Executive Summary

Record quarterly net income of $42.30M and diluted EPS of $1.71, with margin expansion and lower provision driving the beat; results include $1.88M pre-tax securities losses and a $1.00M charitable contribution .
Versus S&P Global consensus, SRCE delivered a strong beat: Primary EPS actual 1.787 vs 1.597 estimate (+12%), and revenue $109.76M vs $109.36M estimate (+0.4%); GAAP “total net revenue” was $110.66M, reflecting noninterest items and FTE adjustments .*
Dividend increased to $0.40 per share (from $0.38 in Q2 and $0.36 in Q1), signaling confidence and capital strength; CET1 rose to 15.18% .
Credit quality improved from Q2 with nonperforming assets ratio down to 0.91% from 1.06% and provision falling to $0.90M; management cited resilient balance sheet, strong liquidity, and conservative capital structure .

What Went Well and What Went Wrong

Net interest margin expanded for the seventh consecutive quarter to 4.09% FTE; tax-equivalent NII rose 4.17% QoQ and 17.55% YoY on higher loan yields and lower short-term borrowing costs .
Average loans and deposits both grew QoQ and YoY; loans +0.67% QoQ and +6.20% YoY, deposits +1.02% QoQ and +4.06% YoY, supporting core earnings power .
Management emphasized resilience and long-standing disciplined financial management: “our balance sheet remained resilient... maintained strong liquidity and upheld our historically conservative capital structure” — Andrea G. Short, CEO .

Noninterest income declined QoQ (-5.0%) due to $1.88M realized losses on AFS repositioning and lower trust/wealth advisory, swap fees, and BOLI claims; equipment rental income also pressured YoY .
Noninterest expense increased QoQ (+4.47%) and YoY (+7.77%) on salaries/incentives, the $1.00M charitable contribution, collections/repossessions, debit card losses, and technology project costs .
Asset quality remains higher than last year despite improvement from Q2: NPA ratio 0.91% vs 0.47% in Q3’24; net charge-offs ticked up YoY (0.11% vs 0.05%) .

Metric	Q3 2024	Q2 2025	Q3 2025
Total Net Revenue ($USD Millions)	$97.93	$108.25	$110.66
Net Interest Income ($USD Millions)	$75.49	$85.19	$88.75
Noninterest Income ($USD Millions)	$22.45	$23.06	$21.91
Provision for Credit Losses ($USD Millions)	$1.72	$7.69	$0.90
Diluted EPS ($USD)	$1.41	$1.51	$1.71
ROA (%)	1.59%	1.67%	1.86%
ROE (%)	12.87%	12.61%	13.76%
NIM - FTE (%)	3.64%	4.01%	4.09%
Efficiency Ratio - Adjusted (%)	51.75%	48.40%	49.17%

Metric	Consensus	Actual	Surprise
Primary EPS (S&P Normalized)	1.597*	1.787*	0.190 (+12%)*
GAAP Diluted EPS	—	$1.71	—
Revenue ($USD Millions)	$109.36*	$109.76*	0.40 (+0.4%)*
Total Net Revenue (GAAP) ($USD Millions)	—	$110.66	—

Values retrieved from S&P Global.*

KPI	Q3 2024	Q2 2025	Q3 2025
Avg Loans & Leases ($USD Billions)	$6.61	$6.97	$7.02
Avg Deposits ($USD Billions)	$7.13	$7.35	$7.42
Allowance / Loans & Leases (%)	2.30%	2.30%	2.32%
Net Charge-offs / Avg Loans & Leases (%)	0.05%	0.11%	0.11%
Nonperforming Assets / Loans & Leases (%)	0.47%	1.06%	0.91%
CET1 (%)	14.18%	14.60%	15.18%

Category	Q3 2024	Q2 2025	Q3 2025
Aircraft	$1,065.80	$1,134.84	$1,095.42
Construction Equipment	$1,141.37	$1,207.21	$1,207.45
Commercial Real Estate	$1,156.82	$1,252.75	$1,244.31
Auto & Light Truck	$949.47	$972.46	$924.99
Renewable Energy	$479.95	$573.23	$603.72
Total Loans & Leases	$6,616.10	$7,097.97	$6,964.45

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Cash Dividend per Share	Q3 2025	$0.38 (Q2 2025 declared)	$0.40 (Q3 2025 declared)	Raised
Revenue/Margins/OpEx/Tax Rate	Q3 2025	Not provided	Not provided	Maintained: No formal guidance
Share Repurchases	YTD 2025	54,982 shares (Q2 YTD)	160,363 shares YTD; 105,381 in Q3	Increased activity

Note: A Q3 2025 earnings call transcript was not available in our document set; themes reflect management commentary from earnings releases.

