1st Source Corporation (SRCE) Balance Sheet

The roughly $400 million of asset growth over ten quarters has been spread evenly across periods, with no step-change jump that would signal an acquisition, which is consistent with a lender adding risk-sensitive assets slowly. Investment securities of $8.7 billion represent the dominant reported asset category as of Q3 2026, up from $8.2 billion in mid-2024, so the incremental balance sheet appears weighted toward securities rather than loan-led expansion. That mix implies growth quality is conservative but also means earnings are more rate-sensitive than a purely loan-funded profile would be.

Deposits outgrowing loans by roughly a two-to-one margin in the quarter suggests the Michiana funding base remains loyal even in an elevated-rate environment, which would ordinarily pressure a regional bank's beta. Because the loan-to-deposit column is unavailable across all ten periods, the degree to which the surplus is being channeled into securities versus retained as cash cannot be verified here and warrants monitoring. If deposit growth persists above loan growth, the incremental low-cost funding should support margin stability, but it also signals that local loan demand may be the binding constraint on growth.

A provision line that ranges from zero to $7.3 million within six quarters is more consistent with CECL re-measurement and reserve releases than with a conventional charge-off cycle, which makes the recent earnings tailwind from minimal provisioning look potentially non-recurring. This volatility is consistent with the specialty lease book, where loss experience in aircraft and vocational vehicles does not track residential or standard commercial credit patterns. Asset-level delinquency, non-performing loan, and charge-off data were not included in the dataset, so the underlying trajectory of credit formation cannot be independently confirmed from these figures.

The equity-to-assets ratio has oscillated between 0.13 and 0.15 throughout the period without a meaningful drawdown, suggesting capital has been retained faster than assets have grown rather than deployed into buybacks or acquisitions. Combined with a modest ROE of 3.7% in Q3 2026 and the previously reported dividend payout near 34% of cumulative earnings, the picture is one of slow internal capital accretion. Formal CET1, Tier 1, and leverage ratios were not disclosed in the data, so the actual regulatory headroom for capital deployment remains unassessed here.

The steady upward drift in NIM alongside net interest income rising to $95.6 million suggests the specialty finance and lease portfolios are repricing favorably as lower-coupon vintages roll off. However, since cost of deposits and deposit beta are not quantified in this dataset, the durability of that spread cannot be measured directly, and the forward risk remains that the Michiana deposit base eventually reprices upward and compresses the gain. Investors should monitor whether NIM continues to climb if deposit growth decelerates, because that would be the test of whether the current trajectory is structural or rate-cycle dependent.