                             |     |    |   |   |   |   |
| Net                  change in demand deposits, NOW                                                           |   |                                             |     |    |   |   |   |   |
| accounts                  and savings accounts                                                                |   |                                             | (230,677 | )       |   |   | (320,060 | ) |
| Net                  change in certificates of deposit                                                        |   |                                             | 75,420   |    |   |   | 459,741 |   |
| Net                  change in short-term borrowings                                                          |   |                                             | 111,331  |    |   |   | (68,259 | ) |
| Proceeds                  from issuance of long-term debt                                                     |   |                                             | -        |    |   |   | 20,972 |   |
| Proceeds                  from issuance of subordinated notes                                                 |   |                                             | 58,764   |    |   |   | - |   |
| Payments                  on subordinated notes                                                               |   |                                             | (17,784  | )       |   |   | - |   |
| Payments                  on long-term debt                                                                   |   |                                             | (381     | )       |   |   | (337 | ) |
| Net                  proceeds from issuance of treasury stock                                                 |   |                                             | 545      |    |   |   | 709 |   |
| Acquisition                  of treasury stock                                                                |   |                                             | (11,306  | )       |   |   | (7,385 | ) |
| Cash                  dividends                                                                               |   |                                             | (9,897   | )       |   |   | (9,106 | ) |
| Net                  change in financing activities                                                           |   |                                             | (23,985  | )       |   |   | 76,275 |   |
| Net                  change in cash and cash equivalents                                                      |   |                                             | (567     | )       |   |   | (37,651 | ) |
| Cash                  and cash equivalents, beginning of year                                                 |   |                                             | 118,131  |    |   |   | 124,817 |   |
| Cash                  and cash equivalents, end of period                                                     |   | $                                                | 117,564  |    |   | $      | 87,166 |   |
|                                                                                                          |   |                                             |     |    |   |   |   |   |
| Supplemental                  non-cash activity:                                                              |   |                                             |     |    |   |   |   |   |
| Common                  stock issued for purchase of FINA                                                     |   | $                                                | 53,667   |    |   | $      | - |   |
|                                                                                                          |   |                                             |     |    |   |   |   |   |
| The                  accompanying notes are a part of the consolidated financial                  statements. |   |                                             |     |    |   |   |   |   |

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*Table          of Contents*

**1ST      SOURCE CORPORATION**

**NOTES      TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Accounting for Certain Loans or Debt Securities Acquired in a Transfer*

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*Table          of Contents*

**Pro      Forma Condensed Combined Financial Information**

|                                                                                                                                        |   | Three                Months Ended September 30, |       |   | Nine                Months Ended September 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|------------|--------|------------------------------------------------|--------|
|                                                                                                                                        |   | 2007                                                 |       |   | 2006                                           |   |   | 2007 |   |   | 2006 |   |
| Net                interest income after provision for (recovery of provision for) loan                and                lease losses |   | $                                                    | 28,038     |   |                                           | $      | 32,759 |   |   | $ | 89,946 |   |   | $ | 96,388 |   |
| Noninterest                income                                                                                                           |   |                                                 | 17,897     |   |                                           |   | 17,936 |   |   |   | 61,704 |   |   |   | 57,167 |   |
| Noninterest                expense                                                                                                          |   |                                                 | 37,440     |   |                                           |   | 36,382 |   |   |   | 112,769 |   |   |   | 107,537 |   |
| Income                before income taxes                                                                                                   |   |                                                 | 8,495      |   |                                           |   | 14,313 |   |   |   | 38,881 |   |   |   | 46,018 |   |
| Income                tax expense                                                                                                           |   |                                                 | 2,365      |   |                                           |   | 5,018 |   |   |   | 12,670 |   |   |   | 15,541 |   |
| Net                income                                                                                                                   |   | $                                                    | 6,130      |   |                                           | $      | 9,295 |   |   | $ | 26,211 |   |   | $ | 30,477 |   |
|                                                                                                                                        |   |                                                 |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |                                                 |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                        |   |                                                 |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
| Per                common share:                                                                                                            |   |                                                 |       |   |                                           |   |   |   |   |   |   |   |   |   |   |   |
|   Basic                net income per common share                                                                                |   | $                                                    | 0.25       |   |                                           | $      | 0.38 |   |   | $ | 1.07 |   |   | $ | 1.24 |   |
|   Diluted                net income per common share                                                                              |   | $                                                    | 0.25       |   |                                           | $      | 0.37 |   |   | $ | 1.06 |   |   | $ | 1.24 |   |
| Basic                weighted average common shares outstanding                                                                             |   |                                                 | 24,275,794 |   |                                           |   | 24,622,904 |   |   |   | 24,484,634 |   |   |   | 24,674,888 |   |
| Diluted                weighted average common shares outstanding                                                                           |   |                                                 | 24,567,404 |   |                                           |   | 24,936,247 |   |   |   | 24,781,991 |   |   |   | 24,968,759 |   |

