Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 1st Source Corporation (Exact name of registrant as specified in its charter) For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-6233 (State or other jurisdiction of in ...

Core Viewpoint - 1st Source (SRCE) has shown strong stock performance, with an 8% increase over the past month and a new 52-week high of $69.57, outperforming the Zacks Finance sector and the Zacks Banks - Midwest industry [1] Financial Performance - The company has a consistent record of positive earnings surprises, having met or exceeded earnings consensus estimates in the last four quarters, with the latest EPS reported at $1.67 against a consensus of $1.62 [2] - For the current fiscal year, 1st Source is projected to achieve earnings of $6.69 per share on revenues of $461 million, reflecting a 4.37% increase in EPS and a 6.28% increase in revenues [3] - The next fiscal year forecasts earnings of $6.88 per share on revenues of $477.9 million, indicating year-over-year changes of 2.84% in EPS and 3.67% in revenues [3] Valuation Metrics - The stock currently trades at 10.3X current fiscal year EPS estimates, aligning with the peer industry average, and at 11.2X on a trailing cash flow basis, also matching the peer group's average [7] - 1st Source has a Value Score of B, a Growth Score of D, and a Momentum Score of A, resulting in a combined VGM Score of B [6] Zacks Rank - The stock holds a Zacks Rank of 2 (Buy), supported by a favorable earnings estimate revision trend, indicating potential for further gains [8]

Core Viewpoint - 1st Source (SRCE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system highlights the importance of changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to significant buying or selling activity that affects stock prices [3]. Company Performance and Outlook - The upgrade reflects an improvement in 1st Source's underlying business, suggesting that investors may respond positively by driving the stock price higher [4]. - The Zacks Consensus Estimate for 1st Source has increased by 3.4% over the past three months, with expected earnings of $6.43 per share for the fiscal year ending December 2025, indicating stability in earnings [7]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [6]. - The upgrade to Zacks Rank 2 places 1st Source in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Financial Performance - Record net income of $158.28 million for 2025, up 19.34% from 2024, with fourth quarter net income of $41.14 million, up 30.87% year-over-year [2] - Diluted net income per common share reached $6.41 for 2025, a 19.59% increase from 2024, and $1.67 for the fourth quarter, up 31.50% from the previous year [5] - Net income for the full year 2025 was $158,259, an increase of 19.4% from $132,618 in 2024 [38] - Net income available to common shareholders for Q4 2025 was $41,142,000, compared to $31,438,000 in Q4 2024, representing a 31% increase [41] Asset and Liability Management - Total assets as of December 31, 2025, were $9,070,471, an increase from $8,824,464 in Q4 2024, representing a year-over-year growth of approximately 2.8% [38] - Total liabilities decreased to $7,737,180 as of December 31, 2025, compared to $7,765,260 on September 30, 2025, showing a reduction of about 0.4% [40] - Total shareholders' equity rose to $1,274,971 as of December 31, 2025, up from $1,236,472 on September 30, 2025, reflecting an increase of approximately 3.1% [40] Income and Expense Analysis - Noninterest income for 2025 was $85.60 million, down 0.82% from 2024, primarily due to realized losses from repositioning available-for-sale investment securities [17] - Noninterest expense for 2025 was $216.84 million, an increase of 6.50% compared to 2024, driven by higher salaries and benefits [20] - Total noninterest expense for Q4 2025 was $56,557,000, an increase from $54,208,000 in Q4 2024 [41] Loan and Deposit Growth - Average loans and leases grew by $336.29 million, up 5.10% to $6.93 billion in 2025, while average deposits increased by $263.33 million, up 3.70% to $7.38 billion [5] - Net loans and leases increased to $6,884,823 as of December 31, 2025, compared to $6,803,024 on September 30, 2025, reflecting a growth of approximately 1.2% [40] - Total deposits decreased to $7,225,575 as of December 31, 2025, down from $7,409,819 on September 30, 2025, representing a decline of about 2.5% [40] Efficiency and Ratios - Return on average assets increased to 1.76% and return on average common shareholders' equity increased to 13.16% for the full year 2025, compared to 1.52% and 12.54% in 2024, respectively [3] - The efficiency ratio for Q4 2025 was 51.03%, an increase from 55.40% in Q4 2024, indicating improved operational efficiency [38] - The efficiency ratio (GAAP-derived) was 49.99% for the twelve months ended December 31, 2025, compared to 52.59% in 2024, indicating improved operational efficiency [46] Shareholder Returns - Cash dividend of $0.40 per common share approved, reflecting an 11.11% increase from the previous year [4] - Common shareholders' equity at the end of Q4 2025 was $1,261,725, up from $1,115,473 in Q4 2024, reflecting a year-over-year increase of 13.1% [38] Interest Income and Margins - Tax-equivalent net interest margin improved to 4.07% for 2025, up 43 basis points from 2024, with fourth quarter margin at 4.29%, up 51 basis points year-over-year [5] - Net interest income for Q4 2025 was $93,295, up from $79,366 in Q4 2024, reflecting a year-over-year increase of 17.6% [38] - Total interest income for Q4 2025 was $132,986,000, an increase of 7.9% from $123,150,000 in Q4 2024 [41] Nonperforming Assets - Total nonperforming assets increased to $77,378 in Q4 2025 from $63,192 in Q4 2024, representing a rise of 22.5% [39]

