Business/Financial Results (Form 8-K)

For:			Immediate Release			Contact:			Brett Bauer
			April 23, 2026						574-235-2000

1st Source Corporation Reports Record First Quarter Results,

Increased Cash Dividend Declared

QUARTERLY HIGHLIGHTS

•Net income was $39.96 million for the quarter, up $2.44 million or 6.49% from the first quarter of 2025 and down $1.19 million or 2.88% from the previous quarter. Diluted net income per common share was $1.63, up $0.11 or 7.24% from the prior year's first quarter of $1.52 and down $0.04 or 2.40% from the previous quarter.

•Return on average assets was 1.80% for the current quarter, up from 1.72% in the first quarter of 2025 and unchanged from the previous quarter. Return on average common shareholders' equity decreased to 12.53% compared to 13.33% in the first quarter of 2025 and 12.94% in the previous quarter.

•A cash dividend increase of three cents per share to $0.43 per common share for the quarter was approved, up five cents or 13.16% from the cash dividend declared a year ago.

•During the first quarter of 2026, 338,356 shares were repurchased for $23.35 million and placed into treasury.

•Average loans and leases grew $223.81 million, or 3.29% from the first quarter of 2025 and increased $69.67 million or 1.00% from the previous quarter.

•Average deposits decreased $141.97 million or 1.94% from the first quarter a year ago and decreased $229.44 million or 3.09% from the previous quarter. Average deposits, net of brokered deposits, increased $212.25 million or 3.16% from the first quarter of 2025 and decreased $106.42 million or 1.51% from the previous quarter.

•Tax-equivalent net interest income was $90.29 million, up $9.21 million, or 11.36% from the first quarter a year ago and down $3.16 million or 3.38% from the previous quarter. Tax-equivalent net interest margin was 4.25%, up 35 basis points from the first quarter of 2025 and down four basis points from the previous quarter. Higher yields on investment securities from portfolio repositioning trades during 2025 helped limit margin contraction partially offset by lower net interest recoveries compared to the previous quarter.

•Provision for credit losses of $7.27 million was recorded during the quarter compared to $3.27 million during the previous year's first quarter and $0.71 million in the previous quarter. The allowance for loan and lease losses as a percentage of total loans and leases rose to 2.33% at March 31, 2026, up from 2.29% at March 31, 2025 and 2.30% at December 31, 2025.

South Bend, IN - 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported quarterly net income of $39.96 million for the first quarter of 2026, up 6.49% compared to $37.52 million in the first quarter a year ago and down 2.88% compared to $41.14 million reported in the previous quarter. Diluted net income per common share for the first quarter of 2026 was $1.63, up 7.24% versus $1.52 in the first quarter of 2025 and down 2.40% compared to $1.67 in the previous quarter.

At its April 2026 meeting, the Board of Directors approved an increase in the cash dividend of three cents per share, raising the approved dividend for the quarter to $0.43 per common share, up five cents or 13.16% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on May 5, 2026, and will be paid on May 15, 2026.

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Andrea G. Short, President and Chief Executive Officer, commented, "We are pleased to announce that 1st Source had a record first quarter. We ended 2025 and the first quarter of 2026 with a very strong and stable balance sheet and we will continue to focus on safety and soundness given the level of economic uncertainty currently impacting our clients and their businesses. During the first quarter of 2026, average loans and leases grew $69.67 million, up 1.00% from the previous quarter, our liquidity position remained solid, and our historically conservative capital position was maintained.

"We were happy to learn that 1st Source received several awards, further solidifying that our mission-first approach is the right way to do business. On a national scale, we were included in Forbes' America's Best Banks list for the third consecutive year and came in at #11 out of the top 100 named. This award is driven by 10 metrics measuring growth, credit quality, and profitability.

"Additionally, we learned that 1st Source was listed as #12 on Forbes' America's Best Midsize Employers list. This award is especially meaningful because it identifies companies that are rated most highly by their employees. Respondents ranked their employers on a range of criteria including salary, work environment, and opportunities to advance. We greatly value this feedback, and it aligns with our culture and core values of integrity, teamwork, superior quality, outstanding client service, and community leadership.

"And finally, at the state level, 1st Source was recognized for our small business lending across Indiana for the 13th year in a row by the Indiana District Office of the U.S. Small Business Administration (SBA). We once again received the Community Bank Gold Level Award for delivering the greatest number of SBA loans in Indiana in 2025." Mrs. Short concluded.

