1st Source Corporation Reports Record Second Quarter Results, Increased Cash Dividend Declared

1st Source Corporation Reports Record Second Quarter Results, Increased Cash Dividend Declared July 23, 2026 QUARTERLY HIGHLIGHTS Net income was $47.54 million for the quarter, up $7.59 million or 18.99% from the previous quarter and up $10.23 million or 27.40% from the second quarter of 2025. Diluted net income per common share was $1.95, up $0.32 or 19.63% from the previous quarter and up $0.44 or 29.14% from the prior year's second quarter of $1.51. Return on average assets was 2.06% for the current quarter, up from 1.80% in the previous quarter and up from 1.67% in the second quarter of 2025. Return on average common shareholders' equity increased to 14.66% compared to 12.53% in the previous quarter and 12.61% in the second quarter of 2025. A cash dividend increase of two cents per share to $0.45 per common share for the quarter was approved, up seven cents or 18.42% from the cash dividend declared a year ago. Average loans and leases increased $119.93 million or 1.71% from the previous quarter and $174.23 million, or 2.50% from the second quarter of 2025. Average deposits grew $236.03 million or 3.28% from the previous quarter and $78.52 million or 1.07% from the second quarter a year ago. Average deposits, net of brokered deposits, grew $194.24 million or 2.80% from the previous quarter and $259.86 million or 3.78% from the second quarter of 2025. Tax-equivalent net interest income was $93.30 million, up $3.00 million or 3.33% from the previous quarter and up $7.95 million, or 9.32% from the second quarter a year ago. Tax-equivalent net interest margin was 4.24%, down one basis point from the previous quarter and up 23 basis points from the second quarter of 2025. Provision for credit losses of $1.54 million was recorded during the quarter compared to $7.27 million in the previous quarter and $7.69 million during the previous year's second quarter. The allowance for loan and lease losses as a percentage of total loans and leases was 2.30% at June 30, 2026, down from 2.33% at March 31, 2026 and unchanged from June 30, 2025. South Bend, Indiana--(Newsfile Corp. - July 23, 2026) - 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $47.54 million for the second quarter of 2026, up 18.99% compared to $39.96 million reported in the previous quarter and up 27.40% compared to $37.32 million in the second quarter a year ago. Diluted net income per common share for the second quarter of 2026 was $1.95, up 19.63% compared to $1.63 in the previous quarter and up 29.14% versus $1.51 in the second quarter of 2025. At its July 2026 meeting, the Board of Directors approved an increase in the cash dividend of two cents per share, raising the approved dividend for the quarter to $0.45 per common share, up seven cents or 18.42% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on August 4, 2026, and will be paid on August 14, 2026. Andrea G. Short, President and Chief Executive Officer, commented, "We are pleased to announce that 1st Source had a record second quarter. During the second quarter of 2026, average loans and leases grew $119.93 million, up 1.71% and average deposits grew $236.03 million, up 3.28%, each from the previous quarter. Credit quality improved during the quarter with fewer net charge-offs, a lower provision for credit losses, and a reduction in nonperforming assets compared to the previous quarter. We were also able to preserve our net interest margin and further improve our efficiency ratio during the quarter. The positive income statement performance during the quarter also allowed us to further strengthen our already robust balance sheet position. "During the second quarter of 2026, we were pleased to learn that 1st Source, for the eighth year in a row, was named to the annual Bank Honor Roll by Keefe, Bruyette & Woods, Inc. (KBW). We were among just 17 U.S. Banks on the list, placing our long-term performance among the top 5% of eligible banks in the United States. To be eligible, Banks must have more than $500 million in total assets and meet at least one of two criteria: consistent earnings growth over each of the past 10 years, and/or rank in the top 5% of eligible banks based on a 10-year earnings per share (EPS) compounded annual growth rate (CAGR). This recognition reinforces that our mission of Helping Clients Achieve Security, Build Wealth And Realize Their Dreams® aligns with consistent, strong financial performance for the long term. "Additionally, we learned that we once again received