1st Source Corporation Reports Record Annual Earnings, Cash Dividend Declared, History of Increased Dividends Continues

1st Source Corporation Reports Record Annual Earnings, Cash Dividend Declared, History of Increased Dividends Continues January 22, 2026 FULL YEAR AND QUARTERLY HIGHLIGHTS Net income was a record $158.28 million for the year of 2025, up 19.34% from 2024 and was $41.14 million for the fourth quarter of 2025, down 2.73% from the previous quarter and up 30.87% from the fourth quarter of 2024. Diluted net income per common share was $6.41 for the year of 2025, up 19.59% from 2024 and was $1.67 for the fourth quarter of 2025, down 2.34% from the previous quarter and up 31.50% from the prior year's fourth quarter. These results include $5.81 million and $8.68 million in pre-tax losses during the fourth quarter and full year, respectively, from repositioning of available-for-sale securities. Return on average assets increased to 1.76% and return on average common shareholders' equity increased to 13.16% for the full year 2025 from 1.52% and 12.54%, respectively, in 2024. For the fourth quarter of 2025, return on average assets increased to 1.80% and return on average common shareholders' equity increased to 12.94% from 1.42% and 11.21%, respectively, in the fourth quarter of 2024. Cash dividend of $0.40 per common share was approved, up 11.11% from the cash dividend declared a year ago. Average loans and leases grew $336.29 million, up 5.10% during 2025 to $6.93 billion from $6.60 billion in 2024. Average deposits increased $263.33 million, up 3.70% to $7.38 billion during 2025 from $7.12 billion in 2024. Average deposits, net of brokered deposits, increased $338.84 million, up 5.18% to $6.88 billion during 2025 from $6.54 billion in 2024. Tax-equivalent net interest margin was 4.07% for 2025, up 43 basis points from 2024 and was 4.29% for the fourth quarter of 2025, up 20 basis points from the prior quarter and up 51 basis points from the fourth quarter of 2024. Net interest recoveries had a positive 14 basis point impact on the fourth quarter 2025 tax-equivalent net interest margin compared to a positive three basis point impact during the previous quarter and the fourth quarter of 2024. South Bend, Indiana--(Newsfile Corp. - January 22, 2026) - 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record net income of $158.28 million for 2025, an increase of 19.34% compared to $132.62 million earned in 2024. Fourth quarter net income was $41.14 million, an increase of 30.87% compared to $31.44 million earned in the fourth quarter of 2024. Diluted net income per common share for the year was a record $6.41, up 19.59% from the $5.36 earned a year earlier. Diluted net income per common share for the fourth quarter was $1.67, up 31.50% from the $1.27 earned in the fourth quarter of the previous year. Return on average assets increased to 1.76% and return on average common shareholders' equity increased to 13.16% for the full year 2025 from 1.52% and 12.54%, respectively, in 2024. For the fourth quarter of 2025, return on average assets increased to 1.80% and return on average common shareholders' equity increased to 12.94% from 1.42% and 11.21%, respectively, in the fourth quarter of 2024. The increase in both ratios was mainly due to a larger percentage increase in net income compared to the percent increase in average assets and average common shareholders' equity for both periods presented. At its January 2026 meeting, the Board of Directors approved a cash dividend of $0.40 per common share, up 11.11% from the $0.36 per common share declared a year ago. The cash dividend is payable to shareholders of record on February 3, 2026, and will be paid on February 13, 2026. Andrea G. Short, President and Chief Executive Officer, commented, "We are pleased to announce record net income for the fifth year in a row and we reached our 38th consecutive year of dividend growth. We were able to grow average loans and leases by $336.29 million or 5.10% and average deposits, net of brokered deposits, increased by $338.84 million or 5.18% from 2024. Higher