Topic	Q1 2025 (Prior Mentions)	Q2 2025 (Prior Mentions)	Q3 2025 (Current Period)	Trend
Net Interest Margin trajectory	Fifth consecutive quarter of NIM expansion; drivers: higher securities yields, loan growth, less short-term borrowings	Sixth consecutive quarter; adds lower deposit costs	Seventh consecutive quarter; higher loan yields and lower short-term borrowing costs	Improving
Credit quality	NPAs up to 0.63%; provision moderated YoY; allowance at 2.29%	Credit challenged; NPAs rose to 1.06%, driven by one Auto & Light Truck account; provision up	Credit improved moderately; NPAs down to 0.91%; provision down sharply	Stabilizing
Capital & liquidity	Maintained conservative capital; CET1 14.71%	CET1 14.60%; strong liquidity	CET1 15.18%; emphasized resilient balance sheet	Strengthening
Operating costs/technology	Higher data processing costs; professional fees	Technology projects increased data processing costs	Elevated noninterest expense with tech projects and charitable contribution	Mixed (investment phase)
Strategic/leadership	Awards and branch renovations; community engagement	Awards (KBW Honor Roll), expansion (Carmel banking center)	CEO transition to Andrea Short; Kevin Murphy to Bank President; continued model rollouts	Positive continuity

“We achieved record quarterly net income... continued net interest margin expansion for the seventh consecutive quarter... Higher rates on increased average loan and lease balances, and lower short-term borrowing costs led to an eight basis point improvement” — Andrea G. Short, President & CEO .
“Our balance sheet remained resilient... strong liquidity and historically conservative capital structure, reinforcing our ability to drive long-term value” — Andrea G. Short .
“Successful transition of senior leadership... optimistic about our future... 1st Source Bank named to Bank Director Magazine’s Best U.S. Banks list (#19 overall)” — Christopher J. Murphy III, Executive Chairman .

Not available; no published Q3 2025 earnings call transcript was found in the document set.

Q3 2025 beat on EPS and modestly on revenue: Primary EPS 1.787 vs 1.597 consensus (+12%); revenue $109.76M vs $109.36M consensus (+0.4%); GAAP diluted EPS reported at $1.71 and GAAP total net revenue at $110.66M .*
Potential revisions: upward bias to EPS/NII driven by NIM expansion and lower provision; offset by slightly higher operating expenses tied to technology projects and one-time charitable contribution .

Values retrieved from S&P Global.*

Margin story intact: NIM rose to 4.09% FTE, with tax-equivalent NII up 4.17% QoQ and 17.55% YoY, underpinning earnings quality .
Credit improvement from Q2 reduces risk flag: NPAs fell to 0.91% (from 1.06%), provision dropped to $0.90M, and allowance remained robust at 2.32% of loans .
Capital strength supports shareholder returns: CET1 15.18%; dividend raised to $0.40; ongoing buybacks (105,381 shares in Q3; 160,363 YTD) .
Earnings quality considerations: GAAP results include $1.88M AFS securities losses (portfolio repositioning) and a $1.00M charitable contribution; ex-these, core trends remain favorable .
Growth vectors: Loan growth breadth across Renewable Energy, CRE, Construction Equipment, and Residential/Home Equity; deposit growth in savings and non-brokered time .
Cost trajectory warrants monitoring: Noninterest expense stepped up on incentives, collections/repossessions, debit card losses, and tech projects; watch efficiency ratio drift .
Narrative catalysts: Record net income, dividend increase, leadership transition with continuity, and recognized operating excellence (Best U.S. Banks list) .