*Fair Value Measurements*

*“The Fair Value      Option for Financial Assets and Financial Liabilities – Including an Amendment      of FASB No. 115” *

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*Table          of Contents*

*Accounting for Uncertainty in Income      Taxes—an interpretation of FASB Statement No. 109”*

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*Table          of Contents*

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*Table          of Contents*

|                                                               |   |                                |    |   |                        |   |   |                        |   |   |                        |   |
|--------------------------------------------------------------------|--------|-------------------------------------|---------|--------|-----------------------------|--------|--------|-----------------------------|--------|--------|-----------------------------|--------|
|                                                               |   | September                  30, 2007 |    |   |                        |   |   |                        |   |
|                                                               |   |                                |    |   |                        |   |   | Average                     |   |   |                        |   |
|                                                               |   |                                |    |   | Weighted                    |   |   | Remaining                   |   |   | Total                       |   |
|                                                               |   |                                |    |   | Average                     |   |   | Contractual                 |   |   | Intrinsic                   |   |
|                                                               |   | Number                  of          |    |   | Grant-date                  |   |   | Term                        |   |   | Value                       |   |
|                                                               |   | Shares                              |    |   | Fair                  Value |   |   | (in                  years) |   |   | (in                  000's) |   |
|                                                               |   |                                |    |   |                        |   |   |                        |   |   |                        |   |
| Options                  outstanding, beginning of year            |   |                                | 489,475 |   |                        | $      | 26.04  |                        |   |   |                        |   |   |   |
| Granted                                                            |   |                                | 2,696   |   |                        |   | 28.40  |                        |   |   |                        |   |   |   |
| Exercised                                                          |   |                                | (20,654 | )      |                        |   | 15.63  |                        |   |   |                        |   |   |   |
| Forfeited                                                          |   |                                | -       |   |                        |   | -      |                        |   |   |                        |   |   |   |
| Options                  outstanding, September 30, 2007           |   |                                | 471,517 |   |                        | $      | 26.51  |                        |   |   | 1.37                        |   |   | $ | 400 |   |
|                                                               |   |                                |    |   |                        |   |   |                        |   |   |                        |   |   |   |   |   |
|                                                               |   |                                |    |   |                        |   |   |                        |   |   |                        |   |   |   |   |   |
| Vested                  and expected to vest at September 30, 2007 |   |                                | 471,517 |   |                        |   |   |                        |   |   | 1.37                        |   |   | $ | 400 |   |
| Exercisable                  at September 30, 2007                 |   |                                | 457,821 |   |                        |   |   |                        |   |   | 1.26                        |   |   | $ | 281 |   |
|                                                               |   |                                |    |   |                        |   |   |                        |   |   |                        |   |   |   |   |   |

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*Table          of Contents*

|                            |                     | 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 | 29,508                   | 4.99        | $13.38   | 18,508                   | $14.18   |
| $18.00                to $26.99 | 55,587                   | 3.08        | 21.06    | 55,587                   | 21.06    |
| $27.00                to $28.40 | 386,422                  | 0.85        | 28.30    | 383,726                  | 28.30    |

**ITEM      2.**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION AND RESULTS OF OPERATIONS**

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*Table          of Contents*

