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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 30, 2014
1st Source Corporation
(Exact name of registrant as specified in its charter)
Indiana	0-6233	35-1068133
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)
100 North Michigan Street, South Bend, Indiana 46601
(Address of principal executive offices)     (Zip Code)
574-235-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.02    Results of Operations and Financial Condition.

On July 24, 2014, 1st Source Corporation issued a press release that announced its second quarter earnings for 2014. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

ITEM 7.01    Regulation FD Disclosure

On July 24, 2014, the Board of Directors of 1st Source Corporation authorized the repurchase, by the Corporation, of up to 2,000,000 shares of its outstanding common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. This authorization shall supersede any prior repurchase authorizations.

ITEM 9.01    Financial Statements and Exhibits.

 

Exhibit 99.1: Press release dated July 24, 2014, with respect to 1st Source Corporation’s financial results for the second quarter ended June 30, 2014.

SIGNATURE

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

		1st SOURCE CORPORATION
		(Registrant)
Date: July 24, 2014		/s/ CHRISTOPHER J. MURPHY III
		Christopher J. Murphy III
		Chairman of the Board, President and CEO
Date: July 24, 2014		/s/ ANDREA G. SHORT
		Andrea G. Short
		Treasurer and Chief Financial Officer
		Principal Accounting Officer

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Exhibit 99.1

For:	Immediate Release	Contact:	Andrea Short
	July 24, 2014		574-235-2000

Second Quarter Earnings Increase at 1st Source Corporation,

Dividend Declared

South Bend, IN - 1st Source Corporation (Nasdaq:SRCE), parent company of 1st Source Bank, today reported net income of $14.49 million for the second quarter of 2014, up 3.96% over the $13.94 million earned in the second quarter of 2013. Year to date, net income was $28.13 million, up 6.76% compared to the first six months of last year. Diluted net income per common share for the second quarter amounted to $0.59, up 5.36% compared to $0.56 for the second quarter of 2013. Diluted net income per common share for the first half of 2014 was $1.15, an increase of 7.48%, compared to the $1.07 earned a year earlier.

At its July meeting, the Board of Directors approved a cash dividend of $0.18 per common share. The dividend is payable to shareholders of record on August 5, 2014 and will be paid on August 15, 2014.

According to Christopher J. Murphy, III, Chairman, "1st Source Corporation turned in a solid performance in the second quarter. Loan growth was healthy, up $145.97 million this quarter over the previous quarter, and up $230.15 million over the same quarter a year ago. In spite of somewhat lower yields, we have successfully maintained our net interest margin which held steady at 3.59%. Similar to national trends, in our markets we are seeing a consolidation of clients and a return of some of our competitors to loan structure and pricing practices that were prominent before the financial market meltdown in 2008. If this continues, it could put further pressure on interest margins and adversely impact credit quality across the country."

"Also, we opened a new banking center at the University of Notre Dame, along with the installation of 5 additional ATMs on the campus. This enhances our ability to better serve students, faculty and staff, as well as the University's administrative offices. We are remodeling some of the banking centers in our system to serve our clients more conveniently and effectively. Four of the banking centers have been completed and more are scheduled to finish in September," Mr. Murphy concluded.

Total assets were $4.93 billion, up 6.19% from a year earlier. Total loans and leases were $3.72 billion, up 6.59% from June 30, 2013. Total deposits were $3.82 billion, up 3.11% from the comparable figures at June 30, 2013. As of June 30, 2014, the common equity-to-assets ratio was 12.06%, down from 12.24% a year ago and the tangible common equity-to-tangible assets ratio was 10.50% compared to 10.56% a year earlier.

The net interest margin was 3.59% for the second quarter of 2014 versus 3.65% for the same period in 2013. The net interest margin was 3.59% for the six months ended June 30, 2014, versus 3.64% for the same period in 2013. Tax-equivalent net interest income was $40.62 million for the second quarter of 2014, compared to the $39.32 million from 2013's second quarter. For the first six months of 2014, tax-equivalent net interest income was $79.71 million, compared to $77.54 million for the first six months of 2013.

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The reserve for loan and lease losses as of June 30, 2014 was 2.38% of total loans and leases compared to 2.45% at June 30, 2013. Net recoveries of $1.22 million were recorded for the second quarter of 2014, compared with net recoveries of $0.39 million in the same quarter a year ago. Year-to-date, net recoveries of $1.92 million have been recorded in 2014, compared to net recoveries of $0.33 million for the first half of 2013. The provision for loan and lease losses was $2.54 million for the second quarter of 2014, compared with $1.29 million from the same period in 2013. For the first six months of 2014, the provision for loan and lease losses was $3.35 million compared with $2.05 million for the first six months of 2013. The ratio of nonperforming assets to net loans and leases was 1.08% as of June 30, 2014 up from 1.01% on June 30, 2013.

Noninterest income for the second quarter of 2014 was $19.22 million, down 4.47% from same period in 2013. The decrease for the quarter was mainly attributed to lower mortgage banking income. For the first six months of 2014, noninterest income was $38.62 million, down 1.15% compared to 2013 primarily as a result of lower mortgage banking income and losses on partnership investments.

