1st Source Corporation

1st Source Corporation reported second-quarter GAAP earnings per share of $1.95, surpassing analyst expectations by $0.24. Revenue reached $118 million, an 8.8% increase year-over-year, exceeding estimates by $3.87 million. The allowance for loan and lease losses rose to $166.35 million as of June 30, 2026, representing 2.30% of total loans and leases, down slightly from 2.33% at March 31, 2026, and unchanged from 2.30% a year earlier. Net charge-offs for the quarter were $0.52 million, compared with $3.96 million in the prior quarter and $1.87 million in the same period last year.

1st Source Corporation has increased its annualized dividend to $1.72 per share, a 13.2% rise from last year. The South Bend-based bank currently pays a quarterly dividend of $0.43 per share, yielding 2.1%, which is above the S&P 500's 1.39% but below the Banks - Midwest industry average of 2.47%. The company has raised its dividend five times over the past five years, averaging an annual increase of 5.67%, and maintains a payout ratio of 25%. Zacks Investment Research gives the stock a Zacks Rank of 2, or Buy, and estimates fiscal 2026 earnings of $6.81 per share, representing 6.24% growth.

StockStory identifies 1st Source Corporation as a small-cap stock worth investigating, while expressing caution on USANA Health Sciences and Black Stone Minerals. 1st Source, a regional bank with a $1.87 billion market cap, stands out for its net interest margin expansion of 66.4 basis points over two years, 12.7% annual earnings per share growth over five years, and 9.4% annual tangible book value per share growth. In contrast, USANA, with a $366.9 million market cap, has seen annual sales decline 1.7% over three years and earnings per share fall 19% annually, while Black Stone Minerals, at a $2.94 billion market cap, faces a 28.1 percentage point drop in EBITDA margin over five years due to costs rising faster than revenue.

StockStory identifies 1st Source Corporation as a bank stock poised for sustainable market-beating returns, while pointing to OFG Bancorp and Washington Trust Bancorp as facing headwinds. 1st Source, with a market cap of $1.87 billion, expanded its net interest margin by 66.4 basis points over the last two years and grew annual earnings per share by 12.7% over five years, supported by share buybacks and 9.4% annual tangible book value per share growth. OFG Bancorp, valued at $2.00 billion, saw its net interest margin decline by 55.7 basis points over two years and faces an estimated 2.2% decline in net interest income over the next 12 months. Washington Trust Bancorp, with a market cap of $666.3 million, posted annual net interest income growth of just 4.3% over five years and a net interest margin of 2.3%, while its earnings per share fell by 9.6% annually over the same period.