Core Insights - John Griffith, Executive Vice President and Chief Risk Officer of 1st Source Corporation and 1st Source Bank, will retire effective December 31, 2025, after nearly 25 years with the organization [1][2] - Griffith's tenure has been marked by his commitment to the company's mission and values, which have established a strong foundation for managing legal and regulatory risks [2] - 1st Source Corporation, the parent company of 1st Source Bank, has assets totaling $9.1 billion and operates numerous banking and financial service locations across the northern Indiana-southwestern Michigan area [4] Company Overview - 1st Source Corporation is the largest locally controlled financial institution in its region, with 78 banking centers and various specialized finance and advisory service locations [4] - The company has been dedicated to helping clients achieve security and build wealth for over 160 years [4] - Griffith holds degrees in Accounting and Law, bringing over 40 years of business and legal expertise to his role, including 15 years as a banking and financial restructuring lawyer [2]

Core Points - 1st Source Bank has announced the promotion of John Bedient to Chief Operating Officer and Dan Lifferth to Chief Administrative Officer as part of recent leadership changes [1][2][3] - The promotions are aimed at aligning responsibilities and ensuring long-term success for the bank and its parent company, 1st Source Corporation [2][3] Leadership Changes - John Bedient has been with 1st Source Bank since 1991 and has held various key roles, including overseeing strategic projects and the implementation of advanced banking technologies [3][4] - Dan Lifferth has served as Senior Vice President of Human Resources since 2015, focusing on employee engagement and leadership development initiatives [4][5] Company Overview - 1st Source Corporation, the parent company of 1st Source Bank, has assets totaling $9.1 billion and operates 78 banking centers, 18 Specialty Finance Group locations, and various other financial service offices [9] - The corporation has a long-standing commitment to helping clients achieve financial security and build wealth, with over 160 years of service in the financial industry [9]

Core Viewpoint - The article emphasizes the importance of value investing and highlights 1st Source (SRCE) as a strong candidate for value investors due to its favorable financial metrics and Zacks Rank [2][3][6] Company Analysis - 1st Source (SRCE) holds a Zacks Rank of 2 (Buy) and has received an "A" grade in the Value category, indicating it is among the strongest value stocks currently available [3] - The company's price-to-book (P/B) ratio is 1.24, which is lower than the industry average of 1.91, suggesting that SRCE is undervalued compared to its peers [4] - SRCE's P/CF ratio stands at 10.31, significantly lower than the industry average of 13.99, further indicating its potential undervaluation [5] - Over the past year, SRCE's P/B has fluctuated between 1.07 and 1.40, with a median of 1.24, while its P/CF has ranged from 8.55 to 11.36, with a median of 10.06 [4][5] Investment Outlook - The combination of SRCE's strong earnings outlook and its attractive valuation metrics positions it as a compelling value stock for investors at this time [6]

Core Viewpoint - 1st Source (SRCE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Company Performance and Outlook - The upgrade reflects an improvement in 1st Source's underlying business, suggesting that investors may respond positively by driving the stock price higher [4]. - The Zacks Consensus Estimate for 1st Source is projected at $6.43 per share for the fiscal year ending December 2025, with a 3.5% increase in estimates over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade to Zacks Rank 2 places 1st Source in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

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Core Insights - 1st Source (SRCE) reported quarterly earnings of $1.71 per share, exceeding the Zacks Consensus Estimate of $1.59 per share, and up from $1.41 per share a year ago, representing an earnings surprise of +7.55% [1] - The company achieved revenues of $110.66 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.69%, and an increase from $97.93 million year-over-year [2] - 1st Source has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.60 on revenues of $111.7 million, and for the current fiscal year, it is $6.22 on revenues of $435 million [7] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Banks - Midwest industry, to which 1st Source belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]