1st Source NASDAQ: SRCE highlighted record earnings, balance sheet growth, and leadership succession during its 2026 virtual annual shareholders meeting, where investors also approved director elections, executive pay, and several amended incentive and stock plans.
Board elections and proxy items
Executive Chairman Christopher J. Murphy III opened the meeting by introducing the four directors standing for re-election: Murphy, Timothy Ozark, Todd F. Schurz, and Andrea Short. Murphy outlined each nominee’s professional background and experience, including Ozark’s career in mezzanine lending and leasing, Schurz’s leadership in communications and media, and Short’s decades of experience at 1st Source and in banking and finance roles.
Murphy also reviewed the matters presented for shareholder vote, which included:
- Election of four directors
- Advisory approval of executive compensation
- Approval of the amended 1982 Executive Incentive Plan
- Approval of the amended Strategic Deployment Incentive Plan
- Approval of the amended 1982 Restricted Stock Award Plan
- Ratification of Forvis Mazars as the company’s accounting firm
2025 financial performance and early 2026 trends
Chief Financial Officer Brett A. Bauer described 2025 as “a fantastic year,” saying the company “continued to build a fortress-like balance sheet,” maintained “disciplined credit management,” and delivered record earnings while focusing on long-term shareholder value.
On funding, Bauer said average deposits in 2025 rose to “just over $7.3 billion,” driven primarily by savings and interest-bearing deposit growth and higher average certificate of deposit balances, reflecting customer preference for term products. He said average deposits were “modestly lower” in the first quarter of 2026, attributing the decline primarily to a deliberate reduction in brokered CD balances as part of the company’s funding strategy and a seasonal decline in public fund deposits.
Loan and lease growth also continued, Bauer said. Average loans and leases increased to “just under $6.9 billion” in 2025 and rose to “just over $7 billion” in the first quarter of 2026. Bauer attributed growth largely to commercial loans—including renewable energy lines of business—along with support from the commercial real estate category.
Credit, earnings, and capital return
On credit quality, Bauer said the company continued to maintain “appropriate levels of reserves.” He noted that non-performing assets increased in 2025 “largely due to a small number of isolated credits,” but said levels were “easily within a manageable range” relative to historical levels and remained stable into the first quarter of 2026.
Financially, Bauer reported net income increased nearly 20% in 2025 to $158 million, with diluted earnings per share rising to $6.41. He said performance was driven by disciplined pricing on loans and deposits, which supported net interest margin, and continued expense management. Bauer said return on assets improved to 1.76% and return on equity to 13.16%, adding that the company carried momentum into the first quarter of 2026.
Bauer also emphasized capital returns through buybacks and dividends. He said the company repurchased approximately 13 million of 1st Source stock in 2025 and an additional 23 million in the first quarter of 2026. On dividends, he said the company increased its annual common dividend to $1.52 per share in 2025, extending its streak to 38 consecutive years of dividend growth. Bauer added that the company had “just announced” a $0.03 increase in the quarterly dividend to $0.43 per share, which he said equates to a 7.5% increase.
Leadership transition and strategic positioning
Murphy said 2025 was “critical” for the company’s future as it transitioned leadership to CEO Andrea Short, CFO Brett Bauer, and Kevin Murphy “along with a host of strong colleagues.” He described the succession as “clean and successful” and said Short had led well since becoming CEO on Oct. 1, 2025.
In her remarks, Short said the company delivered a strong 2025 and was off to “a solid start in 2026,” noting that management had frequently discussed uncertainty in financial markets and a shifting political environment during the prior year. She said the company “prevailed with resilient operating fundamentals and prudent risk management,” and added that 1st Source remained well positioned for 2026 with “strong capital and ample liquidity,” a “diversified and growing client franchise,” and a “proven ability to manage risk through various cycles.”
Short said the company’s mission remains constant, emphasizing fundamentals such as balanced long-term growth, service, expense management, and community leadership, while also seeking “smart opportunities to innovate and improve.”
Shareholder vote results and meeting close
General Counsel and Corporate Secretary Brian Duba reported that 25,207,759 shares were eligible to vote, with 23,345,733 shares present by proxy or virtually—representing 92.61% of outstanding shares and constituting a quorum. Duba said preliminary results showed all four director nominees were elected and shareholders approved the advisory vote on executive compensation, the amended incentive and restricted stock plans, and the ratification of Forvis Mazars as independent registered public accounting firm. He said final voting results would be filed in a Form 8-K within three business days.
No shareholder questions were submitted during the meeting, Bauer said, and Murphy adjourned the session.
About 1st Source NASDAQ: SRCE
1st Source Corporation is a bank holding company headquartered in South Bend, Indiana, operating through its wholly owned subsidiary, 1st Source Bank. The company offers a full range of commercial and consumer banking products, including checking and savings accounts, business and commercial lending, residential mortgage loans, and cash management services. Its client base spans small and medium-sized businesses, agribusinesses, professional firms, and individual consumers primarily across northern Indiana and southwestern Michigan.
In addition to traditional banking services, 1st Source Corporation provides wealth management and trust services through its 1st Source Wealth Management division.
See Also
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider 1st Source, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and 1st Source wasn't on the list.
While 1st Source currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.
Get This Free Report