Noninterest expense was $34.42 million for the second quarter of 2014, down 3.69% from the second quarter of 2013. For the first six months of 2014, noninterest expense was $70.40 million, down 2.63% compared with $72.29 million for the same period in 2013. Noninterest expense decreased primarily as a result of lower loan and lease collection and repossession expenses and reduced salaries and benefits.

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

1st Source serves the northern half of Indiana and southwest Michigan and is the largest locally controlled financial institution headquartered in the area. While delivering a comprehensive range of consumer and commercial banking services through its community bank offices, 1st Source has distinguished itself with highly personalized services. 1st Source Bank also competes for business nationally by offering specialized financing services for new and used private and cargo aircraft, automobiles for leasing and rental agencies, medium and heavy duty trucks, construction and environmental equipment. The Corporation includes 78 community banking centers in 17 counties, 9 trust and wealth management locations, 8 1st Source Insurance offices, as well as 21 specialty finance locations nationwide. Celebrating 150 years, 1st Source has a history dating back to 1863. The Bank has a tradition of providing superior service to clients while playing a leadership role in the continued development of the communities it serves.

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

1st Source may be accessed on its home page at “www.1stsource.com.” Its common stock is traded on the NASDAQ Global Select Market under "SRCE" and appears in the National Market System tables in many daily newspapers under the code name "1st Src". Except for historical information contained herein, the matters discussed in this document express “forward-looking statements.” Generally, the words “believe,” “contemplate,” “seek,” “plan,” “possible,”

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“assume,” “expect,” “intend,” “targeted,” “continue,” “remain,” “estimate,” “anticipate,” “project,” “will,” “should,” “indicate,” “would,” “may” and similar expressions indicate forward-looking statements. Those statements, including statements, projections, estimates or assumptions concerning future events or performance, and other statements that are other than statements of historical fact, are subject to material risks and uncertainties. 1st Source cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made.

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

# # #

(charts attached)

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1st SOURCE CORPORATION
2nd QUARTER 2014 FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in thousands, except per share data)
		Three Months Ended   June 30,									Six Months Ended   June 30,
		2014				2013					2014				2013
END OF PERIOD BALANCES
Assets											$	4,925,727			$	4,638,811
Loans and leases											3,723,535				3,493,385
Deposits											3,815,735				3,700,799
Reserve for loan and lease losses											88.776				85,690
Intangible assets											85,796				86,915
Common shareholders' equity											594,218				567,753
AVERAGE BALANCES
Assets		$	4,831,313			$	4,611,953				$	4,765,107			$	4,577,806
Earning assets		4,539,093				4,326,264					4,477,086				4,294,509
Investments		835,755				843,870					833,688				850,425
Loans and leases		3,662,156				3,419,723					3,603,016				3,381,093
Deposits		3,764,043				3,719,007					3,717,259				3,691,791
Interest bearing liabilities		3,451,752				3,305,196					3,396,660				3,284,762
Common shareholders' equity		599,292				574,867					597,002				570,220
INCOME STATEMENT DATA
Net interest income		$	40,162			$	38,871				$	78,780			$	76,625
Net interest income - FTE		40,622				39,324					79,709				77,544
Provision for loan and lease losses		2,543				1,293					3,347				2,050
Noninterest income		19,221				20,121					38,619				39,069
Noninterest expense		34,424				35,744					70,396				72,294
Net income		14,494				13,942					28,126				26,346
PER SHARE DATA
Basic net income per common share		$	0.59			$	0.56				$	1.15			$	1.07
Diluted net income per common share		0.59				0.56					1.15				1.07
Common cash dividends declared		0.18				0.17					0.35				0.34
Book value per common share		24.89				23.29					24.89				23.29
Tangible book value per common share		21.30				19.73					21.30				19.73
Market value - High		33.21				25.25					33.21				25.25
Market value - Low		28.76				22.65					27.56				21.88
Basic weighted average common shares outstanding		24,077,990				24,367,529					24,197,057				24,344,882
Diluted weighted average common shares outstanding		24,077,990				24,368,973					24,197,057				24,346,053
KEY RATIOS
Return on average assets		1.20			%	1.21			%		1.19			%	1.16			%
Return on average common shareholders' equity		9.70				9.73					9.50				9.32
Average common shareholders' equity to average assets		12.40				12.46					12.53				12.46
End of period tangible common equity to tangible assets		10.50				10.56					10.50				10.56
Risk-based capital - Tier 1		13.97				14.23					13.97				14.23
Risk-based capital - Total		15.28				15.55					15.28				15.55
Net interest margin		3.59				3.65					3.59				3.64
Efficiency: expense to revenue		55.59				59.00					57.01				61.03
Net charge offs to average loans and leases		(0.13		)		(0.05		)			(0.11		)		(0.02		)
Loan and lease loss reserve to loans and leases		2.38				2.45					2.38				2.45
Nonperforming assets to loans and leases		1.08				1.01					1.08				1.01
ASSET QUALITY
Loans and leases past due 90 days or more											$	475			$	184
Nonaccrual loans and leases											32,486				29,318
Other real estate											1,853				5,455
Former bank premises held for sale											801				951
Repossessions											5,455				137
Equipment owned under operating leases											23				—
Total nonperforming assets											$	41,093			$	36,045