rates on investment securities, relatively stable rates on loans and leases, and lower deposit and short-term borrowing rates resulted in tax-equivalent net interest margin expansion during 2025 to 4.07% from 3.64% in 2024. During the fourth quarter, we also experienced margin expansion of 20 basis points. Net interest recoveries had a positive 14 basis point impact on the fourth quarter 2025 tax-equivalent net interest margin compared to a positive three basis point impact during the previous quarter. We had net charge-offs to average loans and leases of 0.06% in 2025 compared to 0.09% in 2024. These positive income statement results were supported by a strong balance sheet. During the year, we maintained strong liquidity and upheld our historically conservative capital structure. I am extremely proud that my colleagues were able to achieve such positive results despite the unique challenges of the last several years. "We were also delighted to learn that Chris Murphy, our Executive Chairman was honored with a 2025 Leaders in Banking Excellence Award by the Indiana Bankers Association. These awards showcase exceptional individuals who have positively impacted Indiana banks and the communities they serve. Chris' contributions over the past 50-plus years have helped shape the Indiana banking community. He is a passionate advocate for our clients, our communities, and community banks and is a true example of what it means to be a servant leader. "Finally, in the fourth quarter, we rolled out a new platform called Online & Mobile Banking for Business. This new suite of services allows small business owners a fast, reliable, and convenient way to manage their business accounts online. It gives them new tools to help them simplify payments, create team account access for their employees, and manage their cashflow more quickly and easily with no manual data entry. This new platform is one more way we are showing our commitment to supporting small businesses in the communities where we live and serve." Ms. Short concluded. Christopher J. Murphy III, Executive Chairman, added, "During the fourth quarter of 2025, we were very pleased to learn that we are in rare company to be named among Piper Sandler's Sm-All Stars for the third year in a row. The list identifies the top performing small-cap banks and thrifts in the country. To earn this prestigious status, companies need to have a market cap below $2.5 billion and meet a range of criteria related to growth, profitability, credit quality, and capital strength. Additionally, we were pleased to learn that 1st Source once again received a "Superior" Bauer 5-Star Rating, the highest rating by BauerFinancial. The ratings are based on several factors including capital ratio, profitability/loss trend, evaluation of the level of delinquent loans, repossessed assets, the market versus book value of the investment portfolio, the community reinvestment rating (CRA), liquidity and more." Mr. Murphy concluded. FULL YEAR AND FOURTH QUARTER 2025 FINANCIAL RESULTS Loans Annual average loans and leases of $6.93 billion increased $336.29 million, up 5.10% from the full year 2024. Quarterly average loans and leases of $6.95 billion increased $276.67 million, up 4.14% in the fourth quarter of 2025 from the year ago quarter and have decreased $62.30 million, down 0.89% from the third quarter of this year. Strong growth primarily within our Renewable Energy, Commercial Real Estate, Construction Equipment and Residential Real Estate and Home Equity portfolios drove total average loans and leases higher during the year offset by a reduction in the Auto and Light Truck portfolio mainly due to auto rental clients downsizing their fleets during the year. Deposits Annual average deposits for 2025 were $7.38 billion, an increase of $263.33 million, up 3.70% from 2024. Quarterly average deposits of $7.42 billion grew $274.86 million, up 3.85% compared to the same quarter last year and were relatively flat compared to the third quarter of this year. Growth over the last year came from non-brokered time deposits, money market accounts, and