Exhibit 99.1
Immediate Release Contact:
Brett Bauer
October 22, 2026 574-235-2000 1st Source Corporation Reports Record Third Quarter Results,
Cash Dividend Declared
QUARTERLY HIGHLIGHTS
• Net income was $49.54 million for the quarter, up $2.00 million or 4.20% from the previous quarter and up $7.25 million or 17.13% from the third quarter of 2025. Diluted net income per common share was $2.03, up $0.08 or 4.10% from the previous quarter and up $0.32 or 18.71% from the prior year’s third quarter of $1.71. These results include $3.82 million in pre-tax losses from the sale of approximately $68 million of available-for-sale securities executed in the third quarter as well as a $1.00 million charitable contribution to the 1st Source Bank Foundation.
• Return on average assets was 2.12% for the current quarter, up from 2.06% in the previous quarter and up from 1.86% in the third quarter of 2025. Return on average common shareholders’ equity increased to 14.80% compared to 14.66% in the previous quarter and 13.76% in the third quarter of 2025.
• A cash dividend of $0.45 per common share for the quarter was approved, up five cents or 12.50% from the cash dividend declared a year ago.
• Average loans and leases increased $112.77 million or 1.58% from the previous quarter and $240.08 million, or 3.42% from the third quarter of 2025.
• Tax-equivalent net interest income was $95.74 million, up $2.45 million or 2.62% from the previous quarter and up $6.84 million, or 7.69% from the third quarter a year ago. Tax-equivalent net interest margin was 4.28%, up four basis points from the previous quarter and up 19 basis points from the third quarter of 2025.
• Provision for credit losses of $0.90 million was recorded during the quarter compared to $1.54 million in the previous quarter and $0.90 million during the previous year’s third quarter. The allowance for loan and lease losses as a percentage of total loans and leases was 2.28% at September 30, 2026, down from 2.30% at June 30, 2026 and down from 2.32% as of September 30, 2025.
South Bend, IN - 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $49.54 million for the third quarter of 2026, up 4.20% compared to $47.54 million reported in the previous quarter and up 17.13% compared to $42.30 million in the third quarter a year ago. Diluted net income per common share for the third quarter of 2026 was $2.03, up 4.10% compared to $1.95 in the previous quarter and up 18.71% versus $1.71 in the third quarter of 2025.
At its October 2026 meeting, the Board of Directors approved a cash dividend of $0.45 per common share, up five cents or 12.50% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on November 3, 2026, and will be paid on November 13, 2026.
Andrea G. Short, President and Chief Executive Officer, commented, “We are pleased to announce that we achieved record quarterly net income during the third quarter along with net interest margin expansion and an improved efficiency ratio. Average loans and leases grew $112.77 million, up 1.58% while average deposits increased marginally due to seasonal outflows of public fund deposits, compared to the previous quarter. Average year-to-date deposits, net of brokered deposits, increased $238.74 million or 3.50% compared to the prior year. Strong credit quality continued during the quarter with low net charge-offs, a lower provision for credit losses, and a reduction in nonperforming assets. Our liquidity and capital positions remained strong during the quarter.
- 1 - “We were excited to launch the Payments Hub platform for our Treasury Services clients, offering significant time savings and efficient payment routing. This new platform modernizes and simplifies payment operations for single, electronic payments by bringing payment activities into a centralized platform. It incorporates standard ACH, FedNow®, Real-Time Payments® and Instant Payments®, all of which offer different combinations of speed, cost, and availability. Rather than requiring our clients to become experts in each payment type, this new platform uses intelligent payment routing, which chooses the best payment choice balancing speed and costs.
“Another welcome honor was when two of our Board members along with myself, were named on the Indiana 250 list by IBJ Media. Chris Murphy, our Executive Chairman, and Tracy Graham were both included in the list that highlights the most influential business leaders in Indiana. We are honored to have this level of experience and leadership on our Board of Directors.” Mrs. Short concluded.