**IMPACT      OF FIRST NATIONAL BANK, VALPARAISO ACQUISITION**

| **Selected                - Balance Sheet                Items**                                              |   |                      |      |   |                         |   |    |                        |   |   |                        |   |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------|-----------|--------|------------------------------|--------|---------|-----------------------------|--------|--------|-----------------------------|--------|
| (Unaudited                - Dollars in thousands)                                                             |   |                      |      |   |                         |   |    |                        |   |   |                        |   |
|                                                                                                          |   | 1st                Source |      |   |                         |   |    | 1st                Source   |   |   | 1st                Source   |   |
|                                                                                                          |   | Consolidated              |      |   | FNBV                         |   |    | Without                FNBV |   |   | Consolidated                |   |
|                                                                                                          |   | September 30,        |      |   | September                30, |   |    | September 30,          |   |   | December                31, |   |
|                                                                                                          |   | 2007                      |      |   | 2007                         |   |    | 2007                        |   |   | 2006                        |   |
| Investment                securities available-for-sale                                                       |   | $                         | 810,802   |   |                         | $      | 93,007  |                        |   | $      | 717,795                     |   |   | $ | 708,672 |   |
|                                                                                                          |   |                      |      |   |                         |   |    |                        |   |   |                        |   |   |   |   |   |
| Total                loans and leases                                                                         |   |                      | 3,201,595 |   |                         |   | 241,577 |                        |   |   | 2,960,018                   |   |   |   | 2,702,537 |   |
|    Reserve                for loan and lease losses                                            |   |                      | (64,664   | )      |                         |   | (2,212  | )                           |   |   | (62,452                     | )      |   |   | (58,802 | ) |
| Net                loans and leases                                                                           |   |                      | 3,136,931 |   |                         |   | 239,365 |                        |   |   | 2,897,566                   |   |   |   | 2,643,735 |   |
|                                                                                                          |   |                      |      |   |                         |   |    |                        |   |   |                        |   |   |   |   |   |
| Net                premises and equipment                                                                     |   |                      | 49,272    |   |                         |   | 20,998  |                        |   |   | 28,274                      |   |   |   | 37,326 |   |
|                                                                                                          |   |                      |      |   |                         |   |    |                        |   |   |                        |   |   |   |   |   |
| Goodwill                and other intangible assets                                                           |   |                      | 91,546    |   |                         |   | 71,559  |                        |   |   | 19,987                      |   |   |   | 19,418 |   |
|                                                                                                          |   |                      |      |   |                         |   |    |                        |   |   |                        |   |   |   |   |   |
| Deposits:                                                                                                     |   |                      |      |   |                         |   |    |                        |   |   |                        |   |   |   |   |   |
|   Noninterest                bearing                                                                |   |                      | 389,099   |   |                         |   | 47,815  |                        |   |   | 341,284                     |   |   |   | 339,866 |   |
|   Interest                bearing                                                                   |   |                      | 3,026,070 |   |                         |   | 464,157 |                        |   |   | 2,561,913                   |   |   |   | 2,708,418 |   |
| Total                deposits                                                                                 |   |                      | 3,415,169 |   |                         |   | 511,972 |                        |   |   | 2,903,197                   |   |   |   | 3,048,284 |   |
|                                                                                                          |   |                      |      |   |                         |   |    |                        |   |   |                        |   |   |   |   |   |
| Federal                funds purchased and securities sold under agreements to                repurchase |   |                      | 327,623   |   |                         |   | 16,932  |                        |   |   | 310,691                     |   |   |   | 195,262 |   |
|                                                                                                          |   |                      |      |   |                         |   |    |                        |   |   |                        |   |   |   |   |   |
| Total                assets                                                                                   |   |                      | 4,412,651 |   |                         |   | 669,326 |                        |   |   | 3,743,325                   |   |   |   | 3,807,315 |   |

**FINANCIAL      CONDITION**

----

*Table          of Contents*

|                                                            |   |                           |   |   |                          |   |
|-----------------------------------------------------------------|--------|--------------------------------|--------|--------|-------------------------------|--------|
| (Dollars                  in Thousands)                         |   |                           |   |
|                                                            |   |                           |   |
|                                                            |   | September                  30, |   |   | December                  31, |   |
|                                                            |   | 2007                           |   |   | 2006                          |   |
| Other                  assets:                                  |   |                           |   |   |                          |   |
| Bank                  owned life insurance cash surrender value |   | $                              | 38,829 |   |                          | $      | 36,157 |   |
| Accrued                  interest receivable                    |   |                           | 21,534 |   |                          |   | 17,997 |   |
| Mortgage                  servicing assets                      |   |                           | 7,617  |   |                          |   | 7,572 |   |
| Other                  real estate                              |   |                           | 2,679  |   |                          |   | 800 |   |
| Repossessions                                                   |   |                           | 3,430  |   |                          |   | 975 |   |
| All                  other assets                               |   |                           | 25,578 |   |                          |   | 25,084 |   |
| Total                  other assets                             |   | $                              | 99,667 |   |                          | $      | 88,585 |   |
|                                                            |   |                           |   |   |                          |   |   |   |

**CAPITAL**

----

*Table          of Contents*

|                                                     |   |   |         |   |     |   |        |                             |   |   |                             |   |   |                             |       |   |   |   |
|----------------------------------------------------------|--------|--------|--------------|--------|----------|--------|-------------|----------------------------------|--------|--------|----------------------------------|--------|--------|----------------------------------|------------|--------|--------|--------|
|                                                     |   |   |         |   |     |   |        |                             |   |   |                             |   |   | 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                    |   | $      | 478,081      |   |     |   | 13.07       | %                                |   | $      | 292,727                          |   |   |                             | 8.00       | %      |   | $      | 365,909 |   |   |   | 10.00 | % |
| 1st                Source Bank                           |   |   | 402,275      |   |     |   | 11.83       |                             |   |   | 271,933                          |   |   |                             | 8.00       |   |   |   | 339,917 |   |   |   | 10.00 |   |
| FNBV                                                     |   |   | 63,626  |   |     |   |  22.94 |                             |   |   | 22,193                           |   |   |                             | 8.00       |   |   |   | 27,741 |   |   |   | 10.00 |   |
| Tier                1 Capital (to Risk-Weighted Assets): |   |   |         |   |     |   |        |                             |   |   |                             |   |   |                             |       |   |   |   |   |   |   |   |   |   |
| 1st                Source Corporation                    |   |   | 430,365      |   |     |   | 11.76       |                             |   |   | 146,364                          |   |   |                             | 4.00       |   |   |   | 219,545 |   |   |   | 6.00 |   |
| 1st                Source Bank                           |   |   | 358,692      |   |     |   | 10.55       |                             |   |   | 135,967                          |   |   |                             | 4.00       |   |   |   | 203,950 |   |   |   | 6.00 |   |
| FNBV                                                     |   |   | 61,414       |   |     |   | 22.14       |                             |   |   | 11,096                           |   |   |                             | 4.00       |   |   |   | 16,645 |   |   |   | 6.00 |   |
| Tier                1 Capital (to Average Assets):       |   |   |         |   |     |   |        |                             |   |   |                             |   |   |                             |       |   |   |   |   |   |   |   |   |   |
| 1st                Source Corporation                    |   |   | 430,365      |   |     |   | 9.88        |                             |   |   | 174,198                          |   |   |                             | 4.00       |   |   |   | 217,747 |   |   |   | 5.00 |   |
| 1st                Source Bank                           |   |   | 358,692      |   |     |   | 9.08        |                             |   |   | 157,990                          |   |   |                             | 4.00       |   |   |   | 197,487 |   |   |   | 5.00 |   |
| FNBV                                                     |   |   | 61,414       |   |     |   | 9.82        |                             |   |   | 25,022                           |   |   |                             |  4.00 |   |   |   | 31,277 |   |   |   | 5.00 |   |