both Forbes' America's Best-In-State Banks and Forbes' America's Best Employers for New Grads. According to Forbes, the Best-In-State ranking is based on an independent survey of approximately 26,000 U.S. residents who evaluated their primary banking relationships across key dimensions including trust, customer service, financial advice, digital experience, and overall satisfaction. For the Best Employers for New Grads, Forbes surveyed more than 100,000 young professionals working for companies with at least 1,000 employees in the U.S., asking them to evaluate employers in areas such as salary, benefits, advancement opportunities, AI adoption, work-life balance and company image. We are proud of these awards, which highlight that our culture and values are evident to both our clients and our colleagues. "We are also excited to have recently celebrated the groundbreaking ceremony for our newest location in West Lafayette. This will be our third location in the Lafayette area and the banking center will feature our side-by-side banking model which invites the client behind the "teller line," allowing our clients and bankers to have a more transparent and inclusive experience and relationship. We are excited to watch the construction process and look forward to serving personal and business clients in this new location with our full suite of services soon." Mrs. Short concluded. SECOND QUARTER 2026 FINANCIAL RESULTS Loans and Leases Second quarter average loans and leases were $7.14 billion, which was up $119.93 million or 1.71% from the previous quarter and increased $174.23 million or 2.50% from the second quarter of 2025. Year-to-date average loans and leases increased $198.88 million, up 2.89% from the first six months of 2025. Average loan growth in the second quarter of 2026 occurred mainly within the Commercial and Agricultural, Renewable Energy, Construction Equipment, and Commercial Real Estate portfolios. Deposits Second quarter average deposits were $7.43 billion, which was up $236.03 million or 3.28%, from the previous quarter and increased $78.52 million or 1.07% compared to the second quarter a year ago. Average deposits for the first six months of 2026 were $7.31 billion, a decrease of $31.12 million or 0.42% from the same period a year ago. Average deposit balances increased from the previous quarter primarily due to higher interest-bearing demand deposits which included seasonal increases associated with municipal tax collection cycles, time deposits, and savings deposits. Average brokered deposits were $301.08 million, an increase of $41.79 million or 16.12% compared to the previous quarter and a decrease of $181.34 million or 37.59% from the prior year second quarter. Net Interest Income and Net Interest Margin Second quarter 2026 tax-equivalent net interest income increased $3.00 million to $93.30 million, up 3.33% from the previous quarter and was $7.95 million, or 9.32% higher compared to the second quarter a year ago. For the first six months of 2026, tax equivalent net interest income increased $17.16 million to $183.59 million, up 10.31% from the first half of 2025. Second quarter 2026 net interest margin was 4.23%, a decrease of one basis point from 4.24% in the previous quarter and an increase of 23 basis points from the same period in 2025. On a fully tax-equivalent basis, the second quarter 2026 net interest margin was 4.24%, down one basis point from the previous quarter and an increase of 23 basis points from the same period in 2025. The increase from the second quarter of 2025 was primarily due to higher average loan and lease balances, improved yields on investments from portfolio repositioning trades made in 2025, and lower interest-bearing deposit costs. Net interest recoveries had a positive three basis points impact during the quarter on the tax-equivalent net interest margin, compared to a positive one basis point in the previous quarter and net interest charge-offs had no impact in the prior year's second quarter. Net interest margin and net interest margin on a fully-tax equivalent basis for the first six months of 2026 were 4.24%, an increase of 29 basis points compared to 3.95% for the first six months of 2025. Net interest recoveries had a positive one basis point impact and three basis points positive impact to the current and previous year-to-date fully tax-equivalent net interest margin. Noninterest Income Second quarter 2026 noninterest income of $25.02 million increased $2.02 million or 8.77% compared to the previous quarter and was higher by $1.96 million or 