1st Source Corporation (NASDAQ: SRCE) reported first‑quarter 2026 results, posting net income of $39.96 million, a 6.49 % increase from $37.52 million in the same quarter a year earlier. Diluted earnings per share rose to $1.63, matching the consensus estimate and up 7.24 % from $1.52 a year ago.
Total revenue reached $113.14 million, beating the consensus estimate of $111.88 million and up 1.3 % year‑over‑year. The lift was driven by growth in the specialty‑finance and deposit franchise, with average loans and leases expanding 3.29 % to $7.02 billion, led by renewable‑energy, commercial‑and‑agricultural, and commercial‑real‑estate portfolios.
Net interest margin expanded to 4.25 % from 3.90 % in Q1 2025, driven by higher average loan balances, improved investment yields from portfolio repositioning in 2025, and lower interest‑bearing deposit costs. The margin increase offset a 4‑basis‑point sequential decline, reflecting tighter deposit competition.
Credit‑loss provisions rose to $7.27 million, with net charge‑offs of $3.96 million, largely tied to two auto‑and‑light‑truck accounts servicing the film industry. The higher provision reflects a modest deterioration in credit quality in those niche segments, but overall loan quality remained strong.
Management highlighted the company’s “record first quarter” and emphasized continued focus on safety and soundness amid economic uncertainty. CEO Andrea G. Short noted that average loans and leases grew $69.67 million, up 1.00 % from the prior quarter, and that the balance sheet remained solid.
The company increased its quarterly cash dividend by three cents to $0.43 per share, a 13.16 % rise from the $0.40 dividend declared a year ago. The dividend will be payable to shareholders of record on May 5 and paid on May 15.
1st Source’s inclusion in Forbes’ “America’s Best Banks” list for the third consecutive year and its receipt of the Community Bank Gold Level Award for SBA loans in Indiana underscore the bank’s strong market position and commitment to community lending.
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