**LIQUIDITY      AND INTEREST RATE SENSITIVITY**

**SUBORDINATED      DEBT**

**RESULTS      OF OPERATIONS**

----

*Table          of Contents*

**NET      INTEREST INCOME**

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*Table          of Contents*

----

*Table          of Contents*

| **DISTRIBUTION                OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY**                             |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|-----------|--------|-----------------------------------------------------|--------|--------|--------|--------|--------|---------|--------|--------|----------|-----------|--------|--------|--------|------------|---------|--------|--------|
| **INTEREST                RATES AND INTEREST DIFFERENTIAL**                                                 |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |
| **(Dollars                in thousands)**                                                                   |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |
|                                                                                                        |   | Three                months ended September 30, |      |   | Nine months                ended September 30, |   |
|                                                                                                        |   |                                            |      |   | 2007                                                |   |   |   |   |   |    |   |   | 2006     |      |   |   |   |       |    |   |   | 2007 |   |   |   |   |   |   |   |   | 2006 |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   | Interest                                            |   |   |   |   |   |    |   |   | Interest |      |   |   |   |       |    |   |   | Interest |   |   |   |   |   |   |   |   | Interest |   |   |   |   |
|                                                                                                        |   | Average                                         |      |   | Income/                                             |   |   | Yield/ |   |   | Average |   |   | Income/  |      |   | Yield/ |   |       | Average |   |   | Income/ |   |   | Yield/ |   |   | Average |   |   | Income/ |   |   | Yield/ |   |
|                                                                                                        |   | Balance                                         |      |   | Expense                                             |   |   | Rate   |   |   | Balance |   |   | Expense  |      |   | Rate   |   |       | Balance |   |   | Expense |   |   | Rate |   |   | Balance |   |   | Expense |   |   | Rate |   |
| **ASSETS:**                                                                                                 |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                securities:                                                                       |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                     |   | $                                               | 586,111   |   |                                                | $      | 7,365  |   |   |   | 4.99    | %      |   | $        | 464,331   |   |   | $      | 5,298      |    |   |   | 4.53 | % |   | $ | 521,943 |   |   | $ | 19,086 |   |   |   | 4.89 | % |   | $ | 458,816 |   |   | $ | 14,020 |   |   |   | 4.09 | % |
| Tax                exempt                                                                                   |   |                                            | 255,200   |   |                                                |   | 3,150  |   |   |   | 4.90    | %      |   |     | 169,520   |   |   |   | 1,825      |    |   |   | 4.27 | % |   |   | 215,656 |   |   |   | 7,619 |   |   |   | 4.72 | % |   |   | 172,853 |   |   |   | 5,507 |   |   |   | 4.26 | % |
| Mortgages                - held for sale                                                                    |   |                                            | 21,722    |   |                                                |   | 393    |   |   |   | 7.18    | %      |   |     | 57,501    |   |   |   | 994        |    |   |   | 6.86 | % |   |   | 30,850 |   |   |   | 1,525 |   |   |   | 6.61 | % |   |   | 54,878 |   |   |   | 2,737 |   |   |   | 6.67 | % |
| Net                loans and leases                                                                         |   |                                            | 3,179,234 |   |                                                |   | 57,677 |   |   |   | 7.20    | %      |   |     | 2,614,743 |   |   |   | 46,541     |    |   |   | 7.06 | % |   |   | 2,930,077 |   |   |   | 158,086 |   |   |   | 7.21 | % |   |   | 2,538,558 |   |   |   | 130,270 |   |   |   | 6.86 | % |
| Other                investments                                                                            |   |                                            | 61,540    |   |                                                |   | 782    |   |   |   | 5.04    | %      |   |     | 25,288    |   |   |   | 334        |    |   |   | 5.24 | % |   |   | 73,290 |   |   |   | 2,856 |   |   |   | 5.21 | % |   |   | 25,349 |   |   |   | 921 |   |   |   | 4.86 | % |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                Earning Assets                                                                         |   |                                            | 4,103,807 |   |                                                |   | 69,367 |   |   |   | 6.71    | %      |   |     | 3,331,383 |   |   |   | 54,992     |    |   |   | 6.55 | % |   |   | 3,771,816 |   |   |   | 189,172 |   |   |   | 6.71 | % |   |   | 3,250,454 |   |   |   | 153,455 |   |   |   | 6.31 | % |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and due from banks                                                                      |   |                                            | 86,794    |   |                                                |   |   |   |   |   |    |   |   |     | 79,129    |   |   |   |       |    |   |   |   |   |   |   | 78,323 |   |   |   |   |   |   |   |   |   |   |   | 79,707 |   |   |   |   |   |   |   |   |   |
| Reserve                for loan and lease   losses                                           |   |                                            | (62,513   | )      |                                                |   |   |   |   |   |    |   |   |     | (59,195   | )      |   |   |       |    |   |   |   |   |   |   | (60,274 | ) |   |   |   |   |   |   |   |   |   |   | (59,110 | ) |   |   |   |   |   |   |   |   |
