1ST SOURCE CORP 10-K

Item 8. Financial Statements and Supplementary Data. Index to Consolidated Financial Statements Page Reports of Forvis Mazars, LLP, Independent Registered Public Accounting Firm ( Forvis Mazars, LLP , Fort Wayne, Indiana , Auditor Firm ID: 686 ) 40 Consolidated Statements of Financial Condition 43 Consolidated Statements of Income 44 Consolidated Statements of Comprehensive Income 45 Consolidated Statements of Shareholders’ Equity 45 Consolidated Statements of Cash Flows 46 Notes to Consolidated Financial Statements 48 40 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders, Board of Directors and Audit, Finance, and Risk Committee 1st Source Corporation South Bend, Indiana Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial condition of 1st Source Corporation (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 17, 2026, expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for Loan and Lease Losses – Qualitative Factors Description of the Critical Audit Matter As presented in Note 5 to the financial statements, the Company’s allowance for loan and lease losses (ALLL) was $161.8 million at December 31, 2025. As described in Note 1 to the financial statements, the ALLL is an estimate of current expected credit losses in the loan and lease portfolio. The determination of the ALLL requires significant judgment reflecting the Company’s estimate of expected future losses for the loan’s entire contractual term adjusted for expected payments when appropriate. The Company categorizes its loan portfolios into nine segments based on similar risk characteristics. Loans within each segment are collectively evaluated using either: 1) a cohort cumulative loss rate methodology (“cohort”) or, 2) the probability of default (“PD”)/loss given default (“LGD”) methodology (PD/LGD). For both the cohort and the PD/LGD methodologies, the Company uses qualitative adjustments to capture differences that may exist between the current and historical conditions. Qualitative factors include but are not limited to current market risk assessment by industry, recent loss experience in particular 41 Table of Contents segments of the portfolios, movement in equipment values collateralizing specialized industry portfolios, concentrations of credit risk, delinquencies, trends in volume, experience and depth of relationship managers and division management, and the effects of changes in lending policies and practices, including changes in quality of the loan and lease origination, servicing, and risk management process. We identified the qualitative factor adjustments included in the ALLL as a critical audit matter. The principal considerations for our determination included the high degree of judgment and subjectivity in auditing management’s estimation of qualitative factor adjustments, which requires significant judgment. How the Critical Audit Matter Was Addressed in the Audit The primary procedures we performed to address this critical audit matter included: • Tested the design and operating effectiveness of internal controls over the establishment of qualitative adjustments for current and expected conditions. • Evaluated the current and expected qualitative adjustments, including assessing the basis for the adjustments and the reasonableness of the significant assumptions related to loan portfolio policies and underwriting, credit quality metrics, concentrations, as well as external market data including gross domestic product, unemployment rates, and housing market trends. • Tested the completeness and accuracy and evaluated the relevance of the key data used as inputs to the qualitative adjustment estimation process, including relevant external market data, portfolio segment loan balances and other loan-specific data. /s/ Forvis Mazars, LLP We have served as the Company’s auditor since 2015. Fort Wayne, Indiana February 17, 2026 42 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders, Board of Directors and Audit, Finance, and Risk Committee 1st Source Corporation South Bend, Indiana Opinion on the Internal Control over Financial Reporting We have audited 1st Source Corporation’s (the “Company”) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) . In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework: (2013) issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2025 and 2024, and for each of the three years in the period ended December 31, 2025, and our report dated February 17, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definitions and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. /s/ Forvis Mazars, LLP Fort Wayne, Indiana February 17, 2026 43 Table of Contents CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION December 31 (Dollars in thousands) 2025 2024 ASSETS Cash and due from banks $ 69,249 $ 76,837 Federal funds sold and interest bearing deposits with other banks 50,608 47,989 Investment securities available-for-sale, at fair value (amortized cost of $ 1,568,429 and $ 1,650,684 at December 31, 2025 and 2024, respectively) 1,522,486 1,536,299 Other investments 22,140 23,855 Mortgages held for sale 4,866 2,569 Loans and leases, net of unearned discount: Commercial and agricultural 797,592 772,974 Renewable energy 652,799 487,266 Auto and light truck 887,876 948,435 Medium and heavy duty truck 269,749 289,623 Aircraft 1,086,821 1,123,797 Construction equipment 1,221,135 1,203,912 Commercial real estate 1,269,765 1,215,265 Residential real estate and home equity 740,777 680,071 Consumer 120,155 133,465 Total loans and leases 7,046,669 6,854,808 Allowance for loan and lease losses ( 161,846 ) ( 155,540 ) Net loans and leases 6,884,823 6,699,268 Equipment owned under operating leases, net 6,964 11,483 Premises and equipment, net 58,318 53,456 Goodwill and intangible assets 83,895 83,897 Accrued income and other assets 351,921 396,285 Total assets $ 9,055,270 $ 8,931,938 LIABILITIES Deposits: Noninterest-bearing demand $ 1,600,495 $ 1,639,101 Interest-bearing deposits: Interest-bearing demand 2,592,202 2,544,839 Savings 1,446,278 1,256,370 Time 1,586,600 1,789,725 Total interest-bearing deposits 5,625,080 5,590,934 Total deposits 7,225,575 7,230,035 Short-term borrowings: Federal funds purchased and securities sold under agreements to repurchase 112,470 72,346 Other short-term borrowings 126,151 176,852 Total short-term borrowings 238,621 249,198 Long-term debt and mandatorily redeemable securities 43,330 39,156 Subordinated notes 58,764 58,764 Accrued expenses and other liabilities 170,890 173,279 Total liabilities 7,737,180 7,750,432 SHAREHOLDERS’ EQUITY Preferred stock; no par value Authorized 10,000,000 shares; none issued or outstanding — — Common stock; no par value Authorized 40,000,000 shares; issued 28,205,674 shares at December 31, 2025 and 2024 436,538 436,538 Retained earnings 1,015,160 890,937 Cost of common stock in treasury ( 3,836,656 and 3,685,512 shares at December 31, 2025 and December 31, 2024, respectively) ( 141,950 ) ( 129,175 ) Accumulated other comprehensive loss ( 34,777 ) ( 87,232 ) Total shareholders’ equity 1,274,971 1,111,068 Noncontrolling interests 43,119 70,438 Total equity 1,318,090 1,181,506 Total liabilities and equity $ 9,055,270 $ 8,931,938 The accompanying notes are a part of the consolidated financial statements. 