QUARTERLY HIGHLIGHTS

Net income was a record $37.52 million for the quarter, up $6.08 million or 19.35% from the previous quarter and up $8.07 million or 27.38% from the first quarter of 2024. Diluted net income per common share was $1.52, up $0.25 or 19.69% from the previous quarter and up $0.33 or 27.73% from the prior year's first quarter of $1.19. Return on average assets increased to 1.72% from 1.42% in the previous quarter and 1.37% in the first quarter of 2024. Return on average common shareholders' equity increased to 13.33% from 11.21%, in the previous quarter and 11.77% in the first quarter of 2024. Cash dividend of $0.38 per common share for the quarter was approved, up 11.76% from the cash dividend declared a year ago. Average loans and leases grew $122.53 million in the first quarter, up 1.84% (7.36% annualized growth) from the previous quarter and increased $294.88 million, up 4.53% from the first quarter of 2024. Average deposits increased $187.39 million in the first quarter, up 2.62% (10.48% annualized growth) from the previous quarter and grew $322.44 million, up 4.60% from the first quarter of 2024. Tax-equivalent net interest income was $81.09 million, up $1.57 million or 1.97% from the fourth quarter of 2024 and up $9.02 million, or 12.52% from the first quarter a year ago. Tax-equivalent net interest margin was 3.90%, up 12 basis points from the previous quarter and up 36 basis points from the first quarter a year ago. During the first quarter, we received a one-time $0.74 million after-tax interest payment on federal tax refunds from tax credit carrybacks. This was recognized through income tax expense and lowered the effective tax rate to 21.34% from 21.53% during the previous quarter and 22.24% from the first quarter a year ago.

South Bend, Indiana--(Newsfile Corp. - April 24, 2025) - 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record quarterly net income of $37.52 million for the first quarter of 2025, up 19.35% compared to $31.44 million the previous quarter and up 27.38% from the $29.46 million reported in the first quarter a year ago. Diluted net income per common share for the first quarter of 2025 was $1.52, up 19.69% compared to $1.27 in the previous quarter and up 27.73%, versus $1.19 in the first quarter of 2024. Return on average assets increased to 1.72% and return on average shareholders' equity increased to 13.33% during the first quarter from 1.42% and 11.21%, respectively, in the previous quarter.

At its April 2025 meeting, the Board of Directors approved a cash dividend of $0.38 per common share, up 11.76% from the cash dividend declared a year ago. The cash dividend is payable to shareholders of record on May 5, 2025, and will be paid on May 15, 2025.

Story Continues

Christopher J. Murphy III, Chairman and Chief Executive Officer, commented, "In spite of the noise in the economy and the uncertainty in the market, we are pleased to have achieved record quarterly net income during the quarter and net interest margin expansion compared to the previous quarter. Higher rates on investment securities, increased average loan and lease balances, and less reliance on higher costing short-term borrowings lead to a 12-basis point improvement of our margin from the prior quarter. This marks the fifth consecutive quarter of margin expansion despite persistent deposit rate competition. Most importantly, our balance sheet remained strong during the quarter and is well positioned to handle economic uncertainty, which seems to be increasing every day, adversely impacting our customers and their businesses. Our liquidity position is solid and our historically conservative capital position was maintained.

"During the first quarter of 2025 we were very happy to learn that 1st Source Bank won several local and national accolades. For the second consecutive year, we were included in Forbes' America's Best Banks list and came in at #26 out of the top 100 named. This award is driven by 10 metrics addressing growth, credit quality and profitability - a set of proof points that we are continuing to maintain a strong and stable balance sheet, sustainable earnings, and are staying true to our mission of helping our clients achieve security, build wealth, and realize their dreams.

"Additionally, for the fourth consecutive year, we were named to Forbes' America's Best Midsize Employers list. We are especially proud of this award because the list identifies companies that are rated most highly by their employees. They ranked the employers on everything from salary, work environment, training programs, and opportunities to advance. It is confirmation that our leadership team is upholding our culture built on core values of integrity, teamwork, superior quality, outstanding client service, and community leadership.

