1st Source (SRCE) investor relations material

Executive summary

• Achieved record net income of $47.54 million for Q2 2026, up 18.99% sequentially and 27.40% year-over-year, with total assets reaching $9.26 billion at June 30, 2026.

• Diluted EPS rose to $1.95 for Q2 and $3.58 for the first half, up from $1.51 and $3.02 in the prior year.

• Maintained a strong capital position and credit quality, supporting long-term shareholder value and 38 consecutive years of dividend growth.

• Recognized for leadership, innovation, and client service, earning multiple industry awards and top rankings, including KBW Bank Honor Roll and Forbes accolades.

• Opened a new banking center in West Lafayette, expanding regional presence.

Financial highlights

• Net income reached $158 million in 2025 and $88 million YTD 2026, with net interest income for Q2 2026 at $93.14 million and net interest margin (FTE) at 4.24%.

• Noninterest income for 2026 YTD was $47.1 million, with Q2 noninterest income at $25.02 million, up 8.51% year-over-year.

• Pre-tax, pre-provision income was $216.9 million in 2025 and $121.8 million YTD 2026.

• Provision for credit losses dropped to $1.54 million in Q2 2026, down from $7.69 million in Q2 2025.

• Noninterest expense increased 4.95% in Q2, mainly due to higher salaries, benefits, and professional fees.

Outlook and guidance

• Management emphasizes long-term EPS and tangible book value growth, supported by a diversified product mix and stable credit quality, but maintains a cautious outlook due to geopolitical uncertainty and inflation.

• Continued investment in digital banking, instant payments, and renewable energy financing to drive future growth.

• Forward-looking statements caution about risks from economic, regulatory, and industry changes.