Regional banking company 1st Source (NASDAQ:SRCE) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 8.6% year on year to $113.1 million. Its non-GAAP profit of $1.63 per share was in line with analysts’ consensus estimates.
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1st Source (SRCE) Q1 CY2026 Highlights:
- Net Interest Income: $90.14 million vs analyst estimates of $88.67 million (11.4% year-on-year growth, 1.7% beat)
- Net Interest Margin: 4.2% vs analyst estimates of 4.1% (11.7 basis point beat)
- Revenue: $113.1 million vs analyst estimates of $112.1 million (8.6% year-on-year growth, 0.9% beat)
- Efficiency Ratio: 48.2% vs analyst estimates of 49.9% (167.7 basis point beat)
- Adjusted EPS: $1.63 vs analyst estimates of $1.63 (in line)
- Tangible Book Value per Share: $49.61 vs analyst estimates of $50.66 (13.1% year-on-year growth, 2.1% miss)
- Market Capitalization: $1.78 billion
Company Overview
Tracing its roots back to 1863 during the Civil War era, 1st Source Corporation (NASDAQ:SRCE) is a regional bank holding company that provides commercial, consumer, specialty finance, and wealth management services across Indiana, Michigan, and Florida.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Unfortunately, 1st Source’s 5.8% annualized revenue growth over the last five years was sluggish. This wasn’t a great result compared to the rest of the banking sector, but there are still things to like about 1st Source.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. 1st Source’s annualized revenue growth of 9.3% over the last two years is above its five-year trend, which is encouraging. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, 1st Source reported year-on-year revenue growth of 8.6%, and its $113.1 million of revenue exceeded Wall Street’s estimates by 0.9%.
Net interest income made up 76% of the company’s total revenue during the last five years, meaning lending operations are 1st Source’s largest source of revenue.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
1st Source’s TBVPS grew at an exceptional 9.2% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 14.5% annually over the last two years from $37.83 to $49.61 per share.
Over the next 12 months, Consensus estimates call for 1st Source’s TBVPS to grow by 12.1% to $55.59, mediocre growth rate.
Key Takeaways from 1st Source’s Q1 Results
It was encouraging to see 1st Source beat analysts’ net interest income expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS was in line and its tangible book value per share fell short of Wall Street’s estimates. Overall, this quarter was still decent. The stock remained flat at $73.90 immediately after reporting.
1st Source didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).