THIRD QUARTER 2026 FINANCIAL RESULTS
Loans and Leases Third quarter average loans and leases were $7.26 billion, which was up $112.77 million or 1.58% from the previous quarter and increased $240.08 million or 3.42% from the third quarter of 2025. Year-to-date average loans and leases increased $212.76 million, up 3.07% from the first nine months of 2025. Average loan growth in the third quarter of 2026 occurred mainly within the Construction Equipment, Renewable Energy, Medium and Heavy Duty Truck, Residential Real Estate and Home Equity, and Aircraft portfolios.
Deposits Third quarter average deposits were $7.44 billion, which was up $16.45 million or 0.22%, from the previous quarter and increased $19.94 million or 0.27% compared to the third quarter a year ago. Average deposits for the first nine months of 2026 were $7.36 billion, a decrease of $13.91 million or 0.19% from the same period a year ago. Average deposit balances increased from the previous quarter primarily due to higher noninterest-bearing demand deposits, time deposits, and savings deposits offset by a decrease in interest-bearing demand deposits which included seasonal decreases associated with municipal tax collection cycles. Average brokered deposits were $320.56 million, an increase of $19.48 million or 6.47% compared to the previous quarter and a decrease of $223.84 million or 41.12% from the prior year third quarter.
Net Interest Income and Net Interest Margin Third quarter 2026 tax-equivalent net interest income increased $2.45 million to $95.74 million, up 2.62% from the previous quarter and was $6.84 million, or 7.69% higher compared to the third quarter a year ago. For the nine months of 2026, tax equivalent net interest income increased $24.00 million to $279.33 million, up 9.40% from the same period a year ago.
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Noninterest Income Third quarter 2026 noninterest income of $24.70 million decreased $0.32 million or 1.29% compared to the previous quarter and was higher by $2.79 million or 12.74% compared to the third quarter a year ago. For the first nine months of 2026, noninterest income increased $4.65 million or 6.83% from the first nine months of 2025.
The decrease from the previous quarter was mainly due to realized losses of $3.82 million in the third quarter from repositioning of available-for sale securities. The securities sold during the quarter had a weighted average yield of 1.83% and were replaced with securities having a weighted average yield of 5.10%. Additional decreases in the quarter were from lower trust and wealth advisory income from seasonal tax preparation fees in the second quarter and a reduction in estate administration fees, fewer interest rate swap fees and lower equipment rental income. These decreases were offset by increased partnership investment gains including the sale of renewable energy tax equity investments of $3.03 million, higher deposit account fees, an increase in bank owned life insurance policy claims recognized, and increased mortgage banking income and insurance commissions.
The increase in noninterest income compared to the third quarter and first nine months of 2025 was the result of increased trust and wealth advisory income from elevated estate administration fees, and higher partnership investment gains and increased income from bank owned life insurance claims mentioned above. These increases were offset by higher realized losses from repositioning of available-for-sale securities, fewer customer interest rate swap fees and reduced equipment rental income as demand for operating leases continued to decline.
Noninterest Expense Third quarter 2026 noninterest expense of $55.22 million was relatively flat compared to the prior quarter and the third quarter a year ago. For the first nine months of 2026, noninterest expense increased $4.48 million, or 2.80% from the first nine months of 2025.
The marginal increase in noninterest expense compared to the prior quarter was the result of a $1.00 million charitable contribution and fewer gains on the sale of repossessed assets offset by lower group insurance claims and decreased furniture and equipment expense.
The increase in noninterest expense compared to the first nine months of 2025 was the result of increased salaries and wages due to normal merit increases, increased incentive compensation, and higher employer profit sharing contribution expense offset by fewer group insurance claims. Additionally, we saw increased occupancy expenses from snow removal during the first quarter and premises repairs, higher professional consulting costs from technology projects, a rise in collection and repossession legal expenses, 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 fixed assets and repossessed assets.