8.51% compared to the second quarter a year ago. For the first six months of 2026, noninterest income increased $1.86 million or 4.03% from the first six months of 2025. The increase from the previous quarter was mainly due to higher trust and wealth advisory income from larger than usual estate administration fees primarily from one account in the process of settlement and seasonal tax preparation fees, an increase in debit card income, higher brokerage fees and commissions, higher interest rate swap fees, and increased partnership investment gains. These increases were offset by lower insurance contingent commissions and decreased mortgage banking income from lower sales volumes. The increase in noninterest income compared to the second quarter and first six months of 2025 was the result of increased trust and wealth advisory income from larger than usual estate administration fees mentioned above, realized losses of $1.00 million from repositioning of available-for-sale securities during the second quarter of 2025, increased deposit account fees, higher debit card income, and a rise in brokerage commissions and fees. These increases were offset by fewer gains on the sale of renewable energy tax equity investments, reduced equipment rental income as demand for operating leases continued to decline and decreased mortgage banking income from lower gains on loan sales due to reduced profit margins. Noninterest Expense Second quarter 2026 noninterest expense of $55.03 million increased $0.51 million or 0.93% compared to the prior quarter and rose $2.60 million or 4.95% from the second quarter a year ago. For the first six months of 2026, noninterest expense increased $4.04 million, or 3.83% from the first six months of 2025. The increase in noninterest expense compared to the second quarter and first six months of 2025 was the result of increased salaries and wages due to normal merit increases, increased incentive compensation and higher group insurance claims. Additionally, we saw increased occupancy expenses from snow removal during the first quarter and premises repairs, higher professional consulting costs, a rise in collection and repossession expense, and an increase in debit card losses. These increases were offset by lower leased equipment depreciation and an increase in gains on the sale of repossessed assets. Credit The allowance for loan and lease losses increased to $166.35 million as of June 30, 2026, or 2.30% of total loans and leases. The 2.30% decreased from 2.33% at March 31, 2026 and remained consistent with the 2.30% at June 30, 2025. Net charge-offs of $0.52 million were recorded for the second quarter of 2026, compared with net charge-offs of $3.96 million in the prior quarter and net charge-offs of $1.87 million in the same quarter a year ago. The provision for credit losses was $1.54 million for the second quarter of 2026, a decrease of $5.73 million from the previous quarter and a decrease of $6.15 million compared with the same period in 2025. The decrease in the provision expense was mainly due to a reduction in special attention loans, reduced net charge-offs and a decrease in the provision for unfunded commitments due to increased line utilization and loan fundings, offset by loan growth. The ratio of nonperforming assets to loans and leases was 1.01% as of June 30, 2026, compared to 1.03% on March 31, 2026 and 1.06% on June 30, 2025. The decrease in nonperforming assets during the quarter was primarily from lower nonaccrual loans and leases partially offset by an increase in repossessed assets. Capital As of June 30, 2026, the common equity-to-assets ratio was 14.15%, compared to 14.02% at March 31, 2026 and 13.19% a year ago. The tangible common equity-to-tangible assets ratio was 13.36% at June 30, 2026, compared to 13.22% at March 31, 2026 and 12.38% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 15.49% at June 30, 2026, compared to 15.30% at March 31, 2026 and 14.60% a year ago. There were no shares repurchased for treasury during the second quarter of 2026. Total year-to-date repurchased shares of 338,356 have reduced common shareholder's equity by $23.35 million. ABOUT 1ST SOURCE CORPORATION 1st Source common stock is traded on the NASDAQ Global Select Market under "SRCE" and appears in the National Market System tables in many daily newspapers under the code name "1st Src." Since 1863, 1st Source has been committed to the success of its clients, individuals, businesses and the communities it serves. For more information, visit www.1stsource.com. 1st Source serves the northern half of Indiana and southwest Michigan and is the largest locally controlled financial institution headquartered in the area. While delivering a comprehensive range of consumer and commercial banking services through its community bank offices, 1st Source has distinguished itself with highly personalized services. 