SOUTH BEND, Ind. (AP) — A bank with branches in Indiana and Michigan is replacing the debit cards for all its account holders after what it said was a breach of computer security.

An official for South Bend-based 1st Source Bank said it had not received any reports of suspicious activity.

“Out of an overabundance of care, we’re reissuing new debit cards to all our customers,” said James Seitz, senior vice president of consumer and electronic banking.

A security consulting firm alerted 1st Source after discovering the breach on May 12, the day it occurred. The bank shut down its computer system and contacted authorities.

“We are working with law enforcement to find these bad guys, and we didn’t want to tip them off,” Seitz said.

Last week, 1st Source mailed letters to customers asking them to monitor their accounts for suspicious activity. Seitz said the letters were not mailed sooner because of the “complex” nature of the investigation.

The bank, which has about 75 branches in northern Indiana and southwestern Michigan, said it also was monitoring ATM transactions. Bank officials also have hired a firm to review its computer security and has made some changes as a result.

The bank said it would offer a security service that normally costs $4.95 per month free for one year to customers who requested it.

“We’re certainly not holding any of our customers financially responsible for any transactions related to this breach,” Seitz said.

The new debit cards are expected to arrive next week.

Posted 6/5/2008