1st Source Corporation reported record quarterly net income of $49.54 million for the third quarter of 2026, surpassing analyst expectations for both earnings and revenue. Performance was bolstered by net interest margin expansion and disciplined loan growth within its specialty finance portfolios, despite a $3.82 million pre-tax loss related to the strategic repositioning of available-for-sale securities.
Key Highlights
- Fully tax-equivalent net interest margin expanded to 4.28%, up 4 basis points from the previous quarter and 19 basis points year-over-year.
- Average loans and leases grew by $112.77 million, or 1.58% sequentially, led by the construction equipment, renewable energy, and truck portfolios.
- Asset quality improved significantly, with the ratio of nonperforming assets to total loans and leases falling to 0.81% from 1.01% in the prior quarter.
- Noninterest income reached $24.70 million, including $3.03 million in partnership investment gains from renewable energy tax equity investments.