1st Source Corporation Reports Strong Q3 and Year-to-Date Financial Performance for 2026

1st Source Corporation reported a solid financial performance for the third quarter and the first nine months of 2026, with net income available to common shareholders reaching $49.54 million for the quarter and $137.04 million year-to-date, compared to $42.30 million and $117.14 million for the same periods in 2025. The diluted earnings per share increased to $2.03 for the third quarter and $5.62 for the nine months, up from $1.71 and $4.74, respectively. The return on average common shareholders’ equity improved to 14.01% for the nine months ended September 30, 2026, compared to 13.24% in the prior year.

Total assets increased by $287.09 million, or 3.17%, to $9.34 billion as of September 30, 2026, driven primarily by a $294.42 million, or 4.18%, rise in total loans and leases, which reached $7.34 billion. Significant growth was noted in the renewable energy, construction equipment, commercial and agricultural, commercial real estate, medium and heavy-duty truck, residential real estate and home equity, and aircraft portfolios. However, there were declines in the auto and light truck and consumer portfolios. Total deposits also rose by $243.64 million, or 3.37%, to $7.47 billion, reflecting increases in time deposits, brokered deposits, savings deposits, and noninterest-bearing demand deposits.

The company’s noninterest income for the third quarter was $24.70 million, a 12.74% increase from $21.91 million in the same quarter of 2025. This growth was attributed to higher trust and wealth advisory fees, service charges on deposit accounts, and debit card income. However, mortgage banking income decreased due to lower secondary loan servicing volumes and reduced profit margins. Noninterest expenses rose slightly to $55.22 million for the third quarter, reflecting increases in salaries and employee benefits, net occupancy, and professional fees, partially offset by decreases in data processing and depreciation expenses.

1st Source Corporation's allowance for loan and lease losses stood at $167.16 million, representing 2.28% of total loans and leases, a slight decrease from 2.32% a year earlier. The provision for credit losses for the third quarter was $0.90 million, consistent with the prior year, while net charge-offs were $0.33 million, down from $1.88 million in the same quarter of 2025. The company noted that nonperforming assets decreased to $59.44 million, a 23.18% decline from December 31, 2025, primarily due to lower nonaccrual loans and leases.

Looking ahead, 1st Source Corporation remains cautious amid ongoing economic uncertainties, including geopolitical tensions and inflationary pressures. The company continues to monitor its loan portfolios closely, particularly in sectors facing potential stress, such as agriculture and consumer finance. Despite these challenges, management believes the current funding sources provide adequate liquidity to meet cash flow needs and maintain a strong capital position, with a shareholders’ equity-to-assets ratio of 14.13% as of September 30, 2026.