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1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited - Dollars in thousands)
		June 30, 2014				June 30, 2013
ASSETS
Cash and due from banks		$	110,933			$	64,850
Federal funds sold and interest bearing deposits with other banks		6,445				3,171
Investment securities available-for-sale (amortized cost of $798,708 and $815,626 at June 30, 2014 and 2013, respectively)		815,056				828,312
Other investments		23,597				22,409
Trading account securities		198				166
Mortgages held for sale		19,034				10,849
Loans and leases, net of unearned discount:
Commercial and agricultural loans		720,226				660,380
Auto and light truck		471,080				475,209
Medium and heavy duty truck		243,358				213,947
Aircraft financing		733,194				677,510
Construction equipment financing		369,755				311,135
Commercial real estate		602,321				576,810
Residential real estate		454,845				454,983
Consumer loans		128,756				123,411
Total loans and leases		3,723,535				3,493,385
Reserve for loan and lease losses		(88,776		)		(85,690		)
Net loans and leases		3,634,759				3,407,695
Equipment owned under operating leases, net		63,350				52,856
Net premises and equipment		45,840				46,027
Goodwill and intangible assets		85,796				86,915
Accrued income and other assets		120,719				115,561
Total assets		$	4,925,727			$	4,638,811
LIABILITIES
Deposits:
Noninterest bearing		$	768,710			$	698,389
Interest bearing		3,047,025				3,002,410
Total deposits		3,815,735				3,700,799
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase		191,545				162,778
Other short-term borrowings		158,457				39,126
Total short-term borrowings		350,002				201,904
Long-term debt and mandatorily redeemable securities		59,726				58,216
Subordinated notes		58,764				58,764
Accrued expenses and other liabilities		47,282				51,375
Total liabilities		4,331,509				4,071,058
SHAREHOLDERS' EQUITY
Preferred stock; no par value		—				—
Common stock; no par value		346,535				346,535
Retained earnings		280,917				241,401
Cost of common stock in treasury		(43,445		)		(28,021		)
Accumulated other comprehensive income		10,211				7,838
Total shareholders' equity		594,218				567,753
Total liabilities and shareholders' equity		$	4,925,727			$	4,638,811

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1st SOURCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - Dollars in thousands)
	Three Months Ended   June 30,								Six Months Ended   June 30,
	2014				2013				2014				2013
Interest income:
Loans and leases	$	40,401			$	40,112			$	79,316			$	79,282
Investment securities, taxable	3,401				3,498				6,746				7,193
Investment securities, tax-exempt	816				760				1,635				1,531
Other	232				241				509				483
Total interest income	44,850				44,611				88,206				88,489
Interest expense:
Deposits	2,994				4,412				5,965				8,954
Short-term borrowings	169				45				306				77
Subordinated notes	1,055				1,055				2,110				2,110
Long-term debt and mandatorily redeemable securities	470				228				1,045				723
Total interest expense	4,688				5,740				9,426				11,864
Net interest income	40,162				38,871				78,780				76,625
Provision for loan and lease losses	2,543				1,293				3,347				2,050
Net interest income after provision for loan and lease losses	37,619				37,578				75,433				74,575
Noninterest income:
Trust fees	4,955				4,439				9,431				8,540
Service charges on deposit accounts	2,207				2,325				4,273				4,564
Debit card income	2,463				2,344				4,695				4,409
Mortgage banking income	1,181				1,936				2,515				3,564
Insurance commissions	1,288				1,393				2,851				2,839
Equipment rental income	4,098				4,086				8,180				8,098
Gains on investment securities available-for-sale	—				—				963				—
Other income	3,029				3,598				5,711				7,055
Total noninterest income	19,221				20,121				38,619				39,069
Noninterest expense:
Salaries and employee benefits	18,827				19,176				38,309				39,112
Net occupancy expense	2,235				2,147				4,672				4,354
Furniture and equipment expense	4,413				3,909				8,650				7,808
Depreciation - leased equipment	3,290				3,274				6,539				6,499
Professional fees	1,062				1,310				2,190				2,665
Supplies and communication	1,337				1,499				2,729				3,035
FDIC and other insurance	850				927				1,714				1,805
Business development and marketing expense	899				932				2,583				1,705
Loan and lease collection and repossession expense	(17		)		1,095				(512		)		1,852
Other expense	1,528				1,475				3,522				3,459
Total noninterest expense	34,424				35,744				70,396				72,294
Income before income taxes	22,416				21,955				43,656				41,350
Income tax expense	7,922				8,013				15,530				15,004
Net income	$	14,494			$	13,942			$	28,126			$	26,346
The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP #336901 10 3)
Please contact us at shareholder@1stsource.com

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