interest-bearing demand deposits offset by a decrease in more expensive brokered deposits. Average brokered deposits decreased $75.50 million or 13.00% during the full year and decreased $162.09 million or 29.77% during the fourth quarter. At December 31, 2025, the composition of our deposit portfolio continued to reflect a well-balanced, high quality mix across our deposit categories. Core deposits represented 91.07% of total deposits and noninterest-bearing demand deposits represented 22.15% of total deposits at year-end 2025. Net Interest Income and Net Interest Margin For full year 2025, tax-equivalent net interest income was $348.79 million, an increase of $47.38 million, up 15.72% compared to the full year 2024. Fourth quarter 2025 tax-equivalent net interest income of $93.45 million increased $13.94 million, up 17.53% from the fourth quarter a year ago and increased $4.55 million, up 5.12% from the third quarter. Net interest margin for the year ending December 31, 2025 was 4.07%, an increase of 44 basis points from the 3.63% for the year ending December 31, 2024. Net interest margin on a tax-equivalent basis for the year ending December 31, 2025 was 4.07%, an increase of 43 basis points from the 3.64% for the year ending December 31, 2024. Net interest recoveries positively contributed six basis points to the 2025 tax-equivalent net interest margin compared to a positive three basis point impact during 2024. Fourth quarter 2025 net interest margin was 4.28%, an increase of 51 basis points from the 3.77% for the same period in 2024 and an increase of 20 basis points from the prior quarter. Fourth quarter 2025 net interest margin on a fully tax-equivalent basis was also 4.29%, an increase of 51 basis points from the 3.78% for the same period in 2024 and an increase of 20 basis points from the 4.09% in the prior quarter. Net interest recoveries had a positive 14 basis point impact on the fourth quarter 2025 tax-equivalent net interest margin compared to a positive three basis point impact during the fourth quarter of 2024. Noninterest Income Noninterest income for the twelve months ended December 31, 2025 was $85.60 million, down $0.70 million or 0.82% compared to the twelve months ended December 31, 2024. Fourth quarter 2025 noninterest income of $17.54 million decreased $0.95 million, or 5.11% from the fourth quarter a year ago and decreased $4.37 million or 19.94% from the third quarter. Noninterest income during the twelve months ended December 31, 2025 was lower compared to a year ago mainly from realized losses of $8.68 million from repositioning available-for-sale investment securities compared to realized losses of $3.90 million during 2024. The securities sold during 2025 had a weighted average yield of 0.92% and were replaced with securities having a weighted average yield of 3.66%. The cumulative breakeven on these transactions is estimated to be approximately 1.5 years. Additionally, noninterest income decreased from lower equipment rental income due to a decrease in the equipment rental portfolio as demand for operating leases continues to decline. These decreases were offset by higher partnership investment gains related to the sale of renewable energy tax equity investments, increased trust and wealth advisory income primarily from increased assets under management during the year, a rise in insurance commissions including contingent commissions, and growth in interest rate swap fees. The decrease in noninterest income from the previous quarter was mainly due to higher losses from repositioning available-for-sale securities. The securities sold during the quarter had a weighted average yield of 0.91% and were replaced with securities having a weighted average yield of 3.64%. The breakeven on this transaction is estimated to be approximately 1.7 years. Additionally, we had a write-down of $0.77 million on a small business capital investment during the fourth quarter. These decreases were offset by increased trust and wealth advisory income primarily from estate fees and positive market performance during the quarter. Noninterest Expense