| Other                assets                                                                                 |   |                                            | 318,631   |   |                                                |   |   |   |   |   |    |   |   |     | 223,557   |   |   |   |       |    |   |   |   |   |   |   | 264,079 |   |   |   |   |   |   |   |   |   |   |   | 217,057 |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                       |   | $                                               | 4,446,719 |   |                                                |   |   |   |   |   |    |   |   | $        | 3,574,874 |   |   |   |       |    |   |   |   |   |   | $ | 4,053,944 |   |   |   |   |   |   |   |   |   |   | $ | 3,488,108 |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITIES                AND SHAREHOLDERS' EQUITY:**                                |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   | ** ** |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                deposits                                                                    |   | $                                               | 3,134,368 |   |                                                | $      | 31,184 |   |   |   | 3.95    | %      |   | $        | 2,444,033 |   |   | $      | 22,399     |    |   |   | 3.64 | % |   | $ | 2,852,381 |   |   | $ | 85,249 |   |   |   | 4.00 | % |   | $ | 2,343,973 |   |   | $ | 58,715 |   |   |   | 3.35 | % |
| Short-term                borrowings                                                                        |   |                                            | 297,543   |   |                                                |   | 2,978  |   |   |   | 3.97    | %      |   |     | 260,249   |   |   |   | 2,776      |    |   |   | 4.23 | % |   |   | 262,748 |   |   |   | 8,240 |   |   |   | 4.19 | % |   |   | 274,263 |   |   |   | 8,358 |   |   |   | 4.07 | % |
| Subordinated                notes                                                                           |   |                                            | 100,089   |   |                                                |   | 1,846  |   |   |   | 7.32    | %      |   |     | 59,022    |   |   |   | 1,098      |    |   |   | 7.38 | % |   |   | 76,486 |   |   |   | 4,236 |   |   |   | 7.40 | % |   |   | 59,022 |   |   |   | 3,228 |   |   |   | 7.31 | % |
| Long-term                debt and                                                                           |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       mandatorilyredeemable    securities |   |                                            | 44,200    |   |                                                |   | 624    |   |   |   | 5.60    | %      |   |     | 39,493    |   |   |   | 655        |    |   |   | 6.58 | % |   |   | 43,777 |   |   |   | 2,049 |   |   |   | 6.26 | % |   |   | 34,691 |   |   |   | 1,560 |   |   |   | 6.01 | % |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                Interest-Bearing Liabilities                                                           |   |                                            | 3,576,200 |   |                                                |   | 36,632 |   |   |   | 4.06    | %      |   |     | 2,802,797 |   |   |   | 26,928     |    |   |   | 3.81 | % |   |   | 3,235,392 |   |   |   | 99,774 |   |   |   | 4.12 | % |   |   | 2,711,949 |   |   |   | 71,861 |   |   |   | 3.54 | % |
| Noninterest                bearing                    deposits                          |   |                                            | 355,825   |   |                                                |   |   |   |   |   |    |   |   |     | 346,473   |   |   |   |       |    |   |   |   |   |   |   | 340,758 |   |   |   |   |   |   |   |   |   |   |   | 360,505 |   |   |   |   |   |   |   |   |   |
| Other                liabilities                                                                            |   |                                            | 83,984    |   |                                                |   |   |   |   |   |    |   |   |     | 65,205    |   |   |   |       |    |   |   |   |   |   |   | 77,228 |   |   |   |   |   |   |   |   |   |   |   | 61,663 |   |   |   |   |   |   |   |   |   |
| Shareholders'                equity                                                                         |   |                                            | 430,710   |   |                                                |   |   |   |   |   |    |   |   |     | 360,399   |   |   |   |       |    |   |   |   |   |   |   | 400,566 |   |   |   |   |   |   |   |   |   |   |   | 353,991 |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                       |   | $                                               | 4,446,719 |   |                                                |   |   |   |   |   |    |   |   | $        | 3,574,874 |   |   |   |       |    |   |   |   |   |   | $ | 4,053,944 |   |   |   |   |   |   |   |   |   |   | $ | 3,488,108 |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Interest Income                                                                          |   |                                            |      |   |                                                | $      | 32,735 |   |   |   |    |   |   |     |      |   |   | $      | 28,064     |    |   |   |   |   |   |   |   |   |   | $ | 89,398 |   |   |   |   |   |   |   |   |   |   | $ | 81,594 |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                Yield on Earning Assets on                a Taxable Equivalent                           |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basis                                                                                                       |   |                                            |      |   |                                                |   |   |   |   |   | 3.16    | %      |   |     |      |   |   |   |       |    |   |   | 3.34 | % |   |   |   |   |   |   |   |   |   |   | 3.17 | % |   |   |   |   |   |   |   |   |   |   | 3.36 | % |
|                                                                                                        |   |                                            |      |   |                                                |   |   |   |   |   |    |   |   |     |      |   |   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Table            of            Contents*