"In March, we were also pleased to learn that we were designated by S&P Global Market Intelligence's unit as among the Top 50 Community Banks with $3B to $10B in assets for the second year in a row, coming in at #25. This is a testament to our commitment to making smart financial decisions for the long term.

"At the state and local levels, we were recognized for our small business lending across the state of Indiana for the 12th consecutive year by the U.S. Small Business Administration (SBA). 1st Source once again received the Community Bank Gold Level Award for delivering the greatest number of SBA loans in Indiana in 2024. We were also proud to learn that we won five awards in Northwest Indiana Business Magazine's Best of Business awards in the Banking and Finance category. The awards won included Best Bank for Business, Best Bank for Customer Service, Best Business Investment Firm, Best Institution for Obtaining a Business Loan, and Best Wealth Management Advisory Firm - all in Michiana.

"And finally, in the first quarter, our Kouts and Portage Avenue Banking Centers underwent renovations and were converted to our side-by-side banking model. Our Winamac Banking Center was moved to a new location and now also showcases the side-by-side model. This experience invites clients behind the teller line, allowing for the Bank's clients and bankers to have a more transparent and inclusive relationship. We are also excited to have opened a new banking center in Carmel, Indiana in early April. This new location complements our existing loan production office in the Greater Indianapolis market, and we are eager to be able to serve both personal and business clients in that area with our full suite of services," Mr. Murphy concluded.

FIRST QUARTER 2025 FINANCIAL RESULTS

Loans and Leases

First quarter average loans and leases were $6.80 billion, which was up $122.53 million or 1.84% from the previous quarter, and increased $294.88 million, up 4.53% from the first quarter a year ago. Average loan and lease growth from the previous quarter occurred primarily within the Commercial Real Estate, Aircraft, Commercial and Agricultural, and Construction Equipment portfolios. Average loan and lease growth from the first quarter of 2024 was primarily in the Commercial Real Estate, Construction Equipment, and Renewable Energy portfolios. End of period loans and leases of $6.86 billion on March 31, 2025, were relatively flat from December 31, 2024, and were up $300.62 million or 4.58% from March 31, 2024.

Deposits

First quarter average deposits were $7.33 billion, which was up $187.39 million, or 2.62%, from the previous quarter, and up $322.44 million or 4.60% compared to the quarter ended March 31, 2024. Average deposit balances increased from the previous quarter primarily due to higher brokered and savings balances offset by lower interest-bearing and noninterest-bearing demand balances. Average deposit balance growth from the first quarter of 2024 was primarily in time, savings, and interest-bearing demand offset by decreased noninterest-bearing demand and brokered deposits. End of period deposits of $7.42 billion on March 31, 2025, were up $187.73 million or 2.60% from December 31, 2024, and were up $362.45 million or 5.14% from March 31, 2024.

Net Interest Income and Net Interest Margin

First quarter 2025 tax-equivalent net interest income increased $1.57 million to $81.09 million, up 1.97% from the previous quarter and increased $9.02 million, up 12.52% from the first quarter a year ago.

First quarter 2025 net interest margin was 3.89%, an increase of 12 basis points from the 3.77% in the previous quarter and an increase of 35 basis points from the same period in 2024. On a fully tax-equivalent basis, first quarter 2025 net interest margin was 3.90%, up 12 basis points compared to the 3.78% in the previous quarter, and an increase of 36 basis points from the same period in 2024. The increase from the prior quarter and first quarter of 2024 was primarily due to higher rates on investment securities, increased average loan and lease balances and less reliance on higher costing short-term borrowings. Additionally, higher net interest recoveries contributed seven basis points during the first quarter compared to three basis points in the previous quarter and four basis points in the prior year first quarter.

Noninterest Income

First quarter 2025 noninterest income of $23.10 million was up $4.62 million, or 25.00% from the previous quarter, and increased $0.95 million, up 4.27% compared to the first quarter a year ago.

The increase in noninterest income compared to the previous quarter was mainly due to available-for-sale securities losses of $3.90 million and a $0.86 million writedown on a small business capital investment that were realized in the prior quarter, and increased insurance contingent commissions offset by lower debit card income, fewer deposit account fees, and reduced equipment rental income as demand for operating leases continued to decline.

