1st Source Corp. said first-quarter net income rose to a record $39.96 million, up $2.44 million, or 6.49%, from $37.52 million a year earlier, though it slipped $1.19 million, or 2.88%, from the fourth quarter’s $41.14 million.
Diluted earnings per share increased to $1.63 from $1.52 in the first quarter of 2025, but edged down from $1.67 in the prior quarter.
The bank raised its quarterly cash dividend to $0.43 per share, up three cents from the previous payout and five cents, or 13.16%, above the dividend declared a year ago.
Average loans and leases climbed to $7.02 billion, up $223.81 million, or 3.29%, from the first quarter of 2025 and $69.67 million, or 1.00%, from the prior quarter. Growth was concentrated in renewable energy, commercial and agricultural, and commercial real estate.
Average deposits fell to $7.19 billion, down $141.97 million, or 1.94%, from a year earlier and $229.44 million, or 3.09%, from the previous quarter. Brokered deposits dropped sharply to $259.29 million, down $354.23 million, or 57.74%, from the year-ago quarter and $123.02 million, or 32.18%, from the fourth quarter.
Tax-equivalent net interest income rose to $90.29 million, up $9.21 million, or 11.36%, from the first quarter of 2025, but was down $3.16 million, or 3.38%, from the previous quarter. Net interest margin widened to 4.25% from 3.90% a year earlier, but narrowed four basis points from the prior quarter.
Noninterest income was $23.00 million, essentially flat from a year ago, but up $5.46 million, or 31.16%, from the previous quarter. The quarterly increase reflected the absence of $5.81 million in securities losses recognized in the prior quarter, along with higher insurance commissions.
Noninterest expense rose to $54.52 million, up $1.44 million, or 2.71%, from the first quarter of 2025, but declined $2.04 million, or 3.61%, from the prior quarter.
The provision for credit losses jumped to $7.27 million, compared with $3.27 million a year earlier and $0.71 million in the fourth quarter. Net charge-offs were $3.96 million, up from $0.18 million in the year-ago quarter and $0.28 million in the prior quarter.
The allowance for loan and lease losses increased to $164.90 million, or 2.33% of total loans and leases, from 2.29% a year ago and 2.30% at the end of December.
Return on average assets improved to 1.80% from 1.72% a year earlier and was unchanged from the prior quarter. Return on average common shareholders’ equity eased to 12.53% from 13.33% a year earlier and 12.94% in the fourth quarter.
Capital ratios remained strong. Common equity-to-assets was 14.02%, up from 12.96% a year ago and slightly below 14.08% at year-end. Tangible common equity-to-tangible assets rose to 13.22% from 12.14% a year earlier, while the common equity tier 1 ratio increased to 15.30% from 14.71%. During the quarter, the company repurchased 338,356 shares for $23.35 million. Today the company's shares have moved 0.63% to a price of $68.48. For more information, read the company's full 8-K submission here.
