SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-6233
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
TRUSTCORP MORTGAGE COMPANY EMPLOYEE RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
1ST SOURCE CORPORATION
100 N. Michigan Street
South Bend, Indiana 46601
REQUIRED INFORMATION
FINANCIAL STATEMENTS:
A list of the required financial statements filed as part of this Form
11-K is set forth on page F-1. The consent of Ernst & Young LLP to the
incorporation by reference of these financial statements into 1st Source
Corporation's Form S-8 Registration Statement relating to the Plan (Reg. No.
333-64306) is set forth hereto as Exhibit 23.1.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRUSTCORP MORTGAGE COMPANY
EMPLOYEE RETIREMENT SAVINGS PLAN
By the Plan Administrator:
TRUSTCORP MORTGAGE COMPANY
Date: June 28, 2002 /s/ Jay Rudynski
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Jay Rudynski, Chief Financial Officer
Trustcorp Mortgage Company
Employee Retirement Savings Plan
For the years ended December 31, 2001 and 2000
Contents
Report of Independent Accountants ...........................................1
Financial Statements
Statements of Net Assets Available for Benefits..............................2
Statements of Changes in Net Assets Available for Benefits...................3
Notes to Financial Statements................................................4
Schedule
Schedule of Assets Held for Investment Purposes At End of Year...............8
Report of Independent Accountants
Board of Directors
Trustcorp Mortgage Company
We have audited the accompanying statements of net assets available for benefits
of the Trustcorp Mortgage Company Employee Retirement Savings Plan as of
December 31, 2001 and 2000, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes at end of year as of December 31, 2001, is
presented for purposes of additional analysis and is not a required part of the
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
s/Ernst & Young LLP
Columbus, Ohio
May 24, 2002
Trustcorp Mortgage Company Employee Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31
2001 2000
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Assets
Cash and cash equivalents $ 35,549 $ 38,551
Investments at fair value
Common stock 627,067 709,639
Mutual funds 2,477,279 2,138,717
1st Source Bank common trust fund 132,486 118,609
Participant loans receivable 183,721 209,013
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Total investments 3,420,553 3,175,978
Contribution receivable
Employer 210,427 81,323
Employee 25,256 14,734
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235,683 96,057
Other assets
Accrued investment income 5,355 196
Investment sales receivable - 77,013
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5,355 77,209
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Total assets 3,697,140 3,387,795
Liabilities
Accrued expenses payable 9,281 17,603
Investment purchases payable - 132,649
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Total liabilites 9,281 150,252
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Net assets available for benefits $ 3,687,859 $ 3,237,543
==================================
See accompanying notes.
Trustcorp Mortgage Company Employee Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the year ended
December 31
2001 2000
---------------------------
Additions
Investment income:
Interest $ 20,899 $ 19,239
Dividends 47,264 40,820
Capital (losses) gains (24,517) 229,485
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43,646 289,544
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Contributions:
Employer 319,670 160,544
Employee 304,717 204,305
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624,387 364,849
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Total additions 668,033 654,393
Deductions
Net (appreciation) depreciation in fair value of investments (32,422) 157,859
Benefits paid to participants 225,831 690,827
Plan expenses 24,308 25,545
-----------------------------
Total deductions 217,717 874,231
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Net increase (decrease) 450,316 (219,838)
Net assets available for benefits:
Beginning of year 3,237,543 3,457,381
-----------------------------
End of year $3,687,859 $3,237,543
=============================
See accompanying notes.
Trustcorp Mortgage Company Employee Retirement Savings Plan
Notes to Financial Statements
December 31, 2001
1. Description of the Plan
General
The Trustcorp Mortgage Company Employee Retirement Savings Plan (the "Plan") is
a defined contribution plan covering substantially all employees of Trustcorp
Mortgage Company ("Trustcorp") who have attained age 21 and completed one year
of service in which the employee has worked 1,000 hours. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Trustcorp is a wholly owned subsidiary of 1st Source Corporation.
The Board of Directors of Trustcorp Mortgage Company may authorize a
contribution from consolidated net profit or retained earnings in excess of the
401(k) matching contributions which are also approved by the Board. These
discretionary contributions are made in cash and are allocated to each
participant based upon provisions of the Plan Agreement.
Funding and Vesting
Participants are permitted to designate up to 15% of their annual compensation
as a salary reduction contribution to the Plan under Section 401(k) of the
Internal Revenue Code. When applying the discretionary matching contributions,
only salary reductions up to six percent (6%) of eligible employee compensation
is considered. For the year 2001 and 2000, the discretionary matching
contribution percentage was 50%. In addition, as part of the profit sharing
component of the Plan, Trustcorp has the discretion to make an additional
contribution to the Plan, out of current or accumulated net profits. For the
years 2001 and 2000, this discretionary contribution was equal to $202,000 and
$76,000, respectively.
Vesting of participant contributions and Trustcorp's 401(k) matching
contributions are immediate. Vesting of the Trustcorp contributions for the
profit sharing component of the Plan is based on years of credited service, with
participants becoming 100% vested after seven years of credited service.
However, a participant becomes 100% vested upon satisfying the requirements for
early retirement under the terms of the Plan document.
Each participant's account is credited with the participant's contribution and
an allocation of (a) Trustcorp's contribution, (b) Plan earnings net of Plan
expenses, and (c) forfeitures of terminated participants' non-vested accounts.
Allocations are based on participant compensation or account balances, as
defined. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's vested account balance.