The increase in noninterest income compared to the first quarter of 2024 was primarily due to increased partnership investment gains on sale of renewable energy tax equity investments, increased interest rate swap fees, higher brokerage and commission fees, increased insurance contingent commissions and higher trust and wealth and advisory income due to improvements in overall market performance. These increases were offset by reduced equipment rental income as demand for operating leases declined and decreases in mortgage banking income from lower sales volumes and servicing fees.

Noninterest Expense

First quarter 2025 noninterest expense of $53.08 million decreased $1.13 million or 2.09% compared to the prior quarter and increased $4.37 million or 8.98% from the first quarter a year ago.

The increase in noninterest expense compared to the first quarter of 2024, was the result of higher salaries and wages from normal merit increases, increased incentive compensation and higher group insurance claims. Additionally, we saw increased data processing costs, higher professional fees as a result of increased audit and legal fees, fewer gains on the sale of fixed assets and off-lease equipment, and increased occupancy expense. These increases were offset by lower leased equipment depreciation and decreased blanket insurance premiums.

Credit

The allowance for loan and lease losses increased to $157.47 million as of March 31, 2025, or 2.29% of total loans and leases primarily as a result of a weakened forward economic outlook with increased uncertainty. This percentage compared to 2.27% at December 31, 2024, and 2.26% at March 31, 2024. Net charge-offs of $0.18 million were recorded for the first quarter of 2025, compared with net charge-offs of $0.69 million in the prior quarter and net charge-offs of $6.12 million in the same quarter a year ago.

The provision for credit losses was $3.27 million for the first quarter of 2025, a decrease of $0.32 million from the previous quarter and a decrease of $4.21 million compared with the same period in 2024. The decrease in the provision expense compared to the first quarter a year ago was due to decreased net charge-offs and lower special attention outstandings offset by loan growth and an increase in the provision for unfunded commitments. The ratio of nonperforming assets to loans and leases was 0.63% as of March 31, 2025, compared to 0.46% on December 31, 2024, and 0.34% on March 31, 2024.

Capital

As of March 31, 2025, the common equity-to-assets ratio was 12.96%, compared to 12.44% at December 31, 2024, and 11.65% a year ago. The tangible common equity-to-tangible assets ratio was 12.14% at March 31, 2025, compared to 11.61% at December 31, 2024, and 10.79% a year earlier. The Common Equity Tier 1 ratio, calculated under banking regulatory guidelines, was 14.71% at March 31, 2025, compared to 14.21% at December 31, 2024, and 13.48% a year ago.

Capital accretion over the last twelve months has been driven primarily by growth in retained earnings and a reduction in unrealized losses in our short-duration investment securities available-for-sale portfolio.

During the first quarter of 2025, 7,554 shares were repurchased for treasury reducing common shareholders' equity by $0.45 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.

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, 18 1st Source Bank Specialty Finance Group locations nationwide, nine Wealth Advisory Services locations, 10 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," "hope," "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

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(charts attached)

