1st Source (SRCE) opened 2026 with Q1 revenue of US$105.9 million and basic EPS of US$1.65, alongside trailing 12 month revenue of US$426.3 million and EPS of US$6.52 that reflects 14.3% earnings growth over the year versus a 5.4% revenue growth rate. Over recent periods, revenue has moved from US$94.3 million in Q4 2024 to US$100.8 million in Q1 2025 and then to US$105.9 million in Q1 2026. Quarterly EPS has shifted from US$1.27 to US$1.52 and then to US$1.65, presenting a picture of expanding profitability supported by a trailing net profit margin of 37.4%.

See our full analysis for 1st Source.

With the latest results on the table, the next step is to see how these numbers line up with the prevailing narratives around growth, income and risk that investors have been following.

Net interest margin moves to 4.25%

• Q1 2026 net interest margin is reported at 4.25%, compared with 4.09% in Q3 2025 and 4.01% in Q2 2025, alongside trailing 12 month earnings growth of 14.3% and a net profit margin of 37.4%.
• What stands out for a bullish view is that margin and profit metrics sit together at relatively firm levels, which:
  • Aligns a higher quarterly net interest margin of 4.25% with trailing 12 month net income of US$159.3 million and EPS of US$6.52, all supported by revenue of US$426.3 million.
  • Fits with the idea of a regional bank using diversified income lines to support profitability, while the recent margin data give bulls concrete figures to point to instead of only relying on long term history.

Some investors argue this mix of firm margins and earnings growth points to a more resilient profit engine than the headline revenue growth rate alone suggests, and will want to see how that squares with a detailed bull case for the business 🐂 1st Source Bull Case.

Loan book at about US$7.1b with shifting credit mix

• Total loans sit at about US$7.1b in Q1 2026, with non performing loans at US$72.1 million versus US$40.7 million in Q1 2025 and US$30.7 million in Q4 2024.
• Bears who focus on credit and cyclical exposure see this shift in non performing loans as a key data point, because:
  • The move from US$30.7 million in Q4 2024 to US$72.1 million in Q1 2026 occurs alongside loan balances that stay around the US$6.9b to US$7.1b range, so the change is not just a function of a much larger book.
  • This supports a cautious lens on specialized and commercial lending lines, as any further change in non performing loans would feed directly into how investors think about the durability of the US$159.3 million of trailing 12 month net income.

For readers who are weighing that cautious view against the rest of the numbers, it can be helpful to see how a structured bear case lays out the credit and loan mix arguments side by side with the reported data 🐻 1st Source Bear Case.

P/E of 11x and DCF fair value gap

• The shares trade on a P/E of 11x against a peer average of 13.2x and an industry average of 11.7x, with a DCF fair value of US$128.89 compared with the current share price of US$73.11 and a cited analyst style price target level of US$76.33.
• What is interesting here is how the valuation signals connect to the profit profile, because:
  • Trailing 12 month EPS of US$6.52 and a net profit margin of 37.4% sit beside a P/E that is below both peer and industry figures, which investors may contrast with the 5.4% revenue growth rate that is described as slower than a broader US market benchmark.
  • The combination of a stated 43.3% gap between the DCF fair value of US$128.89 and the share price of US$73.11, plus a 2.35% dividend yield, frames a value and income tilt that readers can compare with their own expectations for future growth.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on 1st Source's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

The mix of firm profitability, rising non performing loans and a valuation gap gives plenty to think about, so check the data directly and decide how it fits your own thesis. To see which rewards are driving current optimism, take a closer look at the 3 key rewards.

See What Else Is Out There

Rising non performing loans alongside only 5.4% revenue growth and a loan book around US$7.1b raises questions about balance sheet resilience and credit quality.

If you want ideas that put financial strength front and center, use the solid balance sheet and fundamentals stocks screener (42 results) to quickly zero in on companies with sturdier balance sheets and cleaner risk profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.