1st Source Bank also competes for business nationally by offering specialized financing services for new and used private and cargo aircraft, automobiles for leasing and rental agencies, medium and heavy-duty trucks, and construction equipment. The Corporation includes 78 banking centers, 16 1st Source Bank Specialty Finance Group locations nationwide, nine Wealth Advisory Services locations, 13 1st Source Insurance offices, and three loan production offices. FORWARD-LOOKING STATEMENTS Except for historical information contained herein, the matters discussed in this document express "forward-looking statements." Generally, the words "believe," "contemplate," "seek," "plan," "possible," "assume," "hope," "expect," "intend," "targeted," "continue," "remain," "estimate," "anticipate," "project," "will," "should," "indicate," "would," "may" and similar expressions indicate forward-looking statements. Those statements, including statements, projections, estimates or assumptions concerning future events or performance, and other statements that are other than statements of historical fact, are subject to material risks and uncertainties. 1st Source cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. 1st Source may make other written or oral forward-looking statements from time to time. Readers are advised that various important factors could cause 1st Source's actual results or circumstances for future periods to differ materially from those anticipated or projected in such forward-looking statements. Such factors, among others, include changes in laws, regulations or accounting principles generally accepted in the United States; 1st Source's competitive position within its markets served; increasing consolidation within the banking industry; unforeseen changes in interest rates; unforeseen downturns in the local, regional or national economies or in the industries in which 1st Source has credit concentrations; and other risks discussed in 1st Source's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, which filings are available from the SEC. 1st Source undertakes no obligation to publicly update or revise any forward-looking statements. NON-GAAP FINANCIAL MEASURES The accounting and reporting policies of 1st Source conform to generally accepted accounting principles ("GAAP") in the United States and prevailing practices in the banking industry. However, certain non-GAAP performance measures are used by management to evaluate and measure the Company's performance. Although these non-GAAP financial measures are frequently used by investors to evaluate a financial institution, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. These include taxable-equivalent net interest income (including its individual components), net interest margin (including its individual components), the efficiency ratio, tangible common equity-to-tangible assets ratio and tangible book value per common share. Management believes that these measures provide users of the Company's financial information with a more meaningful view of the performance of the interest-earning assets and interest-bearing liabilities and of the Company's operating efficiency. Other financial holding companies may define or calculate these measures differently. Management reviews yields on certain asset categories and the net interest margin of the Company and its banking subsidiaries on a fully taxable-equivalent ("FTE") basis. In this non-GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis. This measure ensures comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income on a FTE basis is also used in the calculation of the Company's efficiency ratio. The efficiency ratio, which is calculated by dividing non-interest expense by total taxable-equivalent net revenue (less securities gains or losses and lease depreciation), measures how much it costs to produce one dollar of revenue. Securities gains or losses and lease depreciation are excluded from this calculation to better match revenue from daily operations to operational expenses. Management considers the tangible common equity-to-tangible assets ratio and tangible book value per common share as useful measurements of the Company's equity. See the table marked "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of certain non-GAAP financial measures used by the Company with their most closely related GAAP measures. # # # Category: Earnings (charts attached) 1st SOURCE CORPORATION 2nd QUARTER 2026 FINANCIAL HIGHLIGHTS (Unaudited - Dollars in thousands, except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2026 2026 2025 2026 2025 AVERAGE BALANCES Assets $ 9,246,107 $ 9,020,305 $ 8,962,134 $ 9,133,830 $ 8,909,499 Earning assets 8,829,703 8,618,611 8,543,938 8,724,741 8,489,665 Investments 1,529,171 1,527,070 1,476,621 1,528,126 1,497,782 Loans and leases 7,142,693 7,022,759 6,968,463 7,083,058 6,884,176 Deposits 7,427,602 7,191,569 7,349,084 7,310,237 7,341,356 Interest bearing liabilities 6,149,274 5,930,767 5,997,624 6,040,623 5,959,154 Common shareholders' equity 1,300,695 1,292,902 1,187,076 1,296,820 1,164,624 Total equity 1,343,560 1,335,986 1,246,121 1,339,794 1,227,283 INCOME STATEMENT DATA Net interest income $ 93,142 $ 90,138 $ 85,192 $ 183,280 $ 166,130 Net interest income - FTE(1) 93,296 90,293 85,345 183,589 166,430 Provision for credit losses 1,539 7,272 7,690 8,811 10,955 Noninterest income 25,019 23,001 23,057 48,020 46,160 Noninterest expense 55,025 54,517 52,430 109,542 105,506 Net income 47,542 39,961 37,326 87,503 74,849 Net income available to common shareholders 47,544 39,956 37,319 87,500 74,839 PER SHARE DATA Basic net income per common share $ 1.95 $ 1.63 $ 1.51 $ 3.58 $ 3.02 Diluted net income per common share 1.95 1.63 1.51 3.58 3.02 Common cash dividends declared 0.43 0.40 0.38 0.83 0.74 Book value per common share(2) 54.41 53.10 48.86 54.41 48.86 Tangible book value per common share(1) 50.93 49.61 45.44 50.93 45.44 Market value - High 86.64 71.98 63.90 86.64 67.77 Market value - Low 69.26 60.30 52.14 60.30 52.14 Basic weighted average common shares outstanding 24,073,382 24,276,666 24,541,385 24,174,463 24,544,120 Diluted weighted average common shares outstanding 24,073,382 24,276,666 24,541,385 24,174,463 24,544,120 KEY RATIOS Return on average assets 2.06 % 1.80 % 1.67 % 1.93 % 1.69 % Return on average common shareholders' equity 14.66 12.53 12.61 13.61 12.96 Average common shareholders' equity to average assets 14.07 14.33 13.25 14.20 13.07 End of period tangible common equity to tangible assets(1) 13.36 13.22 12.38 13.36 12.38 Risk-based capital - Common Equity Tier 1(3) 15.49 15.30 14.60 15.49 14.60 Risk-based capital - Tier 1(3) 16.70 16.54 16.04 16.70 16.04 Risk-based capital - Total(3) 17.96 17.80 17.30 17.96 17.30 Net interest margin 4.23 4.24 4.00 4.24 3.95 Net interest margin - FTE(1) 4.24 4.25 4.01 4.24 3.95 Efficiency ratio: expense to revenue 46.57 48.19 48.43 47.36 49.70 Efficiency ratio: expense to revenue - adjusted(1) 46.64 48.16 48.40 47.38 49.82 Net charge-offs to average loans and leases 0.03 0.23 0.11 0.13 0.06 Loan and lease loss allowance to loans and leases 2.30 2.33 2.30 2.30 2.30 Nonperforming assets to loans and leases 1.01 1.03 1.06 1.01 1.06 June 30, March 31, December 31, September 30, June 30, 2026 2026 2025 2025 2025 END OF PERIOD BALANCES Assets $ 9,263,173 $ 9,113,429 $ 9,055,270 $ 9,056,691 $ 9,087,162 Loans and leases 7,219,944 7,083,528 7,046,669 6,964,454 7,097,969 Deposits 7,432,245 7,227,596 7,225,575 7,409,819 7,442,669 Allowance for loan and lease losses 166,354 164,898 161,846 161,430 163,484 Goodwill and intangible assets 83,895 83,895 83,895 83,895 83,895 Common shareholders' equity 1,310,388 1,277,956 1,274,971 1,236,472 1,198,589 Total equity 1,353,180 1,320,838 1,318,090 1,291,431 1,257,424 ASSET QUALITY Loans and leases past due 90 days or more $ 996 $ 398 $ 460 $ 317 $ 198 Nonaccrual loans and leases 69,682 71,652 76,602 62,264 71,732 Other real estate 106 — — 120 — Repossessions 2,291 1,319 267 435 3,549 Equipment owned under operating leases 43 46 49 56 62 Total nonperforming assets $ 73,118 $ 73,415 $ 77,378 $ 63,192 $ 75,541 (1) See "Reconciliation of Non-GAAP Financial Measures" for more information on this performance measure/ratio. (2) Calculated as common shareholders' equity divided by common shares outstanding at the end of the period. (3) Calculated under banking regulatory guidelines. 