Noninterest expense for the twelve months ended December 31, 2025 was $216.84 million, an increase of $13.24 million, or 6.50% compared to the same period a year ago. Fourth quarter 2025 noninterest expense of $56.56 million increased $2.35 million, or 4.33% from the fourth quarter a year ago and increased $1.78 million or 3.25% from the prior quarter. The increase in noninterest expense for 2025 from 2024 was primarily due to higher salaries and benefits which included higher base salaries as a result of normal merit increases, a rise in incentive compensation and group insurance claims, as well as higher company contributions to employee retirement accounts due to the utilization of accumulated plan forfeitures of $0.65 million during 2024. Also contributing to higher noninterest expense was increased data processing costs related to technology projects and $1.10 million in charitable contributions. These increases were offset by lower leased equipment depreciation and decreased insurance premiums. The increase in noninterest expense from the previous quarter was mainly due to higher salaries and wages from normal merit increases and increased incentive compensation, as well as higher group insurance claims, and increased professional fees. These increases were offset by fewer charitable contributions and lower debit card loss activity. Credit The allowance for loan and lease losses as of December 31, 2025 was 2.30% of total loans and leases compared to 2.32% at September 30, 2025, and 2.27% at December 31, 2024. Net charge-offs for the full year of 2025 were $4.21 million compared to net charge-offs of $5.68 million in 2024. This resulted in net charge-offs to average loans and leases of 0.06% for 2025 compared to net charge-offs of 0.09% for 2024. Net charge-offs in the fourth quarter of 2025 were $0.28 million compared with net charge-offs of $0.69 million in the same quarter a year ago and $1.88 million of net charge-offs in the previous quarter. The provision for credit losses was $12.56 million for the twelve months ended December 31, 2025, and included $0.71 million for the fourth quarter of 2025, an increase of $0.10 million and a decrease of $2.87 million, respectively, compared with the same periods in 2024. The ratio of nonperforming assets to loans and leases was 1.10% as of December 31, 2025, compared to 0.91% on September 30, 2025 and 0.46% on December 31, 2024. Nonperforming assets increased $14.19 million during the fourth quarter primarily due to the addition of one auto rental client, with whom we are actively engaged and pursuing resolution strategies. Capital As of December 31, 2025, the common equity-to-assets ratio was 14.08%, compared to 13.65% at September 30, 2025 and 12.44% a year ago. The tangible common equity-to-tangible assets ratio was 13.28% at December 31, 2025 compared to 12.85% at September 30, 2025 and 11.61% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 15.52% at December 31, 2025 compared to 15.18% at September 30, 2025 and 14.21% a year ago. During the fourth quarter and full year of 2025, 69,673 shares and 230,036 shares were repurchased for treasury reducing common shareholders' equity by $4.19 million and $13.87 million, respectively. 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," "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 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 4th QUARTER 2025 FINANCIAL HIGHLIGHTS (Unaudited - Dollars in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2025 2025 2024 2025 2024 AVERAGE BALANCES Assets $ 9,070,471 $ 9,033,539 $ 8,824,464 $ 8,981,337 $ 8,739,539 Earning assets 8,651,605 8,625,825 8,378,064 8,563,593 8,284,489 Investments 1,519,175 1,472,520 1,580,016 1,496,807 1,570,364 Loans and leases 6,953,090 7,015,389 6,676,421 6,934,619 6,598,329 Deposits 7,421,006 7,424,112 7,146,149 7,382,291 7,118,957 Interest bearing liabilities 5,956,902 5,992,547 5,841,096 5,967,003 5,838,539 Common shareholders' equity 1,261,725 1,219,234 1,115,473 1,202,863 1,057,331 Total equity 1,306,954 1,276,923 1,186,337 1,259,876 1,130,342 INCOME STATEMENT DATA Net