**PROVISION      AND RESERVE FOR LOAN AND LEASE LOSSES**

|                                                                           |   | Summary                of Reserve for Loan and Lease Losses |      |
|--------------------------------------------------------------------------------|--------|-------------------------------------------------------------|-----------|
|                                                                           |   | (Dollars                in Thousands)                       |      |
|                                                                           |   | Three                Months Ended                           |      |   | Nine                Months Ended |   |
|                                                                           |   | September                30,                                |      |   | September                30, |   |
|                                                                           |   | 2007                                                        |      |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |
| Reserve                for loan and lease losses - beginning balance           |   | $                                                           | 62,682    |   |   | $ | 59,197 |   |   | $ | 58,802 |   |   | $ | 58,697 |   |
| Acquired                reserves from acquisitions                             |   |                                                        | -         |   |   |   | - |   |   |   | 2,214 |   |   |   | - |   |
| Charge-offs                                                                    |   |                                                        | (2,579    | ) |   |   | (932 | ) |   |   | (5,009 | ) |   |   | (2,303 | ) |
| Recoveries                                                                     |   |                                                        | 901       |   |   |   | 1,404 |   |   |   | 4,373 |   |   |   | 5,246 |   |
| Net                (charge-offs)/recoveries                                    |   |                                                        | (1,678    | ) |   |   | 472 |   |   |   | (636 | ) |   |   | 2,943 |   |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for (recovery of provision for) loan and lease losses |   |                                                        | 3,660     |   |   |   | (667 | ) |   |   | 4,284 |   |   |   | (2,638 | ) |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reserve                for loan and lease losses - ending balance              |   | $                                                           | 64,664    |   |   | $ | 59,002 |   |   | $ | 64,664 |   |   | $ | 59,002 |   |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                and leases outstanding at end of period                   |   | $                                                           | 3,201,595 |   |   | $ | 2,627,153 |   |   | $ | 3,201,595 |   |   | $ | 2,627,153 |   |
| Average                loans and leases outstanding during period              |   |                                                        | 3,179,234 |   |   |   | 2,614,743 |   |   |   | 2,930,077 |   |   |   | 2,538,558 |   |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reserve                for loan and lease losses as a percentage of            |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| loans                and leases outstanding at end of period                   |   |                                                        | 2.02      | % |   |   | 2.25 | % |   |   | 2.02 | % |   |   | 2.25 | % |
| Ratio                of net recoveries/(charge-offs) during period to          |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| average                loans and leases outstanding                            |   |                                                        | (0.23     | )% |   |   | 0.07 | % |   |   | (0.04 | )% |   |   | 0.16 | % |

----

*Table            of Contents*

**NONPERFORMING      ASSETS**

| (Dollars                  in thousands)                       |   |                           |   |   |                          |   |   |                           |   |
|---------------------------------------------------------------|--------|--------------------------------|--------|--------|-------------------------------|--------|--------|--------------------------------|--------|
|                                                          |   | September                  30, |   |   | December                  31, |   |   | September                  30, |   |
|                                                          |   | 2007                           |   |   | 2006                          |   |   | 2006                           |   |
|                                                          |   |                           |   |   |                          |   |   |                           |   |
|                                                          |   |                           |   |   |                          |   |   |                           |   |
| Loans                  and leases past due 90 days or more    |   | $                              | 693    |   |                          | $      | 116    |                           |   | $ | 264 |   |
| Nonaccrual                  and restructured loans and leases |   |                           | 10,211 |   |                          |   | 15,575 |                           |   |   | 11,248 |   |
| Other                  real estate                            |   |                           | 2,679  |   |                          |   | 800    |                           |   |   | 759 |   |
| Repossessions                                                 |   |                           | 3,430  |   |                          |   | 975    |                           |   |   | 2,356 |   |
| Equipment                  owned under operating leases       |   |                           | 114    |   |                          |   | 201    |                           |   |   | 66 |   |
|                                                          |   |                           |   |   |                          |   |   |                           |   |   |   |   |
| Total                  nonperforming assets                   |   | $                              | 17,127 |   |                          | $      | 17,667 |                           |   | $ | 14,693 |   |