1st SOURCE CORPORATION  1st QUARTER 2025 FINANCIAL HIGHLIGHTS  (Unaudited - Dollars in thousands, except per share data)  Three Months Ended  March 31,   December 31,   March 31,  2025   2024   2024  AVERAGE BALANCES  Assets  $ 8,856,278  $ 8,824,464  $ 8,652,144  Earning assets   8,434,790   8,378,064   8,182,165  Investments   1,519,177   1,580,016   1,608,094  Loans and leases   6,798,952   6,676,421   6,504,069  Deposits   7,333,542   7,146,149   7,011,105  Interest bearing liabilities   5,920,255   5,841,096   5,783,480  Common shareholders' equity   1,141,922   1,115,473   1,006,286  Total equity   1,208,236   1,186,337   1,084,654  INCOME STATEMENT DATA  Net interest income  $ 80,938  $ 79,366  $ 71,915  Net interest income - FTE(1)   81,085   79,516   72,063  Provision for credit losses   3,265   3,580   7,477  Noninterest income   23,103   18,482   22,156  Noninterest expense   53,076   54,208   48,704  Net income   37,523   31,437   29,462  Net income available to common shareholders   37,520   31,438   29,455  PER SHARE DATA  Basic net income per common share  $ 1.52  $ 1.27  $ 1.19  Diluted net income per common share   1.52   1.27   1.19  Common cash dividends declared   0.36   0.36   0.34  Book value per common share(2)   47.29   45.31   41.26  Tangible book value per common share(1)   43.87   41.89   37.83  Market value - High   67.77   68.13   55.25  Market value - Low   53.23   57.04   48.32  Basic weighted average common shares outstanding   24,546,819   24,515,454   24,459,088  Diluted weighted average common shares outstanding   24,546,819   24,515,454   24,459,088  KEY RATIOS  Return on average assets   1.72 %   1.42 %   1.37 %  Return on average common shareholders' equity   13.33   11.21   11.77  Average common shareholders' equity to average assets   12.89   12.64   11.63  End of period tangible common equity to tangible assets(1)   12.14   11.61   10.79  Risk-based capital - Common Equity Tier 1(3)   14.71   14.21   13.48  Risk-based capital - Tier 1(3)   16.20   15.82   15.15  Risk-based capital - Total(3)   17.46   17.08   16.41  Net interest margin   3.89   3.77   3.54  Net interest margin - FTE(1)   3.90   3.78   3.54  Efficiency ratio: expense to revenue   51.01   55.40   51.77  Efficiency ratio: expense to revenue - adjusted(1)   51.31   53.01   51.60  Net charge-offs to average loans and leases   0.01   0.04   0.38  Loan and lease loss allowance to loans and leases   2.29   2.27   2.26  Nonperforming assets to loans and leases   0.63   0.46   0.34   March 31,   December 31,   September 30,   June 30,   March 31, 2025   2024   2024   2024   2024 END OF PERIOD BALANCES  Assets  $ 8,963,114  $ 8,931,938  $ 8,763,946  $ 8,878,003  $ 8,667,837 Loans and leases   6,863,393   6,854,808   6,616,100   6,652,999   6,562,772 Deposits   7,417,765   7,230,035   7,125,944   7,195,924   7,055,311 Allowance for loan and lease losses   157,470   155,540   152,324   150,067   148,024 Goodwill and intangible assets   83,895   83,897   83,902   83,907   83,912 Common shareholders' equity   1,161,459   1,111,068   1,104,253   1,043,515   1,009,886 Total equity   1,220,542   1,181,506   1,175,205   1,114,855   1,081,549 ASSET QUALITY  Loans and leases past due 90 days or more  $ 122  $ 106  $ 100  $ 185  $ 26 Nonaccrual loans and leases   40,540   30,613   30,678   20,297   22,097 Other real estate   —    460   —   —   — Repossessions   2,410   155   109   352   308 Total nonperforming assets  $ 43,072  $ 31,334  $ 30,887  $ 20,834  $ 22,431