44 Table of Contents CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31 (Dollars in thousands, except per share amounts) 2025 2024 2023 Interest income: Loans and leases $ 471,013 $ 451,329 $ 387,298 Investment securities, taxable 36,360 25,720 24,501 Investment securities, tax-exempt 1,191 1,043 1,445 Other 5,830 5,925 3,663 Total interest income 514,394 484,017 416,907 Interest expense: Deposits 155,914 166,842 123,162 Short-term borrowings 1,582 8,976 7,032 Subordinated notes 4,033 4,217 4,174 Long-term debt and mandatorily redeemable securities 4,690 3,165 3,892 Total interest expense 166,219 183,200 138,260 Net interest income 348,175 300,817 278,647 Provision for credit losses 12,562 12,466 5,866 Net interest income after provision for credit losses 335,613 288,351 272,781 Noninterest income: Trust and wealth advisory 27,867 26,709 23,706 Service charges on deposit accounts 13,184 12,877 12,749 Debit card 17,774 17,785 17,980 Mortgage banking 4,103 4,210 3,471 Insurance commissions 7,700 6,730 6,911 Equipment rental 3,021 5,171 8,837 Losses on investment securities available-for-sale ( 8,679 ) ( 3,889 ) ( 2,926 ) Other 20,633 16,714 19,895 Total noninterest income 85,603 86,307 90,623 Noninterest expense: Salaries and employee benefits 129,564 121,909 115,612 Net occupancy 12,724 11,939 11,090 Furniture and equipment 6,454 5,612 5,653 Data processing 29,844 27,567 25,055 Depreciation — leased equipment 2,415 4,073 7,093 Professional fees 7,115 7,098 6,705 FDIC and other insurance 5,793 6,142 5,926 Business development and marketing 8,855 6,876 7,157 Other 14,075 12,385 17,433 Total noninterest expense 216,839 203,601 201,724 Income before income taxes 204,377 171,057 161,680 Income tax expense 46,118 38,439 36,746 Net income 158,259 132,618 124,934 Net loss (income) attributable to noncontrolling interests 18 5 ( 7 ) Net income available to common shareholders $ 158,277 $ 132,623 $ 124,927 Basic net income per common share $ 6.41 $ 5.36 $ 5.03 Diluted net income per common share $ 6.41 $ 5.36 $ 5.03 The accompanying notes are a part of the consolidated financial statements. 45 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31 (Dollars in thousands) 2025 2024 2023 Net income $ 158,259 $ 132,618 $ 124,934 Other comprehensive income (loss): Unrealized appreciation (depreciation) of investment securities available-for-sale 59,763 21,483 51,360 Reclassification adjustment for realized losses included in net income 8,679 3,889 2,926 Income tax effect ( 15,987 ) ( 6,281 ) ( 12,919 ) Other comprehensive income (loss), net of tax 52,455 19,091 41,367 Comprehensive income (loss) 210,714 151,709 166,301 Comprehensive loss (income) attributable to noncontrolling interests 18 5 ( 7 ) Comprehensive income (loss) available to common shareholders $ 210,732 $ 151,714 $ 166,294 The accompanying notes are a part of the consolidated financial statements. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY 1st Source Corporation Shareholders (Dollars in thousands, except per share amounts) Preferred Stock Common Stock Retained Earnings Cost of Common Stock in Treasury Accumulated Other Comprehensive Income (Loss), Net Total Shareholders’ Equity Noncontrolling Interests Total Equity Balance at January 1, 2023 $ — $ 436,538 $ 694,862 $ ( 119,642 ) $ ( 147,690 ) $ 864,068 $ 59,698 $ 923,766 Net income — — 124,927 — — 124,927 7 124,934 Other comprehensive income — — — — 41,367 41,367 — 41,367 Issuance of 82,840 common shares under stock based compensation awards — — 2,184 1,622 — 3,806 — 3,806 Cost of 310,522 shares of common stock acquired for treasury — — — ( 12,469 ) — ( 12,469 ) — ( 12,469 ) Common stock dividend ($ 1.30 per share) — — ( 32,131 ) — — ( 32,131 ) — ( 32,131 ) Contributions from noncontrolling interests — — — — — — 20,343 20,343 Distributions to noncontrolling interests — — — — — — ( 1,353 ) ( 1,353 ) Balance at December 31, 2023 $ — $ 436,538 $ 789,842 $ ( 130,489 ) $ ( 106,323 ) $ 989,568 $ 78,695 $ 1,068,263 Net income (loss) — — 132,623 — — 132,623 ( 5 ) 132,618 Other comprehensive income — — — — 19,091 19,091 — 19,091 Issuance of 88,555 common shares under stock based compensation awards — — 2,862 1,492 — 4,354 — 4,354 Cost of 2,997 shares of common stock acquired for treasury — — — ( 178 ) — ( 178 ) — ( 178 ) Common stock dividend ($ 1.40 per share) — — ( 34,390 ) — — ( 34,390 ) — ( 34,390 ) Distributions to noncontrolling interests — — — — — — ( 2,332 ) ( 2,332 ) Liquidation of noncontrolling interests — — — — — — ( 5,920 ) ( 5,920 ) Balance at December 31, 2024 $ — $ 436,538 $ 890,937 $ ( 129,175 ) $ ( 87,232 ) $ 1,111,068 $ 70,438 $ 1,181,506 Net income (loss) — — 158,277 — — 158,277 ( 18 ) 158,259 Other comprehensive income — — — — 52,455 52,455 — 52,455 Issuance of 78,892 common shares under stock based compensation awards — — 3,259 1,095 — 4,354 — 4,354 Cost of 230,036 shares of common stock acquired for treasury — — — ( 13,870 ) — ( 13,870 ) — ( 13,870 ) Common stock dividend ($ 1.52 per share) — — ( 37,313 ) — — ( 37,313 ) — ( 37,313 ) Distributions to noncontrolling interests — — — — — — ( 4,315 ) ( 4,315 ) Liquidation of noncontrolling interests — — — — — — ( 22,986 ) ( 22,986 ) Balance at December 31, 2025 $ — $ 436,538 $ 1,015,160 $ ( 141,950 ) $ ( 34,777 ) $ 1,274,971 $ 43,119 $ 1,318,090 The accompanying notes are a part of the consolidated financial statements. 46 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31 (Dollars in thousands) 2025 2024 2023 Operating activities: Net income $ 158,259 $ 132,618 $ 124,934 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 12,562 12,466 5,866 Depreciation of premises and equipment 5,069 4,457 4,452 Depreciation of equipment owned and leased to others 2,415 4,073 7,093 Stock-based compensation 6,198 5,655 4,891 Net (accretion) amortization of investment securities available-for-sale ( 3,117 ) 1,709 3,939 Amortization of mortgage servicing rights 767 781 845 Amortization of right of use assets 3,014 3,050 3,073 Deferred income taxes ( 5,404 ) 2,432 ( 9,462 ) Losses on investment securities available-for-sale 8,679 3,889 2,926 Originations of loans held for sale, net of principal collected ( 73,117 ) ( 62,002 ) ( 43,665 ) Proceeds from the sales of loans held for sale 72,531 61,781 47,060 Net gains on sale of loans held for sale ( 1,711 ) ( 906 ) ( 923 ) Net gains on sale of other real estate and repossessions ( 229 ) ( 214 ) ( 123 ) Change in interest receivable ( 2,749 ) ( 2,558 ) ( 5,485 ) Change in interest payable ( 11,756 ) 6,974 23,521 Change in other assets 1,908 ( 4,164 ) 4,089 Change in other liabilities 51,020 23,627 17,864 Other ( 1,222 ) 185 ( 2,959 ) Net change in operating activities 223,117 193,853 187,936 Investing activities: Proceeds from sales of investment securities available-for-sale 254,500 62,616 102,437 Proceeds from maturities and paydowns of investment securities available-for-sale 382,291 368,190 145,006 Purchases of investment securities available-for-sale ( 560,098 ) ( 324,731 ) ( 47,494 ) Net change in partnership investments ( 24,544 ) ( 34,404 ) ( 51,121 ) Net change in other investments 1,715 1,220 218 Loans sold or participated to others 64,528 119,678 49,603 Proceeds from principal payments on direct finance leases 79,451 68,806 71,044 Net change in loans and leases ( 349,945 ) ( 534,763 ) ( 628,268 ) Net change in equipment owned under operating leases 2,104 4,810 4,241 Purchases of premises and equipment ( 10,082 ) ( 12,367 ) ( 5,980 ) Proceeds from disposal of premises and equipment 254 613 142 Proceeds from sales of other real estate and repossessions 5,606 3,727 1,886 Net change in investing activities ( 154,220 ) ( 276,605 ) ( 358,286 ) Financing activities: Net change in demand deposits and savings accounts 198,665 140,415 ( 487,911 ) Net change in time deposits ( 203,125 ) 51,039 598,227 Net change in short-term borrowings ( 10,577 ) ( 63,161 ) 96,830 Payments on long-term debt ( 2,347 ) ( 12,630 ) ( 3,450 ) Stock issued under stock purchase plans 133 153 78 Acquisition of treasury stock ( 13,870 ) ( 178 ) ( 12,469 ) Net (distributions to) contributions from noncontrolling interests ( 4,315 ) ( 2,332 ) 18,990 Cash dividends paid on common stock ( 38,430 ) ( 35,396 ) ( 33,074 ) Net change in financing activities ( 73,866 ) 77,910 177,221 Net change in cash and cash equivalents ( 4,969 ) ( 4,842 ) 6,871 Cash and cash equivalents, beginning of year 124,826 129,668 122,797 Cash and cash equivalents, end of year $ 119,857 $ 124,826 $ 129,668 Supplemental Information: Non-cash transactions: Loans transferred to other real estate and repossessions $ 5,077 $ 3,452 $ 2,038 Common stock matching contribution to Employee Stock Ownership and Profit Sharing Plan 1,227 1,153 1,753 Right of use assets obtained in exchange for lease obligation 2,107 2,723 3,852 Liquidation of noncontrolling interests 22,986 5,920 — Purchases of mandatorily redeemable securities with common stock held in treasury 102 739 — Issuance of long-term debt for intangible asset acquisition 258 — — Cash paid (received) for: Interest $ 177,976 $ 176,227 $ 114,739 Income taxes ( 6,685 ) 11,281 17,799 The accompanying notes are a part of the consolidated financial statements. 