**Supplemental      Loan and Lease Information as of September 30,      2007**

| (Dollars                  in thousands)                        |   |                              |      |   | Nonaccrual                          |   |   | Other                  real estate |   |   | Year-to-date                        |   |
|----------------------------------------------------------------|--------|-----------------------------------|-----------|--------|-------------------------------------|--------|--------|------------------------------------|--------|--------|-------------------------------------|--------|
|                                                           |   | Loans                  and leases |      |   | and                                 |   |   | owned                  and         |   |   | net                  credit losses/ |   |
|                                                           |   | outstanding                       |      |   | restructured                  loans |   |   | repossessions                      |   |   | (recoveries)                        |   |
|                                                           |   |                              |      |   |                                |   |   |                               |   |   |                                |   |
| Commercial                  and agricultural loans             |   | $                                 | 585,842   |   |                                | $      | 715    |                               |   | $      | -                                   |   |   | $ | (875 | ) |
| Auto,                  light truck and environmental equipment |   |                              | 330,967   |   |                                |   | 674    |                               |   |   | 1,520                               |   |   |   | 1,477 |   |
| Medium                  and heavy duty truck                   |   |                              | 315,116   |   |                                |   | 583    |                               |   |   | 141                                 |   |   |   | 413 |   |
| Aircraft                  financing                            |   |                              | 583,533   |   |                                |   | 759    |                               |   |   | 1,350                               |   |   |   | (1,325 | ) |
| Construction                  equipment financing              |   |                              | 377,069   |   |                                |   | 488    |                               |   |   | 367                                 |   |   |   | 535 |   |
| Loans                  secured by real estate                  |   |                              | 858,818   |   |                                |   | 5,621  |                               |   |   | 824                                 |   |   |   | 16 |   |
| Consumer                  loans                                |   |                              | 150,250   |   |                                |   | 255    |                               |   |   | 52                                  |   |   |   | 298 |   |
|                                                           |   |                              |      |   |                                |   |   |                               |   |   |                                |   |   |   |   |   |
| Total                                                          |   | $                                 | 3,201,595 |   |                                | $      | 9,095  |                               |   | $      | 4,254                               |   |   | $ | 539 |   |

----

*Table          of Contents*

**NONINTEREST      INCOME**

|                                                                                   |   |                                |   |   |                               |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------|--------|-------------------------------------|--------|--------|------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| (Dollars                  in thousands)                                                |   | Three                  Months Ended |   |   | Nine                  Months Ended |   |
|                                                                                   |   | September                  30,      |   |   | September                  30,     |   |
|                                                                                   |   | 2007                                |   |   | 2006                               |   |   | 2007   |   |   | 2006   |   |
| Noninterest                  income:                                                   |   |                                |   |   |                               |   |   |   |   |   |   |   |
|   Trust                  fees                                                |   | $                                   | 3,853  |   |                               | $      | 3,271  |   |   | $      | 11,367 |   |   | $ | 10,320 |   |
|   Service                  charges on deposit accounts                       |   |                                | 5,278  |   |                               |   | 5,020  |   |   |   | 15,074 |   |   |   | 14,323 |   |
|   Mortgage                  banking income                                   |   |                                | 770    |   |                               |   | 4,971  |   |   |   | 2,400  |   |   |   | 9,833 |   |
|   Insurance                  commissions                                     |   |                                | 964    |   |                               |   | 1,012  |   |   |   | 3,540  |   |   |   | 3,626 |   |
|   Equipment                  rental income                                   |   |                                | 5,345  |   |                               |   | 5,032  |   |   |   | 15,730 |   |   |   | 13,910 |   |
|   Other                  income                                              |   |                                | 1,841  |   |                               |   | 1,740  |   |   |   | 6,042  |   |   |   | 4,873 |   |
|   Investment                  securities and other investment (losses) gains |   |                                | (154   | )      |                               |   | (223   | )      |   |   | 300    |   |   |   | 2,010 |   |
|                                                                                   |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Total                  noninterest income                                              |   | $                                   | 17,897 |   |                               | $      | 20,823 |   |   | $      | 54,453 |   |   | $ | 58,895 |   |

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*Table          of Contents*

