1st Source (SRCE) investor relations material

Executive summary

• Net income for Q1 2026 was $39.96 million, up from $37.52 million in Q1 2025, with diluted EPS rising to $1.63 from $1.52 year-over-year.

• Total assets reached $9.11 billion as of March 31, 2026, reflecting growth in loans, leases, and investment securities.

• Board approved a cash dividend increase to $0.43 per share, up 13.16% year-over-year, marking 38 consecutive years of dividend growth.

• Recognized for national and state-level awards, including Forbes' America's Best Banks and SBA lending honors.

Financial highlights

• Net interest income for Q1 2026 was $90.29 million, up from $80.94 million in Q1 2025.

• Net interest margin (FTE) increased to 4.25% from 3.90% year-over-year.

• Noninterest income was $23.00 million, nearly flat year-over-year, with trust and wealth advisory services comprising 31% of the mix.

• Efficiency ratio improved to 48.16% in Q1 2026 from 51.31% in Q1 2025.

• Provision for credit losses rose to $7.27 million from $3.27 million year-over-year.

Outlook and guidance

• Management highlights stable credit quality, strong reserves, and a robust capital and liquidity position, while noting heightened geopolitical uncertainty, volatile energy prices, and persistent inflation as key risks.

• The forecast assumes downside risks will persist over a two-year horizon, with inflation returning to the Fed’s 2% target more slowly than previously anticipated.