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Investor Relations · Jan 22nd, 2026
FULL YEAR AND QUARTERLY HIGHLIGHTS
- Net income was a record $158.28 million for the year of 2025, up 19.34% from 2024 and was $41.14 million for the fourth quarter of 2025, down 2.73% from the previous quarter and up 30.87% from the fourth quarter of 2024. Diluted net income per common share was $6.41 for the year of 2025, up 19.59% from 2024 and was $1.67 for the fourth quarter of 2025, down 2.34% from the previous quarter and up 31.50% from the prior year’s fourth quarter. These results include $5.81 million and $8.68 million in pre-tax losses during the fourth quarter and full year, respectively, from repositioning of available-for-sale securities.
- Return on average assets increased to 1.76% and return on average common shareholders’ equity increased to 13.16% for the full year 2025 from 1.52% and 12.54%, respectively, in 2024. For the fourth quarter of 2025, return on average assets increased to 1.80% and return on average common shareholders’ equity increased to 12.94% from 1.42% and 11.21%, respectively, in the fourth quarter of 2024.
- Cash dividend of $0.40 per common share was approved, up 11.11% from the cash dividend declared a year ago.
- Average loans and leases grew $336.29 million, up 5.10% during 2025 to $6.93 billion from $6.60 billion in 2024.
- Average deposits increased $263.33 million, up 3.70% to $7.38 billion during 2025 from $7.12 billion in 2024. Average deposits, net of brokered deposits, increased $338.84 million, up 5.18% to $6.88 billion during 2025 from $6.54 billion in 2024.
- Tax-equivalent net interest margin was 4.07% for 2025, up 43 basis points from 2024 and was 4.29% for the fourth quarter of 2025, up 20 basis points from the prior quarter and up 51 basis points from the fourth quarter of 2024. Net interest recoveries had a positive 14 basis point impact on the fourth quarter 2025 tax-equivalent net interest margin compared to a positive three basis point impact during the previous quarter and the fourth quarter of 2024.
South Bend, IN — 1st Source Corporation (NASDAQ: SRCE), parent company of 1st Source Bank, today reported record net income of $158.28 million for 2025, an increase of 19.34% compared to $132.62 million earned in 2024. Fourth quarter net income was $41.14 million, an increase of 30.87% compared to $31.44 million earned in the fourth quarter of 2024. Diluted net income per common share for the year was a record $6.41, up 19.59% from the $5.36 earned a year earlier. Diluted net income per common share for the fourth quarter was $1.67, up 31.50% from the $1.27 earned in the fourth quarter of the previous year.
Return on average assets increased to 1.76% and return on average common shareholders’ equity increased to 13.16% for the full year 2025 from 1.52% and 12.54%, respectively, in 2024. For the fourth quarter of 2025, return on average assets increased to 1.80% and return on average common shareholders’ equity increased to 12.94% from 1.42% and 11.21%, respectively, in the fourth quarter of 2024. The increase in both ratios was mainly due to a larger percentage increase in net income compared to the percent increase in average assets and average common shareholders’ equity for both periods presented.
At its January 2026 meeting, the Board of Directors approved a cash dividend of $0.40 per common share, up 11.11% from the $0.36 per common share declared a year ago. The cash dividend is payable to shareholders of record on February 3, 2026, and will be paid on February 13, 2026.
Andrea G. Short, President and Chief Executive Officer, commented, “We are pleased to announce record net income for the fifth year in a row and we reached our 38th consecutive year of dividend growth. We were able to grow average loans and leases by $336.29 million or 5.10% and average deposits, net of brokered deposits, increased by $338.84 million or 5.18% from 2024. Higher rates on investment securities, relatively stable rates on loans and leases, and lower deposit and short-term borrowing rates resulted in tax-equivalent net interest margin expansion during 2025 to 4.07% from 3.64% in 2024. During the fourth quarter, we also experienced margin expansion of 20 basis points. Net interest recoveries had a positive 14 basis point impact on the fourth quarter 2025 tax-equivalent net interest margin compared to a positive three basis point impact during the previous quarter. We had net charge-offs to average loans and leases of 0.06% in 2025 compared to 0.09% in 2024. These positive income statement results were supported by a strong balance sheet. During the year, we maintained strong liquidity and upheld our historically conservative capital structure. I am extremely proud that my colleagues were able to achieve such positive results despite the unique challenges of the last several years.
“We were also delighted to learn that Chris Murphy, our Executive Chairman was honored with a 2025 Leaders in Banking Excellence Award by the Indiana Bankers Association. These awards showcase exceptional individuals who have positively impacted Indiana banks and the communities they serve. Chris’ contributions over the past 50-plus years have helped shape the Indiana banking community. He is a passionate advocate for our clients, our communities, and community banks and is a true example of what it means to be a servant leader.
“Finally, in the fourth quarter, we rolled out a new platform called Online & Mobile Banking for Business. This new suite of services allows small business owners a fast, reliable, and convenient way to manage their business accounts online. It gives them new tools to help them simplify payments, create team account access for their employees, and manage their cashflow more quickly and easily with no manual data entry. This new platform is one more way we are showing our commitment to supporting small businesses in the communities where we live and serve.” Ms. Short concluded.
Christopher J. Murphy III, Executive Chairman, added, “During the fourth quarter of 2025, we were very pleased to learn that we are in rare company to be named among Piper Sandler’s Sm-All Stars for the third year in a row. The list identifies the top performing small-cap banks and thrifts in the country. To earn this prestigious status, companies need to have a market cap below $2.5 billion and meet a range of criteria related to growth, profitability, credit quality, and capital strength.
Additionally, we were pleased to learn that 1st Source once again received a “Superior” Bauer 5-Star Rating, the highest rating by BauerFinancial. The ratings are based on several factors including capital ratio, profitability/loss trend, evaluation of the level of delinquent loans, repossessed assets, the market versus book value of the investment portfolio, the community reinvestment rating (CRA), liquidity and more.” Mr. Murphy concluded.