**NONINTEREST      EXPENSE**

| (Dollars                  in thousands)                             |   | Three                  Months Ended |   |   | Nine                  Months Ended |   |
|---------------------------------------------------------------------|--------|-------------------------------------|--------|--------|------------------------------------|--------|
|                                                                |   | September                  30,      |   |   | September                  30,     |   |
|                                                                |   | 2007                                |   |   | 2006                               |   |   | 2007 |   |   | 2006 |   |
| Noninterest                  expense:                               |   |                                |   |   |                               |   |   |   |   |   |   |   |
| Salaries                  and employee benefits                     |   | $                                   | 20,035 |   |                               | $      | 17,433 |   |   | $ | 55,754 |   |   | $ | 49,820 |   |
| Net                  occupancy expense                              |   |                                | 2,467  |   |                               |   | 1,854 |   |   |   | 6,552 |   |   |   | 5,581 |   |
| Furniture                  and equipment expense                    |   |                                | 3,996  |   |                               |   | 2,936 |   |   |   | 10,838 |   |   |   | 9,029 |   |
| Depreciation                  - leased equipment                    |   |                                | 4,284  |   |                               |   | 4,031 |   |   |   | 12,603 |   |   |   | 10,960 |   |
| Professional                  fees                                  |   |                                | 921    |   |                               |   | 939 |   |   |   | 3,089 |   |   |   | 2,928 |   |
| Supplies                  and communication                         |   |                                | 1,666  |   |                               |   | 1,358 |   |   |   | 4,450 |   |   |   | 4,028 |   |
| Business                  development and marketing expense         |   |                                | 1,028  |   |                               |   | 879 |   |   |   | 3,302 |   |   |   | 2,568 |   |
| Intangible                  asset amortization                      |   |                                | 287    |   |                               |   | 417 |   |   |   | 524 |   |   |   | 1,742 |   |
| Loan                  and lease collection and repossession expense |   |                                | 345    |   |                               |   | 58 |   |   |   | 670 |   |   |   | 333 |   |
| Other                  expense                                      |   |                                | 2,411  |   |                               |   | 1,919 |   |   |   | 5,904 |   |   |   | 6,627 |   |
|                                                                |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Total                  noninterest expense                          |   | $                                   | 37,440 |   |                               | $      | 31,824 |   |   | $ | 103,686 |   |   | $ | 93,616 |   |
|                                                                |   |                                |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |

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*Table          of Contents*

**INCOME      TAXES**

**ITEM      3.**

**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**ITEM      4.**

**CONTROLS      AND PROCEDURES**

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*Table          of Contents*

**PART      II.  OTHER INFORMATION**

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

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

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

**ISSUER      PURCHASES OF EQUITY SECURITIES**

|                                                                                                                                                                                 |                              |                                |                                               |                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|-------------------------------------|----------------------------------------------------|------------------------------------------------------|
|                                                                                                                                                                                 |                                   |                                     |                                                    |                                                 |
|                                                                                                                                                                                 |                              |                                | **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**           |
| July                  01 - 31, 2007                                                                                                                                                  | 39,808                            | $21.44                              | **39,808**                                         | **1,732,790**                                        |
| August                  01 - 31, 2007                                                                                                                                                | 204,469                           | $21.22                              | **204,469**                                        | **1,528,321**                                        |
| September                  01 - 30, 2007                                                                                                                                             | -                                 | -                                   | **-**                                              | **1,528,321**                                        |
|                                                                                                                                                                                 |                              |                                |                                               |                                                 |
|                                                                                                                                                                                 |                              |                                |                                               |                                                 |
| (1)1st                  Source                  maintains a stock repurchase plan that was authorized by the Board                  of                  Directors on April 26, 2007. |
| Under                  the terms of the plan, 1st Source may repurchase up to 2,000,000                  shares of                  its common stock when                            |
| favorable                  conditions exist on the open market or through private transactions                  at                  various prices from time to time.                |
| Since                  the inception of the plan, 1st Source has repurchased a total of                  471,679                  shares.                                            |

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

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

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

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

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

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

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*Table            of Contents*

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

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

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

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

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

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

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*Table            of Contents*

SI

|                                                    |   | 1st                  Source Corporation                   |
|---------------------------------------------------------|--------|-----------------------------------------------------------|
|                                                    |   |                                                      |
|                                                    |   |                                                      |
|                                                    |   |                                                      |
| DATE   October                  25, 2007 |   | /s/CHRISTOPHER                  J. MURPHY III             |
|                                                    |   | Christopher                  J. Murphy III                |
|                                                    |   | Chairman                  of the Board, President and CEO |
|                                                    |   |                                                      |
|                                                    |   |                                                      |
| DATE   October                  25, 2007 |   | /s/LARRY                  E. LENTYCH                      |
|                                                    |   | Larry                  E. Lentych                         |
|                                                    |   | Treasurer                  and Chief Financial Officer    |
|                                                    |   | Principal                  Accounting Officer             |

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*Table          of Contents*