1st SOURCE CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited - Dollars in thousands) June 30, March 31, December 31, June 30, 2026 2026 2025 2025 ASSETS Cash and due from banks $ 67,497 $ 67,670 $ 69,249 $ 88,810 Federal funds sold and interest bearing deposits with other banks 59,806 51,136 50,608 60,298 Investment securities available-for-sale, at fair value (amortized cost of $1,588,489, $1,583,272, $1,568,429, and $1,530,847 at June 30, 2026, March 31, 2026, December 31, 2025, and June 30, 2025, respectively) 1,527,689 1,529,593 1,522,486 1,456,157 Other investments 22,140 22,140 22,140 22,140 Mortgages held for sale 4,990 3,142 4,866 4,334 Loans and leases, net of unearned discount: Commercial and agricultural 857,330 821,818 797,592 835,826 Renewable energy 741,164 713,110 652,799 573,226 Auto and light truck 828,721 831,365 887,876 972,461 Medium and heavy duty truck 266,719 264,165 269,749 282,875 Aircraft 1,067,328 1,073,282 1,086,821 1,134,838 Construction equipment 1,275,465 1,210,493 1,221,135 1,207,209 Commercial real estate 1,313,213 1,319,361 1,269,765 1,252,750 Residential real estate and home equity 760,656 735,743 740,777 714,026 Consumer 109,348 114,191 120,155 124,758 Total loans and leases 7,219,944 7,083,528 7,046,669 7,097,969 Allowance for loan and lease losses (166,354 ) (164,898 ) (161,846 ) (163,484) Net loans and leases 7,053,590 6,918,630 6,884,823 6,934,485 Equipment owned under operating leases, net 5,618 6,603 6,964 8,653 Premises and equipment, net 57,880 57,973 58,318 55,602 Goodwill and intangible assets 83,895 83,895 83,895 83,895 Accrued income and other assets 380,068 372,647 351,921 372,788 Total assets $ 9,263,173 $ 9,113,429 $ 9,055,270 $ 9,087,162 LIABILITIES Deposits: Noninterest-bearing demand $ 1,606,287 $ 1,655,736 $ 1,600,495 $ 1,583,621 Interest-bearing deposits: Interest-bearing demand 2,669,991 2,487,201 2,592,202 2,601,353 Savings 1,495,425 1,466,564 1,446,278 1,359,841 Time 1,660,542 1,618,095 1,586,600 1,897,854 Total interest-bearing deposits 5,825,958 5,571,860 5,625,080 5,859,048 Total deposits 7,432,245 7,227,596 7,225,575 7,442,669 Short-term borrowings: Federal funds purchased and securities sold under agreements to repurchase 63,494 153,391 112,470 58,242 Other short-term borrowings 135,996 135,789 126,151 51,816 Total short-term borrowings 199,490 289,180 238,621 110,058 Long-term debt and mandatorily redeemable securities 36,026 35,508 43,330 41,850 Subordinated notes 58,764 58,764 58,764 58,764 Accrued expenses and other liabilities 183,468 181,543 170,890 176,397 Total liabilities 7,909,993 7,792,591 7,737,180 7,829,738 SHAREHOLDERS' EQUITY Preferred stock; no par value Authorized 10,000,000 shares; none issued or outstanding — — —- — Common stock; no par value Authorized 40,000,000 shares; issued 28,205,674 shares at June 30, 2026, March 31, 2026, December 31, 2025, and June 30, 2025 436,538 436,538 436,538 436,538 Retained earnings 1,084,880 1,047,027 1,015,160 950,363 Cost of common stock in treasury (4,123,848, 4,136,793, 3,836,656, and 3,674,878 shares at June 30, 2026, March 31, 2026, December 31, 2025, and June 30, 2025, respectively) (164,514 ) (164,709 ) (141,950 ) (131,551) Accumulated other comprehensive loss (46,516 ) (40,900 ) (34,777 ) (56,761) Total shareholders' equity 1,310,388 1,277,956 1,274,971 1,198,589 Noncontrolling interests 42,792 42,882 43,119 58,835 Total equity 1,353,180 1,320,838 1,318,090 1,257,424 Total liabilities and equity $ 9,263,173 $ 9,113,429 $ 9,055,270 $ 9,087,162 1st SOURCE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited - Dollars in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2026 2026 2025 2026 2025 Interest income: Loans and leases $ 116,814 $ 113,423 $ 117,230 $ 230,237 $ 230,790 Investment securities, taxable 12,402 11,704 8,602 24,106 16,755 Investment securities, tax-exempt 304 307 297 611 574 Other 1,561 699 1,087 2,260 2,401 Total interest income 131,081 126,133 127,216 257,214 250,520 Interest expense: Deposits 34,465 32,578 39,106 67,043 78,952 Short-term borrowings 1,507 1,720 809 3,227 1,041 Subordinated notes 971 995 1,007 1,966 2,021 Long-term debt and mandatorily redeemable securities 996 702 1,102 1,698 2,376 Total interest expense 37,939 35,995 42,024 73,934 84,390 Net interest income 93,142 90,138 85,192 183,280 166,130 Provision for credit losses: Provision for credit losses - loans and leases 1,978 7,010 7,884 8,988 9,996 (Recovery of) provision for credit losses - unfunded loan commitments (439 ) 262 (194 ) (177 ) 959 Total provision for credit losses 1,539 7,272 7,690 8,811 10,955 Net interest income after provision for credit losses 91,603 82,866 77,502 174,469 155,175 Noninterest income: Trust and wealth advisory 8,692 7,018 7,266 15,710 13,932 Service charges on deposit accounts 3,432 3,354 3,189 6,786 6,260 Debit card 4,734 4,380 4,567 9,114 8,716 Mortgage banking 858 1,011 1,116 1,869 1,969 Insurance commissions 1,791 2,511 1,685 4,302 4,125 Equipment