47 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Accounting Policies 1st Source Corporation is a bank holding company headquartered in South Bend, Indiana that provides, through its subsidiaries (collectively referred to as “1st Source” or “the Company”), a broad array of financial products and services. 1st Source Bank (“Bank”), its banking subsidiary, offers commercial and consumer banking services, trust and wealth advisory services, and insurance to individual and business clients. The following is a summary of significant accounting policies followed in the preparation of the consolidated financial statements. Basis of Presentation — The financial statements consolidate 1st Source, its subsidiaries (principally the Bank) and any variable interest entities (“VIEs”) for which the Company has concluded it has significant involvement in and the ability to direct the activities that impact the entity’s economic performance. All significant intercompany balances and transactions have been eliminated. For purposes of the parent company only financial information presented in Note 23, investments in subsidiaries are carried at equity in the underlying net assets. Use of Estimates in the Preparation of Financial Statements — Financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Business Combinations — Business combinations are accounted for under the purchase method of accounting. Under the purchase method, assets and liabilities of the business acquired are recorded at their estimated fair values as of the date of acquisition with any excess of the cost of the acquisition over the fair value of the net tangible and intangible assets acquired recorded as goodwill. Results of operations of the acquired business are included in the income statement from the date of acquisition. Cash Flows — For purposes of the consolidated and parent company only statements of cash flows, the Company considers cash and due from banks, federal funds sold and interest bearing deposits with other banks with original maturities of three months or less as cash and cash equivalents. Securities — Securities that the Company has the ability and positive intent to hold to maturity are classified as investment securities held-to-maturity. Held-to-maturity investment securities, when present, are carried at amortized cost. As of December 31, 2025 and 2024, the Company held no securities classified as held-to-maturity. Securities that may be sold in response to, or in anticipation of, changes in interest rates and resulting prepayment risk, or for other factors, are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on debt securities are reported, net of applicable taxes, as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. Unrealized gains and losses on equity securities are reflected, net of applicable taxes, in earnings. For available-for-sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of these criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value in Other Income on the Consolidated Statements of Income. For debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, nature of the security, the underlying collateral, and the financial condition of the issuer, among other factors. If this assessment indicates a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for available-for-sale securities losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for available-for-sale securities losses is recognized in other comprehensive income. Changes in the allowance for available-for-sale securities are recorded as a component of credit loss expense. Losses are charged against the allowance for available-for-sale securities losses when management believes the uncollectibility of an available-for-sale security is confirmed or when either criteria regarding intent or requirement to sell is met. Debt and equity securities that are purchased and held principally for the purpose of selling them in the near term are classified as trading account securities and are carried at fair value with unrealized gains and losses reported in earnings. Realized gains and losses on the sales of all securities are reported in earnings and computed using the specific identification cost basis. 48 Table of Contents Other investments consist of shares of Federal Home Loan Bank of Indianapolis (FHLBI) and Federal Reserve Bank stock. As restricted member stocks, these investments are carried at cost. Both cash and stock dividends received on the stocks are reported as income. Quarterly, the Company reviews its investment in FHLBI for impairment. Factors considered in determining impairment are: history of dividend payments; determination of cause for any net loss; adequacy of capital; and review of the most recent financial statements. As of December 31, 2025 and 2024, it was determined that the Company’s investment in FHLBI stock is appropriately valued at cost, which equates to par value. In addition, other investments include interest bearing deposits with other banks with original maturities of greater than three months. These investments are in denominations, including accrued interest, that are fully insured by the FDIC. Loans and Leases — Loans are stated at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of unearned income. Interest income is accrued as earned based on unpaid principal balances. Origination fees and direct loan and lease origination costs are deferred, and the net amount amortized to interest income over the estimated life of the related loan or lease. Loan commitment fees are deferred and amortized into other income over the commitment period. Direct financing leases are carried at the aggregate of lease payments plus estimated residual value of the leased property, net of unamortized deferred lease origination fees and costs and unearned income. Only those costs incurred as a direct result of closing a lease transaction are capitalized and all initial direct costs are expensed immediately. Interest income on direct financing leases is recognized over the term of the lease to achieve a constant periodic rate of return on the outstanding investment. Accrued interest is included in Accrued Income and Other Assets on the Consolidated Statements of Financial Condition. The accrual of interest on loans and leases is discontinued when a loan or lease becomes contractually delinquent for 90 days, or when an individual analysis of a borrower’s credit worthiness indicates a credit should be placed on nonperforming status, except for residential mortgage loans and consumer loans that are well secured and in the process of collection. When interest accruals are discontinued, interest credited to income in the current year is reversed and interest accrued in the prior year is charged to the allowance for loan and lease losses. However, in some cases, the Company may elect to continue the accrual of interest when the net realizable value of collateral is sufficient to cover the principal and accrued interest. When a loan or lease is classified as nonaccrual and the future collectability of the recorded loan or lease balance is doubtful, collections on interest and principal are applied as a reduction to principal outstanding. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured, which is typically evidenced by a sustained repayment performance of at least six months . Occasionally, the Company modifies loans and leases to borrowers experiencing financial difficulty (typically denoted by internal credit quality graded “substandard” or worse) by providing term extensions, other-than-insignificant payment delays, or interest rate reductions. In some cases, multiple modifications are made to the same loan or lease. These modifications typically result from the Company’s loss mitigation activities. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance for loan and lease losses estimate or a charge-off to the allowance for loan and lease losses. The Company sells mortgage loans to the Government National Mortgage Association (GNMA) in the normal course of business and retains the servicing rights. The GNMA programs under which the loans are sold allow the Company to repurchase individual delinquent loans that meet certain criteria from the securitized loan pool. At its option, and without GNMA’s prior authorization, the Company may repurchase a delinquent loan for an amount equal to 100 % of the remaining principal balance on the loan. Once the Company has the unconditional ability to repurchase a delinquent loan, the Company is deemed to have regained effective control over the loan and the Company is required to recognize the loan on its balance sheet and record an offsetting liability, regardless of its intent to repurchase the loan. At December 31, 2025 and 2024, residential real estate portfolio loans included $ 1.15 million and $ 1.85 million, respectively, of loans available for repurchase under the GNMA optional repurchase programs with the offsetting liability recorded within Other Short-term Borrowings on the Consolidated Statements of Financial Position. Mortgage Banking Activities — Loans held for sale are composed of performing one-to-four family residential mortgage loans originated for resale. Mortgage loans originated with the intent to sell are carried at fair value. The Company recognizes the rights to service mortgage loans for others as separate assets, whether the servicing rights are acquired through a separate purchase or through the sale of originated loans with servicing rights retained. The Company allocates a portion of the total proceeds of a mortgage loan to servicing rights based on the relative fair value. These assets are amortized as reductions of mortgage servicing fee income over the estimated servicing period in proportion to the estimated servicing income to be received. The balance of MSRs is located in Accrued Income and Other Assets on the Consolidated Statements of Financial Condition and the gains and losses on the sale of MSRs are recognized in Noninterest Income on the Consolidated Statements of Income in the period in which such rights are sold. 49 Table of Contents MSRs are evaluated for impairment at each reporting date. For purposes of impairment measurement, MSRs are stratified based on the predominant risk characteristics of the underlying servicing, principally by loan type. If temporary impairment exists within a tranche, a valuation allowance is established through a charge to income equal to the amount by which the carrying value exceeds the fair value. If it is later determined all or a portion of the temporary impairment no longer exists for a particular tranche, the valuation allowance is reduced through a recovery of income. MSRs are also reviewed for permanent impairment. Permanent impairment exists when recoverability of a recorded valuation allowance is determined to be remote considering historical and projected interest rates, prepayments, and loan pay-off activity. When this situation occurs, the unrecoverable portion of the valuation allowance is applied as a direct write-down to the carrying value of the MSRs. Unlike a valuation allowance, a direct write-down permanently reduces the carrying value of the MSRs and the valuation allowance, precluding subsequent recoveries. As part of mortgage banking operations, the Company enters into commitments to originate loans whereby the interest rate on these loans is determined prior to funding (“rate lock commitments”). Similar to loans held for sale, the fair value of rate lock commitments is subject to change primarily due to changes in interest rates. Under the Company’s risk management policy, these fair values are hedged primarily by selling forward contracts on agency securities at the time the interest rate locks are issued to the customers. The rate lock commitments on mortgage loans intended to be sold and the related hedging instruments are recorded at fair value with changes in fair value recorded in current earnings. Transfers of Financial Assets — Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been legally isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets. Allowance for Credit Losses: Loans and leases — Accrued interest on loans and leases is excluded from the calculation of the allowance for credit losses due to the Company’s charge-off policy to reverse accrued interest on nonperforming loans against interest income in a timely manner. Expected credit losses on net investments in leases, including any unguaranteed residual asset, are included in the allowance for loan and lease losses. Allowance for Loan and Lease Losses — The allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio. It is the Company’s policy to maintain the allowance at a level believed to be adequate to absorb estimated credit losses within its portfolio of loans and leases. The determination of the allowance requires significant judgment to estimate credit losses measured on a collective pool basis when similar risk characteristics exist, and for loans evaluated individually. In determining the allowance, the Company estimates expected future losses for the loan’s entire contractual term adjusted for expected payments when appropriate. The allowance estimate considers relevant available information, from internal and external sources relating to the historical loss experience, current conditions, and reasonable and supportable forecasts for the Company’s outstanding loan and lease balances. The allowance is an estimation that reflects management’s evaluation of expected losses related to the Company’s financial assets measured at amortized cost. To ensure that the allowance is maintained at an adequate level, a detailed analysis is performed on a quarterly basis and an appropriate provision is made to adjust the allowance. The Company categorizes its loan portfolios into nine segments based on similar risk characteristics. Loans within each segment are collectively evaluated using either: 1) a cohort cumulative loss rate methodology (“cohort”) or, 2) the probability of default (“PD”)/loss given default (“LGD”) methodology (PD/LGD). The cohort methodology is applied to ungraded portfolios, portfolios where receipt of financial statements is generally less timely, and portfolios where there are numerous small dollar accounts that are credit scored. Loans are broken out by internal risk rating (loan grade) bands: 1-6 and 7-12 (special attention). For ungraded portfolios, there is only one pool. The cohort methodology has a steady state assumption; qualitative adjustments capture any differences that may exist between the current and historical conditions. The PD/LGD methodology is applied to graded portfolios due to the quantitative nature of the Company’s risk rating system and is consistent with the Company’s definition of risk, downgrading a credit where and when appropriate and recognizing losses in a timely manner. Loans are broken out by risk rating (loan grade) bands: 1-3, 4-6, 7-8, and 9-12. The amortized cost loan balances (rather than counts) are used for determining the transition and default probabilities. The Company uses risk rating bands as the active state to track the movement of loans through the transition matrix. The transition frequency is quarterly. Default is defined as the point at which a loan is placed on non-accrual status. In addition, a charge-off is assumed to be a default (i.e. a loan goes from accruing to charge-off, without ever being on non-accrual status). The PD is the cumulative probability of default estimated by use of a transition matrix (based on a Markov transition matrix methodology) which captures the migration of a loan from one risk rating band to another. The LGD is the ratio of loss relative to the exposure (amortized cost) at default. 