(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)  March 31,   December 31,   September 30,   March 31,  2025   2024   2024   2024  ASSETS  Cash and due from banks  $ 87,816  $ 76,837  $ 99,900  $ 41,533  Federal funds sold and interest bearing deposits with other banks   135,003   47,989   69,461   39,381  Investment securities available-for-sale, at fair value
(amortized cost of $1,591,072, $1,650,684, $1,657,198, and $1,726,792 at March 31, 2025, December 31, 2024, September 30, 2024, and March 31, 2024, respectively)   1,501,877   1,536,299   1,563,461   1,583,244  Other investments   23,855   23,855   23,855   25,075  Mortgages held for sale   2,305   2,569   3,690   2,881  Loans and leases, net of unearned discount:  Commercial and agricultural   775,118   772,974   723,176   731,527  Renewable energy   505,413   487,266   479,947   413,662  Auto and light truck   955,945   948,435   949,473   997,465  Medium and heavy duty truck   289,837   289,623   299,208   303,799  Aircraft   1,118,099   1,123,797   1,065,801   1,104,058  Construction equipment   1,171,934   1,203,912   1,141,367   1,092,585  Commercial real estate   1,230,760   1,215,265   1,156,823   1,135,595  Residential real estate and home equity   689,101   680,071   664,581   643,856  Consumer   127,186   133,465   135,724   140,225  Total loans and leases   6,863,393   6,854,808   6,616,100   6,562,772  Allowance for loan and lease losses   (157,470 )  (155,540 )  (152,324 )  (148,024 ) Net loans and leases   6,705,923   6,699,268   6,463,776   6,414,748  Equipment owned under operating leases, net   9,864   11,483   13,011   16,691  Premises and equipment, net   54,778   53,456   48,185   45,689  Goodwill and intangible assets   83,895   83,897   83,902   83,912  Accrued income and other assets   357,798   396,285   394,705   414,683  Total assets  $ 8,963,114  $ 8,931,938  $ 8,763,946  $ 8,667,837  LIABILITIES  Deposits:  Noninterest-bearing demand  $ 1,651,479  $ 1,639,101  $ 1,635,981  $ 1,618,498  Interest-bearing deposits:  Interest-bearing demand   2,451,169   2,544,839   2,404,805   2,364,751  Savings   1,392,391   1,256,370   1,242,551   1,270,401  Time   1,922,726   1,789,725   1,842,607   1,801,661  Total interest-bearing deposits   5,766,286   5,590,934   5,489,963   5,436,813  Total deposits   7,417,765   7,230,035   7,125,944   7,055,311  Short-term borrowings:  Federal funds purchased and securities sold under agreements to repurchase   60,025   72,346   63,553   82,591  Other short-term borrowings   1,152   176,852   102,124   166,989  Total short-term borrowings   61,177   249,198   165,677   249,580  Long-term debt and mandatorily redeemable securities   41,210   39,156   39,220   39,406  Subordinated notes   58,764   58,764   58,764   58,764  Accrued expenses and other liabilities   163,656   173,279   199,136   183,227  Total liabilities   7,742,572   7,750,432   7,588,741   7,586,288  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 March 31, 2025, December 31, 2024, September 30, 2024, and March 31, 2024, respectively   436,538    436,538    436,538    436,538  Retained earnings   921,717   890,937   868,075   812,413  Cost of common stock in treasury (3,643,063, 3,685,512, 3,691,291, and 3,728,016  shares at March 31, 2025, December 31, 2024, September 30, 2024, and 
 March 31, 2024, respectively)   (128,912 )   (129,175  )   (129,134  )   129,790  )  Accumulated other comprehensive loss   (67,884 )  (87,232 )  (71,226 )  (109,275 ) Total shareholders' equity   1,161,459   1,111,068   1,104,253   1,009,886  Noncontrolling interests   59,083   70,438   70,952   71,663  Total equity   1,220,542   1,181,506   1,175,205   1,081,549  Total liabilities and equity  $ 8,963,114  $ 8,931,938  $ 8,763,946  $ 8,667,837

