1st Source Corporation Reports Increased Net Income of $39.96 Million in Q1 2026

1st Source Corporation reported its financial results for the first quarter of 2026, revealing a net income of $39.96 million, an increase from $37.52 million in the same period last year. This translates to a diluted earnings per share of $1.63, up from $1.52 in the prior year. The company's return on average common shareholders' equity was 12.53%, slightly down from 13.33% in the previous year, while the return on total average assets improved to 1.80% from 1.72%. The increase in net income was primarily driven by a rise in net interest income, which reached $90.14 million, compared to $80.94 million in the first quarter of 2025.

Total assets for 1st Source Corporation increased to $9.11 billion as of March 31, 2026, reflecting a growth of $58.16 million or 0.64% from the end of 2025. The growth in total loans and leases was modest, rising to $7.08 billion, an increase of $36.86 million or 0.52%. Notably, the renewable energy, commercial real estate, and commercial and agricultural loan portfolios contributed to this growth, while the auto and light truck, aircraft, and construction equipment portfolios saw declines. The company’s total deposits remained stable at $7.23 billion, with a slight increase in noninterest-bearing demand deposits and savings deposits, offset by a decrease in interest-bearing demand deposits.

In terms of operational metrics, 1st Source Corporation's allowance for loan and lease losses increased to $164.90 million, representing 2.33% of total loans and leases. The provision for credit losses for the quarter was $7.27 million, significantly higher than the $3.27 million recorded in the same quarter last year. This increase was attributed to changes in forward-looking economic assumptions and modest loan growth, reflecting heightened geopolitical uncertainty and economic volatility. Nonperforming assets totaled $73.42 million, a decrease from $77.38 million at the end of 2025, but an increase from $43.07 million a year earlier.

The company also reported strategic developments, including a $23.35 million repurchase of common stock and a dividend payment of $9.79 million during the quarter. The accumulated other comprehensive loss increased to $40.90 million, primarily due to market conditions affecting the available-for-sale investment portfolio. Looking ahead, 1st Source Corporation remains cautious about the economic environment, particularly regarding geopolitical tensions and their potential impact on its loan portfolios. The company continues to monitor these risks closely while maintaining a strong capital position, with a total shareholders' equity of $1.28 billion as of March 31, 2026.