interest income $ 93,295 $ 88,750 $ 79,366 $ 348,175 $ 300,817 Net interest income - FTE(1) 93,453 88,904 79,516 348,787 301,403 Provision for credit losses 711 896 3,580 12,562 12,466 Noninterest income 17,537 21,906 18,482 85,603 86,307 Noninterest expense 56,557 54,776 54,208 216,839 203,601 Net income 41,131 42,279 31,437 158,259 132,618 Net income available to common shareholders 41,142 42,296 31,438 158,277 132,623 PER SHARE DATA Basic net income per common share $ 1.67 $ 1.71 $ 1.27 $ 6.41 $ 5.36 Diluted net income per common share 1.67 1.71 1.27 6.41 5.36 Common cash dividends declared 0.40 0.38 0.36 1.52 1.40 Book value per common share(2) 52.32 50.60 45.31 52.32 45.31 Tangible book value per common share(1) 48.88 47.17 41.89 48.88 41.89 Market value - High 67.39 66.15 68.13 67.77 68.13 Market value - Low 56.89 58.06 57.04 52.14 47.30 Basic weighted average common shares outstanding 24,391,070 24,472,035 24,515,454 24,487,374 24,496,148 Diluted weighted average common shares outstanding 24,391,070 24,472,035 24,515,454 24,487,374 24,496,148 KEY RATIOS Return on average assets 1.80 % 1.86 % 1.42 % 1.76 % 1.52 % Return on average common shareholders' equity 12.94 13.76 11.21 13.16 12.54 Average common shareholders' equity to average assets 13.91 13.50 12.64 13.39 12.10 End of period tangible common equity to tangible assets(1) 13.28 12.85 11.61 13.28 11.61 Risk-based capital - Common Equity Tier 1(3) 15.52 15.18 14.21 15.52 14.21 Risk-based capital - Tier 1(3) 16.79 16.59 15.82 16.79 15.82 Risk-based capital - Total(3) 18.05 17.85 17.08 18.05 17.08 Net interest margin 4.28 4.08 3.77 4.07 3.63 Net interest margin - FTE(1) 4.29 4.09 3.78 4.07 3.64 Efficiency ratio: expense to revenue 51.03 49.50 55.40 49.99 52.59 Efficiency ratio: expense to revenue - adjusted(1) 48.56 49.17 53.01 49.32 51.90 Net charge-offs to average loans and leases 0.02 0.11 0.04 0.06 0.09 Loan and lease loss allowance to loans and leases 2.30 2.32 2.27 2.30 2.27 Nonperforming assets to loans and leases 1.10 0.91 0.46 1.10 0.46 December 31, September 30, June 30, March 31, December 31, 2025 2025 2025 2025 2024 END OF PERIOD BALANCES Assets $ 9,055,270 $ 9,056,691 $ 9,087,162 $ 8,963,114 $ 8,931,938 Loans and leases 7,046,669 6,964,454 7,097,969 6,863,393 6,854,808 Deposits 7,225,575 7,409,819 7,442,669 7,417,765 7,230,035 Allowance for loan and lease losses 161,846 161,430 163,484 157,470 155,540 Goodwill and intangible assets 83,895 83,895 83,895 83,895 83,897 Common shareholders' equity 1,274,971 1,236,472 1,198,589 1,161,459 1,111,068 Total equity 1,318,090 1,291,431 1,257,424 1,220,542 1,181,506 ASSET QUALITY Loans and leases past due 90 days or more $ 460 $ 317 $ 198 $ 122 $ 106 Nonaccrual loans and leases 76,602 62,264 71,732 40,540 30,613 Other real estate — 120 — — 460 Repossessions 267 435 3,549 2,410 155 Equipment owned under operating leases 49 56 62 — — Total nonperforming assets $ 77,378 $ 63,192 $ 75,541 $ 43,072 $ 31,334 (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) December 31, September 30, June 30, December 31, 2025 2025 2025 2024 ASSETS Cash and due from banks $ 69,249 $ 75,316 $ 88,810 $ 76,837 Federal funds sold and interest bearing deposits with other banks 50,608 138,942 60,298 47,989 Investment securities available-for-sale, at fair value (amortized cost of $1,568,429, $1,555,564, $1,530,847, and $1,650,684 at December 31, 2025, September 30, 2025, June 30, 2025, and December 31, 2024, respectively) 1,522,486 1,495,117 1,456,157 1,536,299 Other investments 22,140 22,140 22,140 23,855 Mortgages held for sale 4,866 7,110 4,334 2,569 Loans and leases, net of unearned discount: Commercial and agricultural 797,592 759,167 835,826 772,974 Renewable energy 652,799 603,715 573,226 487,266 Auto and light truck 887,876 924,992 972,461 948,435 Medium and heavy duty truck 269,749 280,302 282,875 289,623 Aircraft 1,086,821 1,095,423 1,134,838 1,123,797 Construction equipment 1,221,135 1,207,446 1,207,209 1,203,912 Commercial real estate 1,269,765 1,244,306 1,252,750 1,215,265 Residential real estate and home equity 740,777 726,585 714,026 680,071 Consumer 120,155 