1st SOURCE CORPORATION  CONSOLIDATED STATEMENTS OF INCOME  (Unaudited - Dollars in thousands, except per share amounts)  Three Months Ended  March 31,   December 31,   March 31,  2025   2024   2024  Interest income:  Loans and leases  $ 113,560  $ 113,826  $ 109,202  Investment securities, taxable   8,153   7,621   6,079  Investment securities, tax-exempt   277   278   260  Other   1,314   1,425   927  Total interest income   123,304   123,150   116,468  Interest expense:  Deposits   39,846   40,221   39,744  Short-term borrowings   232   2,207   3,102  Subordinated notes   1,014   1,041   1,061  Long-term debt and mandatorily redeemable securities   1,274   315   646  Total interest expense   42,366   43,784   44,553  Net interest income   80,938   79,366   71,915  Provision for credit losses:  Provision for credit losses - loans and leases   2,112   3,904   6,595  Provision (recovery of provision) for credit losses - unfunded loan commitments   1,153   (324 )  882  Total provision for credit losses   3,265   3,580   7,477  Net interest income after provision for credit losses   77,673   75,786   64,438  Noninterest income:  Trust and wealth advisory   6,666   6,817   6,287  Service charges on deposit accounts   3,071   3,325   3,070  Debit card   4,149   4,424   4,201  Mortgage banking   853   938   950  Insurance commissions   2,440   1,702   1,776  Equipment rental   899   1,102   1,671  Losses on investment securities available-for-sale   —   (3,889 )  —  Other   5,025   4,063   4,201  Total noninterest income   23,103   18,482   22,156  Noninterest expense:  Salaries and employee benefits   32,115   31,825   29,572  Net occupancy   3,224   3,024   2,996  Furniture and equipment   1,347   1,702   1,149  Data processing   7,291   7,353   6,500  Depreciation - leased equipment   718   879   1,288  Professional fees   1,668   2,112   1,345  FDIC and other insurance   1,440   1,435   1,657  Business development and marketing   1,925   1,435   1,744  Other   3,348   4,443   2,453  Total noninterest expense   53,076   54,208   48,704  Income before income taxes   47,700   40,060   37,890  Income tax expense   10,177   8,623   8,428  Net income   37,523   31,437   29,462  Net (income) loss attributable to noncontrolling interests   (3 )  1   (7 ) Net income available to common shareholders  $ 37,520  $ 31,438  $ 29,455  Per common share:  Basic net income per common share  $ 1.52  $ 1.27  $ 1.19  Diluted net income per common share  $ 1.52  $ 1.27  $ 1.19  Basic weighted average common shares outstanding   24,546,819   24,515,454   24,459,088  Diluted weighted average common shares outstanding   24,546,819   24,515,454   24,459,088