50 Table of Contents The current expected credit loss methodology has a factor for reasonable and supportable forecasts. Generally, reasonable and supportable forecasts are for two years or less and have a reversion period of a similar duration, reverting expected credit losses to a level that is consistent with our historical loss experience. Forecast adjustments are added via basis points for the cohort methodology. For the PD/LGD methodology, adjustments to the probability of default factor are applied through forecast adjustments to the PD factor used as the baseline transition matrix runout, thus impacting the historical loss ratio. The Company developed its reasonable and supportable forecasts using relevant data including, but not limited to, growth in gross domestic product, unemployment rates, housing market trends, commodity prices, inflation, and other factors associated with credit losses on the financial statements. For both the cohort and the PD/LGD methodologies, the Company uses qualitative adjustments to capture differences that may exist between the current and historical conditions. Qualitative factors include but are not limited to current market risk assessment by industry, recent loss experience in particular segments of the portfolios, movement in equipment values collateralizing specialized industry portfolios, concentrations of credit risk, delinquencies, trends in volume, experience and depth of relationship managers and division management, and the effects of changes in lending policies and practices, including changes in quality of the loan and lease origination, servicing and risk management process. Loans which exhibit different risk characteristics than the pool are evaluated individually for potential credit deterioration. Loans evaluated individually are not included in the collective evaluation. These loans can be identified from a variety of sources including delinquency, non-accrual status, and complex or unusual transactions. The scope may include accruing loans that exhibit risk characteristics which differ from their pool or non-performing loans with risk characteristics dissimilar to other special attention loans in their pool. Individual reserves are determined based on an analysis of the loan’s expected future cash flows, the loan’s observable market value, or the fair value of the collateral less costs to sell. When foreclosure is probable, credit deterioration is determined based on the collateral’s fair value less costs to sell. As a practical expedient, fair value less costs to sell may be used when developing the estimate of credit losses. Similarly, for a going concern analysis, a discounted cash method may be used. Liability for Credit Losses on Unfunded Loan Commitments — The liability for credit losses on commitments to originate loans and standby letters of credit is included in Accrued Expenses and Other Liabilities on the Consolidated Statements of Financial Condition. Expected credit losses are estimated over the contractual period in which the Company is exposed to credit risk via a contractual obligation unless the obligation is unconditionally cancelable by the Company. The liability for credit losses on unfunded loan commitments is adjusted in the Provision for Credit Losses on the Consolidated Statements of Income. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated useful life. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments. Equipment Owned Under Operating Leases — As a lessor, the Company finances various types of construction equipment, medium and heavy duty trucks, automobiles and other equipment under leases classified as operating leases. The equipment underlying the operating leases is reported at cost, net of accumulated depreciation, on the Consolidated Statements of Financial Condition. These operating lease arrangements require the lessee to make a fixed monthly rental payment over a specified lease term generally ranging from three years to seven years . Revenue consists of the contractual lease payments and is recognized on a straight-line basis over the lease term and reported in Noninterest Income on the Consolidated Statements of Income. Leased assets are depreciated on a straight-line method over the lease term to the estimate of the equipment’s fair market value at lease termination, also referred to as “residual” value. The depreciation of these operating lease assets is reported in Noninterest Expense on the Consolidated Statements of Income. For automobile leases, fair value is based upon published industry market guides. For other equipment leases, fair value may be based upon observable market prices, third-party valuations, or prices received on sales of similar assets at the end of the lease term. These residual values are reviewed annually to ensure the recorded amount does not exceed the fair market value at the lease termination. At the end of the lease, the operating lease asset is either purchased by the lessee or returned to the Company. The Company is responsible for the payment of personal property taxes which is reported in Other Expense on the Consolidated Statements of Income. The lessee is responsible for reimbursing the Company for personal property taxes which is reported in Other Income on the Consolidated Statements of Income. The Company excludes sales taxes and other similar taxes from being reported as lease revenue with an associated expense. Lease Commitments — The Company leases certain banking center locations, office space, land and billboards. In determining whether a contract contains a lease, the Company examines the contract to ensure an asset was specifically identified and that the Company has control of use over the asset. To determine whether a lease is classified as operating or finance, the Company performs an economic life test on all building leases with greater than a twenty years term. Further, the Company performs a fair value test to identify any leases that have a present value of future lease payments over the lease term that is greater than 90 % of the fair value of the building. The Company only capitalizes leases with an initial lease liability of $ 2,000 or greater. 51 Table of Contents At lease inception, the Company determines the lease term by adding together the minimum lease term and all optional renewal periods that it is reasonably certain to renew. The Company determines this on each lease by considering all relevant contract-based, asset-based, market-based, and entity-based economic factors. Generally, the exercise of lease renewal options is at the Company’s sole discretion. The lease term is used to determine whether a lease is operating or finance and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. Rent expense and variable lease costs are included in Net Occupancy Expense on the Consolidated Statements of Income. Included in variable lease costs are leases with rent escalations based on recent financial indices, such as the Consumer Price Index, where the Company initially measures lease payments using the index on the commencement date and records future changes in rent payments resulting from changes in the index to variable costs in the period the changes occur. Certain leases require the Company to pay common area maintenance, real estate taxes, insurance and other operating expenses associated with the leases premises. These expenses are classified in Net Occupancy Expense on the Consolidated Statements of Income, consistent with similar costs for owned locations. There are no residual