122,518 124,758 133,465 Total loans and leases 7,046,669 6,964,454 7,097,969 6,854,808 Allowance for loan and lease losses (161,846 ) (161,430 ) (163,484 ) (155,540) Net loans and leases 6,884,823 6,803,024 6,934,485 6,699,268 Equipment owned under operating leases, net 6,964 7,649 8,653 11,483 Premises and equipment, net 58,318 57,852 55,602 53,456 Goodwill and intangible assets 83,895 83,895 83,895 83,897 Accrued income and other assets 351,921 365,646 372,788 396,285 Total assets $ 9,055,270 $ 9,056,691 $ 9,087,162 $ 8,931,938 LIABILITIES Deposits: Noninterest bearing demand $ 1,600,495 $ 1,633,786 $ 1,583,621 $ 1,639,101 Interest-bearing deposits: Interest-bearing demand 2,592,202 2,512,205 2,601,353 2,544,839 Savings 1,446,278 1,396,931 1,359,841 1,256,370 Time 1,586,600 1,866,897 1,897,854 1,789,725 Total interest-bearing deposits 5,625,080 5,776,033 5,859,048 5,590,934 Total deposits 7,225,575 7,409,819 7,442,669 7,230,035 Short-term borrowings: Federal funds purchased and securities sold under agreements to repurchase 112,470 72,190 58,242 72,346 Other short-term borrowings 126,151 1,384 51,816 176,852 Total short-term borrowings 238,621 73,574 110,058 249,198 Long-term debt and mandatorily redeemable securities 43,330 42,234 41,850 39,156 Subordinated notes 58,764 58,764 58,764 58,764 Accrued expenses and other liabilities 170,890 180,869 176,397 173,279 Total liabilities 7,737,180 7,765,260 7,829,738 7,750,432 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 December 31, 2025, September 30, 2025, June 30, 2025, and December 31, 2024 436,538 436,538 436,538 436,538 Retained earnings 1,015,160 983,615 950,363 890,937 Cost of common stock in treasury (3,836,656, 3,771,570, 3,674,878, and 3,685,512 shares at December 31, 2025, September 30, 2025, June 30, 2025, and December 31, 2024, respectively) (141,950 ) (137,818 ) (131,551 ) (129,175) Accumulated other comprehensive loss (34,777 ) (45,863 ) (56,761 ) (87,232) Total shareholders' equity 1,274,971 1,236,472 1,198,589 1,111,068 Noncontrolling interests 43,119 54,959 58,835 70,438 Total equity 1,318,090 1,291,431 1,257,424 1,181,506 Total liabilities and equity $ 9,055,270 $ 9,056,691 $ 9,087,162 $ 8,931,938 1st SOURCE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited - Dollars in thousands, except per share amounts) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2025 2025 2024 2025 2024 Interest income: Loans and leases $ 119,981 $ 120,242 $ 113,826 $ 471,013 $ 451,329 Investment securities, taxable 10,802 8,803 7,621 36,360 25,720 Investment securities, tax-exempt 316 301 278 1,191 1,043 Other 1,887 1,542 1,425 5,830 5,925 Total interest income 132,986 130,888 123,150 514,394 484,017 Interest expense: Deposits 37,308 39,654 40,221 155,914 166,842 Short-term borrowings 234 307 2,207 1,582 8,976 Subordinated notes 1,002 1,010 1,041 4,033 4,217 Long-term debt and mandatorily redeemable securities 1,147 1,167 315 4,690 3,165 Total interest expense 39,691 42,138 43,784 166,219 183,200 Net interest income 93,295 88,750 79,366 348,175 300,817 Provision for credit losses: Provision (recovery of provision) for credit losses — loans and leases 695 (179 ) 3,904 10,512 13,663 Provision (recovery of provision) for credit losses — unfunded loan commitments 16 1,075 (324 ) 2,050 (1,197) Total provision for credit losses 711 896 3,580 12,562 12,466 Net interest income after provision for credit losses 92,584 87,854 75,786 335,613 288,351 Noninterest income: Trust and wealth advisory 7,110 6,825 6,817 27,867 26,709 Service charges on deposit accounts 3,487 3,437 3,325 13,184 12,877 Debit card 4,528 4,530 4,424 17,774 17,785 Mortgage banking 1,103 1,031 938 4,103 4,210 Insurance commissions 1,730 1,845 1,702 7,700 6,730 Equipment rental 650 693 1,102 3,021 5,171 Losses on investment securities available-for-sale (5,805 ) (1,877 ) (3,889 ) (8,679 ) (3,889) Other 4,734 5,422 4,063 20,633 16,714 Total noninterest income 17,537 21,906 18,482 85,603 86,307 Noninterest expense: Salaries and employee benefits 33,432 32,217 31,825 129,564 121,909 Net occupancy 3,380 3,085 3,024 12,724 11,939 Furniture