1st SOURCE CORPORATION  DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY  INTEREST RATES AND INTEREST DIFFERENTIAL  (Unaudited - Dollars in thousands)  Three Months Ended  March 31, 2025   December 31, 2024   March 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   $ 1,488,005  $ 8,153  2.22 %  $ 1,548,340  $ 7,621  1.96 %  $ 1,576,579  $ 6,079  1.55 %  Tax exempt(1)    31,172   349  4.54 %   31,676   350  4.40 %   31,515   327  4.17 %  Mortgages held for sale    2,409   39  6.57 %   3,159   52  6.55 %   1,830   34  7.47 %  Loans and leases, net of unearned discount(1)    6,798,952   113,596  6.78 %   6,676,421   113,852  6.78 %   6,504,069   109,249  6.76 %  Other investments    114,252   1,314  4.66 %   118,468   1,425  4.79 %   68,172   927  5.47 %  Total earning assets(1)    8,434,790   123,451  5.94 %   8,378,064   123,300  5.85 %   8,182,165   116,616  5.73 %  Cash and due from banks    64,009        74,243        61,889  Allowance for loan and lease losses    (157,318)        (153,798)        (148,982)  Other assets    514,797        525,955        557,072  Total assets   $ 8,856,278       $ 8,824,464       $ 8,652,144   LIABILITIES AND SHAREHOLDERS' EQUITY  Interest-bearing deposits   $ 5,745,134  $ 39,846  2.81 %  $ 5,506,501  $ 40,221  2.91 %  $ 5,394,854  $ 39,744  2.96 %  Short-term borrowings:  Securities sold under agreements to repurchase    58,232   104  0.72 %   67,697   176  1.03 %   47,973   47  0.39 %  Other short-term borrowings    18,450   128  2.81 %   169,133   2,031  4.78 %   234,672   3,055  5.24 %  Subordinated notes    58,764   1,014  7.00 %   58,764   1,041  7.05 %   58,764   1,061  7.26 %  Long-term debt and mandatorily redeemable 
 securities    39,675   1,274  13.02 %   39,001   315  3.21 %   47,217   646  5.50 %  Total interest-bearing liabilities    5,920,255   42,366  2.90 %   5,841,096   43,784  2.98 %   5,783,480   44,553  3.10 %  Noninterest-bearing deposits    1,588,408        1,639,648        1,616,251  Other liabilities    139,379        157,383        167,759  Shareholders' equity    1,141,922        1,115,473        1,006,286  Noncontrolling interests    66,314        70,864        78,368  Total liabilities and equity   $ 8,856,278       $ 8,824,464       $ 8,652,144  Less: Fully tax-equivalent adjustments       (147)        (150)        (148)  Net interest income/margin (GAAP-derived)(1)      $ 80,938  3.89 %     $ 79,366  3.77 %     $ 71,915  3.54 %  Fully tax-equivalent adjustments       147        150        148  Net interest income/margin - FTE(1)      $ 81,085  3.90 %     $ 79,516  3.78 %     $ 72,063  3.54 %  (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  March 31,   December 31,   March 31,  2025   2024   2024  Calculation of Net Interest Margin  (A) Interest income (GAAP) $  123,304  $ 123,150  $ 116,468  Fully tax-equivalent adjustments:  (B) - Loans and leases  75   78   81  (C) - Tax exempt investment securities  72   72   67  (D) Interest income - FTE (A+B+C)  123,451   123,300   116,616  (E) Interest expense (GAAP)  42,366   43,784   44,553  (F) Net interest income (GAAP) (A-E)  80,938   79,366   71,915  (G) Net interest income - FTE (D-E)  81,085   79,516   72,063  (H) Annualization factor  4.056   3.978   4.022  (I) Total earning assets $  8,434,790  $ 8,378,064  $ 8,182,165  Net interest margin (GAAP-derived) (F*H)/I  3.89 %   3.77 %   3.54 %  Net interest margin - FTE (G*H)/I  3.90 %   3.78 %   3.54 %   Calculation of Efficiency Ratio  (F) Net interest income (GAAP) $  80,938  $ 79,366  $ 71,915  (G) Net interest income - FTE  81,085   79,516   72,063  (J) Plus: noninterest income (GAAP)  23,103   18,482   22,156  (K) Less: (gains) losses on investment securities and partnership investments  (1,427)   3,487   (1,037 ) (L) Less: depreciation - leased equipment  (718)   (879)   (1,288 ) (M) Total net revenue (GAAP) (F+J)  104,041   97,848   94,071  (N) Total net revenue - adjusted (G+J-K-L)  102,043   100,606   91,894  (O) Noninterest expense (GAAP)  53,076   54,208   48,704  (L) Less:depreciation - leased equipment  (718)   (879)   (1,288 ) (P) Noninterest expense - adjusted (O-L)  52,358   53,329   47,416  Efficiency ratio (GAAP-derived) (O/M)  51.01 %   55.40 %   51.77 %  Efficiency ratio - adjusted (P/N)  51.31 %   53.01 %   51.60 %   End of Period  March 31,   December 31,   March 31,  2025   2024   2024  Calculation of Tangible Common Equity-to-Tangible Assets Ratio  (Q) Total common shareholders' equity (GAAP) $  1,161,459  $ 1,111,068  $ 1,009,886  (R) Less: goodwill and intangible assets  (83,895)   (83,897)   (83,912)  (S) Total tangible common shareholders' equity (Q-R) $  1,077,564  $ 1,027,171  $ 925,974  (T) Total assets (GAAP)  8,963,114   8,931,938   8,667,837  (R) Less: goodwill and intangible assets  (83,895)   (83,897)   (83,912 ) (U) Total tangible assets (T-R) $  8,879,219  $ 8,848,041  $ 8,583,925  Common equity-to-assets ratio (GAAP-derived) (Q/T)  12.96 %   12.44 %   11.65 %  Tangible common equity-to-tangible assets ratio (S/U)  12.14 %   11.61 %   10.79 %    Calculation of Tangible Book Value per Common Share  (Q) Total common shareholders' equity (GAAP) $  1,161,459  $ 1,111,068  $ 1,009,886  (V) Actual common shares outstanding  24,562,611   24,520,162   24,477,658  Book value per common share (GAAP-derived) (Q/V)*1000 $  47.29  $ 45.31  $ 41.26  Tangible common book value per share (S/V)*1000 $  43.87  $ 41.89  $ 37.83

The NASDAQ Stock Market National Market Symbol: "SRCE" (CUSIP #336901 10 3)

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Brett Bauer
574-235-2000

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