value guarantees, restrictions or covenants imposed by leases. The Company accounts for lease and nonlease components together as a single lease component by class of underlying asset. Operating lease obligations with an initial term longer than 12 months are recorded with a right of use asset and a lease liability on the Consolidated Statements of Financial Condition. The discount rate used in determining the lease liability and related right of use asset is based upon what would be obtained by the Company for similar loans as an incremental rate as of the date of origination or renewal. Other Real Estate — Other real estate acquired through partial or total satisfaction of nonperforming loans is included in Other Assets on the Consolidated Statements of Financial Condition and recorded at fair value less anticipated selling costs based upon the property’s appraised value at the date of transfer, with any difference between the fair value of the property less cost to sell, and the carrying value of the loan charged to the allowance for loan and lease losses or other income, if a positive adjustment. Subsequent fair value write-downs or write-ups, to the extent of previous write-downs, property maintenance costs, and gains or losses recognized upon the sale of other real estate are recognized in Noninterest Expense on the Consolidated Statements of Income. Gains or losses resulting from the sale of other real estate are recognized on the date of sale. As of December 31, 2025 and 2024, other real estate had carrying values of $ 0.00 million and $ 0.46 million, respectively, and is included in Other Assets on the Consolidated Statements of Financial Condition. Repossessed Assets — Repossessed assets may include fixtures and equipment, inventory and receivables, aircraft, construction equipment, and vehicles acquired from business banking and specialty finance activities. Repossessed assets are included in Other Assets on the Consolidated Statements of Financial Condition at fair value of the equipment or vehicle less estimated selling costs. At the time of repossession, the recorded amount of the loan or lease is written down to the fair value of the equipment or vehicle by a charge to the allowance for loan and lease losses or other income, if a positive adjustment. Subsequent fair value write-downs or write-ups, to the extent of previous write-downs, equipment maintenance costs, and gains or losses recognized upon the sale of repossessions are recognized in Noninterest Expense on the Consolidated Statements of Income. Gains or losses resulting from the sale of repossessed assets are recognized on the date of sale. Repossessed assets totaled $ 0.27 million and $ 0.16 million, as of December 31, 2025 and 2024, respectively, and are included in Other Assets on the Consolidated Statements of Financial Condition. Premises and Equipment — Premises and equipment are stated at cost, less accumulated depreciation and amortization. The provision for depreciation is computed by the straight-line method, primarily with useful lives ranging from three years to 31.5 years. Maintenance and repairs are charged to expense as incurred, while improvements, which extend the useful life, are capitalized and depreciated over the estimated remaining life. Goodwill and Intangibles — Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired. Other intangible assets represent purchased assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset, or liability. Goodwill is reviewed for impairment at least annually or on an interim basis if an event occurs or circumstances change that would more likely than not reduce the carrying amount. Goodwill is allocated into two reporting units. Fair value for each reporting unit is estimated using stock price multiples or earnings before interest, tax, depreciation and amortization (EBITDA) multiples. Intangible assets that have finite lives are amortized over their estimated useful lives and are subject to impairment testing. All of the Company’s other intangible assets have finite lives and are amortized on a straight-line basis over varying periods not exceeding twenty-five years . The Company performed the required annual impairment test of goodwill during the fourth quarter of 2025 and determined that no impairment exists. 52 Table of Contents Bank-Owned Life Insurance (BOLI) — The Company maintains BOLI on certain executives. BOLI balances are recorded at their cash surrender values and are included in Other Assets on the Consolidated Statements of Financial Condition. Changes in the cash surrender values are included in Other Noninterest Income on the Consolidated Statements of Income. At December 31, 2025 and 2024, BOLI totaled $ 88.36 million and $ 86.40 million, respectively. Partnership Investments — The Company accounts for its investments in partnerships for which it owns less than fifty percent and has the ability to exercise significant influence over the partnership on the equity method. The Company accounts for its investments in partnerships for which it does not have the ability to exercise significant influence at fair value less impairment, if any, or cost less any impairment if the fair value is not readily determinable. The Company has elected to use the practical expedient to estimate fair value of an investment in an investment company using the net asset value of its partnership interest. The Company uses the hypothetical liquidation book value (HLBV) method for equity investments when the liquidation rights and priorities as defined by an equity investment agreement differ from what is reflected by the underlying percentage ownership interests. The HLBV method is commonly applied to equity investments in the renewable energy industry, where the economic benefits corresponding to an equity investment may vary at different points in time and/or are not directly linked to an investor’s ownership percentage. A calculation is prepared at each balance sheet date to determine the amount that the Company would receive if an equity investment entity were to liquidate all of its assets (as valued in accordance with GAAP) and distribute that cash to the investors based on the contractually defined liquidation priorities. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is 1st Source’s share of the earnings or losses from the equity investment for the period. Investments in partnerships are included in Other Assets on the Consolidated Statements of Financial Condition. The balances as of December 31, 2025 and 2024 were $ 120.26 million and $ 140.24 million, respectively. Short-Term Borrowings — Short-term borrowings consist of Federal funds purchased, securities sold under agreements to repurchase, commercial paper, Federal Home Loan Bank advances, borrowings from the Federal Reserve, and borrowings from non-affiliated banks. Federal funds purchased, securities sold under agreements to repurchase, and other short-term borrowings mature within one day to 365 days of the transaction date. Commercial paper matures within seven days to 270 days. Other short-term borrowings on the Consolidated Statements of Financial Condition include the Company’s liability related to mortgage loans available for repurchase under GNMA optional repurchase programs. Securities purchased under agreements to resell and securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at the amounts at which the securities were acquired or sold plus accrued interest. The fair value of collateral either received from or provided to a third-party is continually monitored and additional collateral obtained or requested to be returned to the Company as deemed appropriate. Revenue Recognition — The Company recognizes revenues as they are earned based on contractual terms, as transactions occur, or as services are provided and collectability is reasonably assured. The Company’s principal source of revenue is interest income from loans and leases and investment