Trustcorp Mortgage Company Employee Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Loans
Participants may borrow from the Plan amounts not to exceed the lesser of
one-half of the participant's vested account balance or $50,000. The loans are
collateralized by the participant's vested account balance and bear interest at
fixed rates of 1% above the national prime rate as posted in the Wall Street
Journal. The loans are repayable over five years except for loans used to
acquire or construct a participant's principal residence, in which case the
repayment term may be up to ten years.
Payment of Benefits
On termination of service, a participant may elect to receive either a lump-sum
amount equal to the value of his or her vested account balance or periodic
installments in accordance with Plan provisions. At December 31, 2001 and 2000,
$283,396 and $311,778 respectively, has been allocated to participants who had
effectively withdrawn from the Plan as of the end of those respective years, but
had yet to receive their final distribution.
Plan Termination
Although it has not expressed any intention to do so, Trustcorp has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become fully vested in their accounts.
The foregoing description of the Plan provides only general information.
Participants should refer to the Plan Agreement, the Summary Plan Description,
or the Employee Handbook for a more complete description of the Plan's
provisions. Copies are available from the Trustcorp Human Resources Division.
2. Summary of Significant Accounting Policies
Investment Valuation and Income Recognition
Investments are stated at fair value. Securities traded on a national securities
exchange are valued at the last reported sales price on the last business day of
the Plan year; securities traded in the over-the-counter market and listed
securities for which no sale was reported on that date are valued at the average
of the last reported bid and ask prices. The fair value of mutual funds and the
Plan's participation in common/collective trust funds of 1st Source Bank are
stated at the aggregate current value as reported by the funds. Loans to
participants are stated at cost, which approximates fair value.
2. Summary of Significant Accounting Policies (continued)
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Use of Estimates
The financial statements of the Trustcorp Mortgage Company Employee Retirement
Savings Plan (the "Plan") are presented on the accrual basis and are prepared in
conformity with accounting principles generally accepted in the United States,
which require management to make estimates and assumptions that affect amounts
in the financial statements and accompanying notes. Actual results could differ
from those estimates.
3. Investments
During 2001 and 2000, the Plan's investments (including investments purchased,
sold, as well as held during the year) appreciated (depreciated) in value by
$32,422 and ($157,859), respectively, as follows:
Net Appreciation Net Appreciation
(Depreciation) in (Depreciation) in
Fair Value Fair Value
During 2001 During 2000
------------------- ---------------------
Common stock $ 90,083 $ (59,569)
Mutual funds (60,124) (100,940)
1st Source Bank common trust fund 2,463 2,650
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$ 32,422 $ (157,859)
=================== =====================
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
2001 2000
------------------------
1st Source Corporation common stock: $ 505,805 $ 568,743
Morgan Stanley Institutional International Equity: 423,048 522,883
1st Source Monogram Income Equity Fund: 584,926 511,455
1st Source Monogram Diversified Equity Fund: 577,196 575,852
1st Source Monogram Special Equity Fund: 591,789 291,042
1st Source Monogram Income Fund: 300,320 237,485
4. Transactions with Parties-In-Interest
Parties-in-interest are defined under Department of Labor regulations as any
fiduciary of the Plan, any party rendering service to the Plan, the employer and
certain others.
Plan assets are held in custody by the trust division of 1st Source Bank, a
wholly owned subsidiary of 1st Source Corporation, parent of Trustcorp.
Professional fees for the audit of the Plan for the year ended December 31, 2001
were paid by Trustcorp.
The Plan held the following party-in-interest investments at fair value at
December 31:
2001 2000
----------------------------
1st Source Corporation Common Stock $ 505,805 $ 568,743
1st Source Monogram Income Equity Fund: 584,926 511,455
1st Source Monogram Diversified Equity Fund: 577,196 575,852
1st Source Monogram Special Equity Fund: 591,789 291,042
1st Source Monogram Income Fund: 300,320 237,485
1st Source Bank Employee Benefit Guaranteed Income Fund 132,486 118,609
Plan transactions with parties-in-interest during the year ended December 31,
2001 were as follows:
Identity Relationship
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RSM McGladrey, Inc. Recordkeeper & Tax Accountant $ 15,280
1st Source Bank Trustee 9,028
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$ 24,308
================
5. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated July 18, 1994, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
Trustcorp Mortgage Company Employee Retirement Savings Plan
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2001
EIN: 35-1933290
Plan Number: 003
Identity of Issue,
Borrower, Lessor
or Similar Party Description of Investment Fair Value
------------------------------------------------------------------------------------------------------------
Common Stock:
* 1st Source Corporation 24,435 shares $ 505,805
Key Corp 4,982 shares 121,262
---------------
627,067
Mutual Funds:
Morgan Stanley Institutional International Equity Fund 27,258 units 423,048
* 1st Source Monogram Income Equity Fund 53,175 units 584,926
* 1st Source Monogram Diversified Equity Fund 78,530 units 577,196
* 1st Source Monogram Special Equity Fund 54,243 units 591,789
* 1st Source Monogram Income Fund 29,853 units 300,320
---------------
2,477,279
Common Trust Funds:
* 1st Source Bank Employee Benefits 5,944 units 132,486
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Guaranteed Income Fund 132,486
Loans to Participants: $183,721 principal amount, interest
rates ranging from 6.00% to
10.75%, maturities through 2009 183,721
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Total Assets Held for Investement Purposes at End of Year: $ 3,420,553
===============
* Indicates a party-in-interest to the Plan.