rental 540 589 779 1,129 1,678 Gains (losses) on investment securities available-for-sale 13 — (997 ) 13 (997) Other 4,959 4,138 5,452 9,097 10,477 Total noninterest income 25,019 23,001 23,057 48,020 46,160 Noninterest expense: Salaries and employee benefits 33,152 32,821 31,800 65,973 63,915 Net occupancy 3,387 3,548 3,035 6,935 6,259 Furniture and equipment 1,665 1,462 1,684 3,127 3,031 Data processing 7,492 7,573 7,410 15,065 14,701 Depreciation - leased equipment 423 454 619 877 1,337 Professional fees 2,152 1,575 1,499 3,727 3,167 FDIC and other insurance 1,454 1,449 1,438 2,903 2,878 Business development and marketing 2,064 1,903 1,884 3,967 3,809 Other 3,236 3,732 3,061 6,968 6,409 Total noninterest expense 55,025 54,517 52,430 109,542 105,506 Income before income taxes 61,597 51,350 48,129 112,947 95,829 Income tax expense 14,055 11,389 10,803 25,444 20,980 Net income 47,542 39,961 37,326 87,503 74,849 Net loss (income) attributable to noncontrolling interests 2 (5 ) (7 ) (3 ) (10) Net income available to common shareholders $ 47,544 $ 39,956 $ 37,319 $ 87,500 $ 74,839 Per common share: Basic net income per common share $ 1.95 $ 1.63 $ 1.51 $ 3.58 $ 3.02 Diluted net income per common share $ 1.95 $ 1.63 $ 1.51 $ 3.58 $ 3.02 Basic weighted average common shares outstanding 24,073,382 24,276,666 24,541,385 24,174,463 24,544,120 Diluted weighted average common shares outstanding 24,073,382 24,276,666 24,541,385 24,174,463 24,544,120 1st SOURCE CORPORATION DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY INTEREST RATES AND INTEREST DIFFERENTIAL (Unaudited - Dollars in thousands) Three Months Ended June 30, 2026 March 31, 2026 June 30, 2025 Average Balance Interest Income/Expense Yield/ Rate Average Balance Interest Income/Expense Yield/ Rate Average Balance Interest Income/Expense Yield/ Rate ASSETS Investment securities available-for-sale: Taxable $ 1,496,209 $ 12,402 3.32 % $ 1,493,065 $ 11,704 3.18 % $ 1,444,203 $ 8,602 2.39 % Tax exempt(1) 32,962 384 4.67 % 34,005 387 4.62 % 32,418 375 4.64 % Mortgages held for sale 4,116 63 6.14 % 4,930 75 6.17 % 3,385 55 6.52 % Loans and leases, net of unearned discount(1) 7,142,693 116,825 6.56 % 7,022,759 113,423 6.55 % 6,968,463 117,250 6.75 % Other investments 153,723 1,561 4.07 % 63,852 699 4.44 % 95,469 1,087 4.57 % Total earning assets(1) 8,829,703 131,235 5.96 % 8,618,611 126,288 5.94 % 8,543,938 127,369 5.98 % Cash and due from banks 59,208 57,339 67,535 Allowance for loan and lease losses (166,429 ) (163,666 ) (159,418 ) Other assets 523,625 508,021 510,079 Total assets $ 9,246,107 $ 9,020,305 $ 8,962,134 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing deposits $ 5,848,085 $ 34,465 2.36 % $ 5,605,444 $ 32,578 2.36 % $ 5,774,752 $ 39,106 2.72 % Short-term borrowings: Securities sold under agreements to repurchase 64,030 137 0.86 % 53,514 91 0.69 % 60,863 121 0.80 % Other short-term borrowings 142,875 1,370 3.85 % 173,524 1,629 3.81 % 61,917 688 4.46 % Subordinated notes 58,764 971 6.63 % 58,764 995 6.87 % 58,764 1,007 6.87 % Long-term debt and mandatorily redeemable securities 35,520 996 11.25 % 39,521 702 7.20 % 41,328 1,102 10.70 % Total interest-bearing liabilities 6,149,274 37,939 2.47 % 5,930,767 35,995 2.46 % 5,997,624 42,024 2.81 % Noninterest-bearing deposits 1,579,517 1,586,125 1,574,332 Other liabilities 173,756 167,427 144,057 Shareholders' equity 1,300,695 1,292,902 1,187,076 Noncontrolling interests 42,865 43,084 59,045 Total liabilities and equity $ 9,246,107 $ 9,020,305 $ 8,962,134 Less: Fully tax-equivalent adjustments (154 ) (155 ) (153 ) Net interest income/margin (GAAP-derived)(1) $ 93,142 4.23 % $ 90,138 4.24 % $ 85,192 4.00 % Fully tax-equivalent adjustments 154 155 153 Net interest income/margin - FTE(1) $ 93,296 4.24 % $ 90,293 4.25 % $ 85,345 4.01 % (1) See "Reconciliation of Non-GAAP Financial Measures" for more information on this performance measure/ratio. 