FIRST QUARTER 2026 FINANCIAL RESULTS

Loans and Leases

First quarter average loans and leases were $7.02 billion, which was up $223.81 million or 3.29% from the first quarter of 2025 and increased $69.67 million or 1.00% from the previous quarter. Average loan growth in the first quarter of 2026 occurred mainly within the Renewable Energy, Commercial and Agricultural, and Commercial Real Estate portfolios.

Deposits

First quarter average deposits were $7.19 billion, which was down $141.97 million or 1.94% compared to the first quarter a year ago and decreased $229.44 million or 3.09%, from the previous quarter. Average deposit balances decreased from the previous quarter primarily due to lower brokered deposits, seasonal outflows of interest-bearing public fund deposits, and decreased noninterest-bearing demand deposits. Average brokered deposits were $259.29 million, a decrease of $354.23 million or 57.74% from the prior year first quarter and were $123.02 million or 32.18% lower than the previous quarter.

Net Interest Income and Net Interest Margin

First quarter 2026 tax-equivalent net interest income increased $9.21 million, or 11.36% from the first quarter a year ago and decreased $3.16 million to $90.29 million, down 3.38% from the previous quarter.

First quarter 2026 net interest margin was 4.24%, an increase of 35 basis points from the same period in 2025 and a decrease of four basis points from the 4.28% in the previous quarter. On a fully tax-equivalent basis, first quarter 2026 net interest margin was 4.25%, an increase of 35 basis points from the same period in 2025 and down four basis points compared to the 4.29% in the previous quarter. The increase from the first 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. The decrease from the prior quarter was primarily due to lower yields on loans and leases and higher short-term borrowing costs offset by increased yields on investments from portfolio repositioning trades executed during 2025 and lower interest-bearing deposit costs. Net interest recoveries had a positive one basis point impact during the first quarter on the tax-equivalent net interest margin, compared to a positive seven basis points in the prior year first quarter and positive 14 basis points during the previous quarter.

Noninterest Income

First quarter 2026 noninterest income of $23.00 million was relatively flat compared to the first quarter a year ago and increased $5.46 million or 31.16% compared to the previous quarter.

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The increase from the previous quarter was mainly due to available-for-sale securities losses of $5.81 million realized in the prior quarter and increased insurance commissions, offset by lower brokerage fees and commissions, lower interest rate swap fees, a reduction in debit card income, and lower deposit account fees.

Noninterest Expense

First quarter 2026 noninterest expense of $54.52 million increased $1.44 million or 2.71% from the first quarter a year ago and decreased $2.04 million or 3.61% compared to the prior quarter.

The increase in noninterest expense compared to the first quarter of 2025 was the result of increased salaries and wages due to normal merit increases, higher occupancy expenses from snow removal, increased data processing charges and a rise in debit card losses. These increases were offset by lower leased equipment depreciation and a decrease in legal fees.

The decrease in noninterest expense compared to the prior quarter was the result of reduced incentive compensation and fewer group insurance claims, lower professional consulting costs, decreased furniture and equipment expense, lower intangible asset amortization, and fewer business development and marketing expenses.

Credit

The allowance for loan and lease losses increased to $164.90 million as of March 31, 2026, or 2.33% of total loans and leases. The 2.33% is an increase compared to 2.29% at March 31, 2025 and 2.30% at December 31, 2025 due to a weakened economic outlook with increased uncertainty. Net charge-offs of $3.96 million were recorded for the first quarter of 2026, compared with net charge-offs of $0.18 million in the same quarter a year ago and net charge-offs of $0.28 million in the prior quarter.

The provision for credit losses was $7.27 million for the first quarter of 2026, an increase of $4.01 million compared with the same period in 2025 and an increase of $6.56 million from the previous quarter. Higher net charge-offs during the quarter, the majority of which were from two unique Auto and Light Truck accounts who provide special trailer units serving the film industry, were the primary reason for the increase in the provision for credit losses. The ratio of nonperforming assets to loans and leases was 1.03% as of March 31, 2026, compared to 0.63% on March 31, 2025 and 1.10% on December 31, 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 March 31, 2026, the common equity-to-assets ratio was 14.02%, compared to 12.96% a year ago and 14.08% at December 31, 2025. The tangible common equity-to-tangible assets ratio was 13.22% at March 31, 2026, compared to 12.14% a year earlier and 13.28% at December 31, 2025. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 15.30% at March 31, 2026, compared to 14.71% a year ago and 15.52% at December 31, 2025.

During the first quarter of 2026, 338,356 shares were repurchased for treasury reducing common shareholders' 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.

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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.