and equipment 1,857 1,566 1,702 6,454 5,612 Data processing 7,565 7,578 7,353 29,844 27,567 Depreciation - leased equipment 521 557 879 2,415 4,073 Professional fees 2,183 1,765 2,112 7,115 7,098 FDIC and other insurance 1,461 1,454 1,435 5,793 6,142 Business development and marketing 2,200 2,846 1,435 8,855 6,876 Other 3,958 3,708 4,443 14,075 12,385 Total noninterest expense 56,557 54,776 54,208 216,839 203,601 Income before income taxes 53,564 54,984 40,060 204,377 171,057 Income tax expense 12,433 12,705 8,623 46,118 38,439 Net income 41,131 42,279 31,437 158,259 132,618 Net loss attributable to noncontrolling interests 11 17 1 18 5 Net income available to common shareholders $ 41,142 $ 42,296 $ 31,438 $ 158,277 $ 132,623 Per common share: Basic net income per common share $ 1.67 $ 1.71 $ 1.27 $ 6.41 $ 5.36 Diluted net income per common share $ 1.67 $ 1.71 $ 1.27 $ 6.41 $ 5.36 Basic weighted average common shares outstanding 24,391,070 24,472,035 24,515,454 24,487,374 24,496,148 Diluted weighted average common shares outstanding 24,391,070 24,472,035 24,515,454 24,487,374 24,496,148 1st SOURCE CORPORATION DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY INTEREST RATES AND INTEREST DIFFERENTIAL (Unaudited - Dollars in thousands) Three Months Ended December 31, 2025 September 30, 2025 December 31, 2024 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 $ 1,483,960 $ 10,802 2.89 % $ 1,439,793 $ 8,803 2.43 % $ 1,548,340 $ 7,621 1.96 % Tax-exempt(1) 35,215 398 4.48 % 32,727 379 4.59 % 31,676 350 4.40 % Mortgages held for sale 5,228 78 5.92 % 4,516 73 6.41 % 3,159 52 6.55 % Loans and leases, net of unearned discount(1) 6,953,090 119,979 6.85 % 7,015,389 120,245 6.80 % 6,676,421 113,852 6.78 % Other investments 174,112 1,887 4.30 % 133,400 1,542 4.59 % 118,468 1,425 4.79 % Total earning assets(1) 8,651,605 133,144 6.11 % 8,625,825 131,042 6.03 % 8,378,064 123,300 5.85 % Cash and due from banks 75,004 59,957 74,243 Allowance for loan and lease losses (162,941 ) (164,984 ) (153,798 ) Other assets 506,803 512,741 525,955 Total assets $ 9,070,471 $ 9,033,539 $ 8,824,464 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing deposits $ 5,783,353 $ 37,308 2.56 % $ 5,817,284 $ 39,654 2.70 % $ 5,506,501 $ 40,221 2.91 % Short-term borrowings: Securities sold under agreements to repurchase 59,330 121 0.81 % 59,297 148 0.99 % 67,697 176 1.03 % Other short-term borrowings 13,028 113 3.44 % 15,556 159 4.06 % 169,133 2,031 4.78 % Subordinated notes 58,764 1,002 6.76 % 58,764 1,010 6.82 % 58,764 1,041 7.05 % Long-term debt and mandatorily redeemable securities 42,427 1,147 10.73 % 41,646 1,167 11.12 % 39,001 315 3.21 % Total interest-bearing liabilities 5,956,902 39,691 2.64 % 5,992,547 42,138 2.79 % 5,841,096 43,784 2.98 % Noninterest-bearing deposits 1,637,653 1,606,828 1,639,648 Other liabilities 168,962 157,241 157,383 Shareholders' equity 1,261,725 1,219,234 1,115,473 Noncontrolling interests 45,229 57,689 70,864 Total liabilities and equity $ 9,070,471 $ 9,033,539 $ 8,824,464 Less: Fully tax-equivalent adjustments (158 ) (154 ) (150 ) Net interest income/margin (GAAP-derived)(1) $ 93,295 4.28 % $ 88,750 4.08 % $ 79,366 3.77 % Fully tax-equivalent adjustments 158 154 150 Net interest income/margin - FTE(1) $ 93,453 4.29 % $ 88,904 4.09 % $ 79,516 3.78 % (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) Twelve Months Ended December 31, 2025 December 31, 2024 Average Balance Interest Income/Expense Yield/ Rate Average Balance Interest Income/Expense Yield/ Rate ASSETS Investment securities available-for-sale: Taxable $ 1,463,913 $ 36,360 2.48 % $ 1,539,900 $ 25,720 1.67 % Tax-exempt(1) 32,894 1,501 4.56 % 30,464 1,312 4.31 % Mortgages held for sale 3,894 245 6.29 % 3,233 214 6.62 % Loans and leases, net of unearned discount(1) 6,934,619 471,070 6.79 % 6,598,329 451,432 6.84 % Other investments 128,273 5,830 4.54 % 112,563 5,925 5.26 % Total earning assets(1) 8,563,593 515,006 6.01 % 8,284,489 484,603 5.85 % Cash and due from banks 66,638 65,285 Allowance for loan and lease losses (161,191 ) (151,050 ) Other assets 512,297 540,815 Total assets $ 8,981,337 $ 8,739,539 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing deposits $ 5,780,337 $ 155,914 2.70 % $ 5,509,956 $ 166,842 3.03 % Short-term borrowings: Securities sold under agreements to repurchase 59,433 494 0.83 % 60,388 542 0.90 % Other short-term borrowings 27,191 1,088 4.00 % 168,460 8,434 5.01 % Subordinated notes 58,764 4,033 6.86 % 58,764 4,217 7.18 % Long-term debt and mandatorily redeemable securities 41,278 4,690 11.36 % 40,971 3,165 7.72 % Total interest-bearing liabilities 5,967,003 166,219 2.79 % 5,838,539 183,200 3.14 % Noninterest-bearing deposits 1,601,954 1,609,001 Other liabilities 152,504 161,657 Shareholders' equity 1,202,863 1,057,331 Noncontrolling interests 57,013 73,011 Total liabilities and equity $ 8,981,337 $ 8,739,539 Less: Fully tax-equivalent adjustments (612 ) (586 ) Net interest income/margin (GAAP-derived)(1) $ 348,175 4.07 % $ 300,817 3.63 % Fully tax-equivalent adjustments 612 586 Net interest income/margin - FTE(1) $ 348,787 4.07 % $ 301,403 3.64 % (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 Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2025 2025 2024 2025 2024 Calculation of Net Interest Margin (A) Interest income (GAAP) $ 132,986 $ 130,888 $ 123,150 $ 514,394 $ 484,017 Fully tax-equivalent adjustments: (B) - Loans and leases 76 76 78 302 317 (C) - Tax-exempt investment securities 82 78 72 310 269 (D) Interest income - FTE (A+B+C) 133,144 131,042 123,300 515,006 484,603 (E) Interest expense (GAAP) 39,691 42,138 43,784 166,219 183,200 (F) Net interest income (GAAP) (A-E) 93,295 88,750 79,366 348,175 300,817 (G) Net interest income - FTE (D-E) 93,453 88,904 79,516 348,787 301,403 (H) Annualization factor 3.967 3.967 3.978 1.000 1.000 (I) Total earning assets $ 8,651,605 $ 8,625,825 $ 8,378,064 $ 8,563,593 $ 8,284,489 Net interest margin (GAAP-derived) (F*H)/I 4.28 % 4.08 % 3.77 % 4.07 % 3.63 % Net interest margin - FTE (G*H)/I 4.29 % 4.09 % 3.78 % 4.07 % 3.64 % Calculation of Efficiency Ratio (F) Net interest income (GAAP) $ 93,295 $ 88,750 $ 79,366 $ 348,175 $ 300,817 (G) Net interest income - FTE 93,453 88,904 79,516 348,787 301,403 (J) Plus: noninterest income (GAAP) 17,537 21,906 18,482 85,603 86,307 (K) Less: gains/losses on investment securities and partnershipinvestments 4,919 9 3,487 2,762 809 (L) Less: depreciation - leased equipment (521 ) (557 ) (879 ) (2,415 ) (4,073) (M) Total net revenue (GAAP) (F+J) 110,832 110,656 97,848 433,778 387,124 (N) Total net revenue - adjusted (G+J-K-L) 115,388 110,262 100,606 434,737 384,446 (O) Noninterest expense (GAAP) 56,557 54,776 54,208 216,839 203,601 (L) Less: depreciation - leased equipment (521 ) (557 ) (879 ) (2,415 ) (4,073) (P) Noninterest expense - adjusted (O-L) 56,036 54,219 53,329 214,424 199,528 Efficiency ratio (GAAP-derived) (O/M) 51.03 % 49.50 % 55.40 % 49.99 % 52.59 % Efficiency ratio - adjusted (P/N) 48.56 % 49.17 % 53.01 % 49.32 % 51.90 % End of Period December 31, September 30, December 31, 2025 2025 2024 Calculation of Tangible Common Equity-to-Tangible Assets Ratio (Q) Total common shareholders' equity (GAAP) $ 1,274,971 $ 1,236,472 $ 1,111,068 (R) Less: goodwill and intangible assets (83,895 ) (83,895 ) (83,897 ) (S) Total tangible common shareholders' equity (Q-R) $ 1,191,076 $ 1,152,577 $ 1,027,171 (T) Total assets (GAAP) 9,055,270 9,056,691 8,931,938 (R) Less: goodwill and intangible assets (83,895 ) (83,895 ) (83,897 ) (U) Total tangible assets (T-R) $ 8,971,375 $ 8,972,796 $ 8,848,041 Common equity-to-assets ratio (GAAP-derived) (Q/T) 14.08 % 13.65 % 12.44 % Tangible common equity-to-tangible assets ratio (S/U) 13.28 % 12.85 % 11.61 % Calculation of Tangible Book Value per Common Share (Q) Total common shareholders' equity (GAAP) $ 1,274,971 $ 1,236,472 $ 1,111,068 (V) Actual common shares outstanding 24,369,018 24,434,104 24,520,162 Book value per common share (GAAP-derived) (Q/V)*1000 $ 52.32 $ 50.60 $ 45.31 Tangible common book value per share (S/V)*1000 $ 48.88 $ 47.17 $ 41.89 To view the source version of this press release, please visit https://www.newsfilecorp.com/release/281252 SOURCE 1st Source Corporation