1st SOURCE CORPORATION DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY INTEREST RATES AND INTEREST DIFFERENTIAL (Unaudited - Dollars in thousands) Six Months Ended June 30, 2026 June 30, 2025 Average Balance Interest Income/Expense Yield/ Rate Average Balance Interest Income/Expense Yield/ Rate ASSETS Investment securities available-for-sale: Taxable $ 1,494,645 $ 24,106 3.25 % $ 1,465,984 $ 16,755 2.30 % Tax exempt(1) 33,481 771 4.64 % 31,798 724 4.59 % Mortgages held for sale 4,521 138 6.16 % 2,899 94 6.54 % Loans and leases, net of unearned discount(1) 7,083,058 230,248 6.56 % 6,884,176 230,846 6.76 % Other investments 109,036 2,260 4.18 % 104,808 2,401 4.62 % Total earning assets(1) 8,724,741 257,523 5.95 % 8,489,665 250,820 5.96 % Cash and due from banks 58,279 65,782 Allowance for loan and lease losses (165,055 ) (158,374 ) Other assets 515,865 512,426 Total assets $ 9,133,830 $ 8,909,499 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing deposits 5,727,434 67,043 2.36 % 5,760,025 78,952 2.76 % Short-term borrowings: Securities sold under agreements to repurchase 58,801 228 0.78 % 59,555 225 0.76 % Other short-term borrowings 158,115 2,999 3.82 % 40,304 816 4.08 % Subordinated notes 58,764 1,966 6.75 % 58,764 2,021 6.94 % Long-term debt and mandatorily redeemable securities 37,509 1,698 9.13 % 40,506 2,376 11.83 % Total interest-bearing liabilities 6,040,623 73,934 2.47 % 5,959,154 84,390 2.86 % Noninterest-bearing deposits 1,582,803 1,581,331 Other liabilities 170,610 141,731 Shareholders' equity 1,296,820 1,164,624 Noncontrolling interests 42,974 62,659 Total liabilities and equity $ 9,133,830 $ 8,909,499 Less: Fully tax-equivalent adjustments (309 ) (300 ) Net interest income/margin (GAAP-derived)(1) $ 183,280 4.24 % $ 166,130 3.95 % Fully tax-equivalent adjustments 309 300 Net interest income/margin - FTE(1) $ 183,589 4.24 % $ 166,430 3.95 % (1) See "Reconciliation of Non-GAAP Financial Measures" for more information on this performance measure/ratio. 1st SOURCE CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited - Dollars in thousands, except per share data) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2026 2026 2025 2026 2025 Calculation of Net Interest Margin (A) Interest income (GAAP) $ 131,081 $ 126,133 $ 127,216 $ 257,214 $ 250,520 Fully tax-equivalent adjustments: (B) - Loans and leases 74 75 75 149 150 (C) - Tax exempt investment securities 80 80 78 160 150 (D) Interest income - FTE (A+B+C) 131,235 126,288 127,369 257,523 250,820 (E) Interest expense (GAAP) 37,939 35,995 42,024 73,934 84,390 (F) Net interest income (GAAP) (A-E) 93,142 90,138 85,192 183,280 166,130 (G) Net interest income - FTE (D-E) 93,296 90,293 85,345 183,589 166,430 (H) Annualization factor 4.011 4.056 4.011 2.017 2.017 (I) Total earning assets $ 8,829,703 $ 8,618,611 $ 8,543,938 $ 8,724,741 $ 8,489,665 Net interest margin (GAAP-derived) (F*H)/I 4.23 % 4.24 % 4.00 % 4.24 % 3.95 % Net interest margin - FTE (G*H)/I 4.24 % 4.25 % 4.01 % 4.24 % 3.95 % Calculation of Efficiency Ratio (F) Net interest income (GAAP) $ 93,142 $ 90,138 $ 85,192 $ 183,280 $ 166,130 (G) Net interest income - FTE 93,296 90,293 85,345 183,589 166,430 (J) Plus: noninterest income (GAAP) 25,019 23,001 23,057 48,020 46,160 (K) Less: gains/losses on investment securities and partnership investments (822) (586 ) (739 ) (1,408 ) (2,166 ) (L) Less: depreciation - leased equipment (423) (454 ) (619 ) (877 ) (1,337 ) (M) Total net revenue (GAAP) (F+J) 118,161 113,139 108,249 231,300 212,290 (N) Total net revenue - adjusted (G+J-K-L) 117,070 112,254 107,044 229,324 209,087 (O) Noninterest expense (GAAP) 55,025 54,517 52,430 109,542 105,506 (L) Less:depreciation - leased equipment (423) (454 ) (619 ) (877 ) (1,337 ) (P) Noninterest expense - adjusted (O-L) 54,602 54,063 51,811 108,665 104,169 Efficiency ratio (GAAP-derived) (O/M) 46.57 % 48.19 % 48.43 % 47.36 % 49.70 % Efficiency ratio - adjusted (P/N) 46.64 % 48.16 % 48.40 % 47.38 % 49.82 % End of Period June 30, March 31, June 30, 2026 2026 2025 Calculation of Tangible Common Equity-to-Tangible Assets Ratio (Q) Total common shareholders' equity (GAAP) $ 1,310,388 $ 1,277,956 $ 1,198,589 (R) Less: goodwill and intangible assets (83,895) (83,895 ) (83,895 ) (S) Total tangible common shareholders' equity (Q-R) $ 1,226,493 $ 1,194,061 $ 1,114,694 (T) Total assets (GAAP) 9,263,173 9,113,429 9,087,162 (R) Less: goodwill and intangible assets (83,895) (83,895 ) (83,895 ) (U) Total tangible assets (T-R) $ 9,179,278 $ 9,029,534 $ 9,003,267 Common equity-to-assets ratio (GAAP-derived) (Q/T) 14.15 % 14.02 % 13.19 % Tangible common equity-to-tangible assets ratio (S/U) 13.36 % 13.22 % 12.38 % Calculation of Tangible Book Value per Common Share (Q) Total common shareholders' equity (GAAP) $ 1,310,388 $ 1,277,956 $ 1,198,589 (V) Actual common shares outstanding 24,081,826 24,068,881 24,530,796 Book value per common share (GAAP-derived) (Q/V)*1000 $ 54.41 $ 53.10 $ 48.86 Tangible common book value per share (S/V)*1000 $ 50.93 $ 49.61 $ 45.44 The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP #336901 10 3) To view the source version of this press release, please visit https://www.newsfilecorp.com/release/306243 SOURCE 1st Source Corporation