securities. The Company also earns noninterest income from various banking and financial services offered primarily through 1st Source Bank and its subsidiaries. Interest Income — The largest source of revenue for the Company is interest income which is primarily recognized on an accrual basis according to nondiscretionary formulas in written contracts, such as loan and lease agreements or investment securities contracts. Noninterest Income — The Company earns noninterest income through a variety of financial and transaction services provided to corporate and consumer clients such as trust and wealth advisory, deposit account, debit card, mortgage banking, insurance, and equipment rental services. Revenue is recorded for noninterest income based on the contractual terms for the service or transaction performed. In certain circumstances, noninterest income is reported net of associated expenses. Trust and Wealth Advisory Fees — Trust and wealth advisory fees are recognized on the accrual basis. Income Taxes — 1st Source and its subsidiaries file a consolidated Federal income tax return. The provision for income taxes is based upon income in the consolidated financial statements, rather than amounts reported on the income tax return. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, the Company believes it is more likely than not that all of the deferred tax assets will be realized. 53 Table of Contents The Company uses the deferral method of accounting on investments that generate investment tax credits. Under this method, the investment tax credits are recognized as a reduction to the related asset. The expense on certain qualified affordable housing investments is included in Income Tax Expense on the Consolidated Statements of Income. Positions taken in the tax returns may be subject to challenge by the taxing authorities upon examination. Uncertain tax positions are initially recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than 50 % likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts. The Company provides for interest and, in some cases, penalties on tax positions that may be challenged by the taxing authorities. Interest expense is recognized beginning in the first period that such interest would begin accruing. Penalties are recognized in the period that the Company claims the position in the tax return. Interest and penalties on income tax uncertainties are classified within Income Tax Expense on the Consolidated Statements of Income. Treasury Stock — Common shares repurchased are recorded at cost. Cost of shares retired or reissued is determined using the first-in, first-out method. Net Income Per Common Share — Earnings per share is computed using the two-class method. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding, excluding participating securities. Diluted earnings per common share is computed by using the weighted-average number of shares determined for the basic earnings per share calculation plus the dilutive effect of stock compensation using the treasure stock method. Stock-Based Employee Compensation — The Company recognizes stock-based compensation as compensation cost on the Consolidated Statements of Income based on their fair values on the measurement date, which, for its purposes, is the date of grant. The Company recognizes forfeitures as they occur. Segment Information — 1st Source has one principal business segment, commercial banking. While our chief operating decision maker monitors the revenue streams of various products and services, the identifiable segments’ operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, all of the Company’s financial service operations are considered to be aggregated in one reportable operating segment. See Note 22 for additional information on segment information. Derivative Financial Instruments — The Company occasionally enters into derivative financial instruments as part of its interest rate risk management strategies. These derivative financial instruments consist primarily of interest rate swaps. All derivative instruments are recorded on the Consolidated Statements of Financial Condition, as either an asset or liability, at their fair value. The accounting for the gain or loss resulting from the change in fair value depends on the intended use of the derivative. For a derivative used to hedge changes in fair value of a recognized asset or liability, or an unrecognized firm commitment, the gain or loss on the derivative will be recognized in earnings together with the offsetting loss or gain on the hedged item. This results in an earnings impact only to the extent that the hedge is ineffective in achieving offsetting changes in fair value. If it is determined that the derivative instrument is not highly effective as a hedge, hedge accounting is discontinued and the adjustment to fair value of the derivative instrument is recorded in earnings. For a derivative used to hedge changes in cash flows associated with forecasted transactions, the gain or loss on the effective portion of the derivative will be deferred, and reported as accumulated other comprehensive income, a component of shareholders’ equity, until such time the hedged transaction affects earnings. For derivative instruments not accounted for as hedges, changes in fair value are recognized in noninterest income/expense on the Consolidated Statements of Income. Deferred gains and losses from derivatives that are terminated and were in a cash flow hedge are amortized over the shorter of the original remaining term of the derivative or the remaining life of the underlying asset or liability. Fair Value Measurements — The Company records certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Securities available for sale, mortgage loans held for sale, and derivative instruments are carried at fair value on a recurring basis. Fair value measurements are also utilized to determine the initial value of certain assets and liabilities, to perform impairment assessments, and for disclosure purposes. The Company uses quoted market prices and observable inputs to the maximum extent possible when measuring fair value. In the absence of quoted market prices, various valuation techniques are utilized to measure fair value. When possible, observable market data for identical or similar financial instruments are used in the valuation. When market data is not available, fair value is determined using valuation models that incorporate management’s estimates of the assumptions a market participant would use in pricing the asset or liability. Fair value measurements are classified within one of three levels based on the observability of the inputs used to determine fair value, as follows: Level 1 — The valuation is based on quoted prices in active markets for identical instruments. 54 Table of Contents Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3 — The valuation is based on unobservable inputs that are supported by minimal or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar techniques that incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument, or valuations that require significant management judgment or estimation . Note 2 — Recent Accounting Pronouncements Codification Improvements: In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-12 “ Codification Improvements. ” These amendments update the FASB Accounting Standards Codification for a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The amendments in the ASU, which addresses 33 issues, affect a wide variety of Topics in the Codification and apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted in both interim and annual periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this ASU in an interim period, it must adopt them as of the beginning of the annual period that includes that interim period. An entity may elect to early adopt the amendments on an issue-by-issue basis. The Company is assessing ASU 2025-12 and its impact on its accounting and disclosures. Interim Reporting: In December 2025, the FASB issued ASU No. 2025-11 “ Interim Reporting (Topic 270): Narrow-Scope Improvements. ” This ASU does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The amendments in this ASU (1) clarify that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with generally accepted accounting principles (GAAP); (2) create a comprehensive list in FASB Accounting Standards Codification® Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP; (3) incorporate a disclosure principle, which is modeled after previous Securities and Exchange Commission (SEC) guidance, that requires entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity; and (4) improve guidance about information included in and the format of interim financial statements. The amendments in this ASU are effective for pubic business entities for interim periods within annual periods beginning after December 15, 2027, and for entities other than public business entities the amendments are effective for interim periods within annual periods beginning after December 15, 2028. Early adoption is permitted for all entities. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is assessing ASU 2025-11 and its impact on its accounting and disclosures. Financial Instruments: In July 2025, the FASB issued ASU No. 2025-05 “ Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ” The amendments provide (1) all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets and (2) entities other than public business entities with an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. This ASU is effective for fiscal years including interim periods within those fiscal years, beginning after December 15, 2025. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. An entity should apply ASU No. 2025-05 prospectively to estimates of expected credit losses on asset balances described in ASC paragraph 326-20-30-10A performed after the date of adoption. The Company adopted ASU 2025-05 on January 1, 2026 and it did not have a material impact on its accounting and disclosures. Debt: In November 2024, the FASB issued ASU No. 2024-04 “ Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversion of Convertible Debt Issuances. ” These amendments clarify the requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This guidance is effective for all entities for fiscal years including interim periods within those fiscal years, beginning after December 15, 2025. Early adoption is permitted in any interim period. The Company adopted ASU 2024-04 on January 1, 2026 and it did not have a material impact on its accounting and disclosures. Income Statement: In November 2024, the FASB issued ASU No. 2024-03 “ Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ” These amendments require public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. Specifically, they will be required to: 55 Table of Contents • Disclose the amounts of (a) purchases of inventory; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. • Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements. • Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. • Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. In January 2025, the FASB issued ASU No. 2025-01 clarifying the effective date for public business entities for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is assessing ASU 2024-03 and its impact on its accounting and disclosures. Income Taxes: In December 2023, the FASB issued ASU No. 2023-09 “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ” Among other things, these amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate.) The amendments also require that all entities disclose on an annual basis the following information about income taxes paid: (1) the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and (2) the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net of refunds received.) This guidance is effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company adopted ASU 2023-09 on January 1, 2025 on a retrospective basis and it did not have a material impact on its accounting and disclosures. Note 3 — Investment Securities Available-For-Sale The following table shows investment securities available-for-sale. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2025 U.S. Treasury and Federal agencies securities $ 697,652 $ 3,171 $ ( 4,046 ) $ 696,777 U.S. States and political subdivisions securities 113,126 1,333 ( 1,396 ) 113,063 Mortgage-backed securities - Federal agencies 757,151 3,372 ( 48,380 ) 712,143 Corporate debt securities 500 3 — 503 Total debt securities available-for-sale $ 1,568,429 $ 7,879 $ ( 53,822 ) $ 1,522,486 December 31, 2024 U.S. Treasury and Federal agencies securities $ 786,417 $ 24 $ ( 28,692 ) $ 757,749 U.S. States and political subdivisions securities 86,305 33 ( 3,706 ) 82,632 Mortgage-backed securities - Federal agencies 777,962 192 ( 82,236 ) 695,918 Total debt securities available-for-sale $ 1,650,684 $ 249 $ ( 114,634 ) $ 1,536,299 Amortized cost excludes accrued interest receivable which is included in Accrued Income and Other Assets on the Consolidated Statements of Financial Condition. At December 31, 2025 and 2024, accrued interest receivable on investment securities available for sale was $ 8.04 million and $ 4.68 million, respectively. At December 31, 2025 and 2024, the residential mortgage-backed securities held by the Company consisted primarily of GNMA, FNMA and FHLMC pass-through certificates which are guaranteed by those respective agencies of the United States government (Government Sponsored Enterprise, GSEs). The Company did not hold any marketable equity securities at December 31, 2025 and 2024. 56 Table of Contents The following table shows the contractual maturities of investments in debt securities available-for-sale at December 31, 2025. Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 71,379 $ 70,617 Due after one year through five years 625,957 624,721 Due after five years through ten years 99,513 100,365 Due after ten years 14,429 14,640 Mortgage-backed securities 757,151 712,143 Total debt securities available-for-sale $ 1,568,429 $ 1,522,486 The following table summarizes gross unrealized losses and fair value by investment category and age. At December 31, 2025, the Company’s available-for-sale securities portfolio consisted of 638 securities, 438 of which were in an unrealized loss position. Less than 12 Months 12 months or Longer Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2025 U.S. Treasury and Federal agencies securities $ 146,252 $ ( 300 ) $ 173,152 $ ( 3,746 ) $ 319,404 $ ( 4,046 ) U.S. States and political subdivisions securities 13,587 ( 81 ) 29,532 ( 1,315 ) 43,119 ( 1,396 ) Mortgage-backed securities - Federal agencies 75,414 ( 355 ) 415,247 ( 48,025 ) 490,661 ( 48,380 ) Total debt securities available-for-sale $ 235,253 $ ( 736 ) $ 617,931 $ ( 53,086 ) $ 853,184 $ ( 53,822 ) December 31, 2024 U.S. Treasury and Federal agencies securities $ 103,621 $ ( 1,324 ) $ 644,614 $ ( 27,368 ) $ 748,235 $ ( 28,692 ) U.S. States and political subdivisions securities 37,017 ( 670 ) 39,280 ( 3,036 ) 76,297 ( 3,706 ) Mortgage-backed securities - Federal agencies 191,779 ( 3,355 ) 466,204 ( 78,881 ) 657,983 ( 82,236 ) Total debt securities available-for-sale $ 332,417 $ ( 5,349 ) $ 1,150,098 $ ( 109,285 ) $ 1,482,515 $ ( 114,634 ) The Company does not consider available-for-sale securities with unrealized losses at December 31, 2025 to be experiencing credit losses and recognized no resulting allowance for credit losses. The Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost basis, which may be the maturity dates of the securities. The unrealized losses occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase. The following table shows the proceeds from sales of available-for-sale debt securities and the gross realized gains and gross realized losses that have been included in earnings as a result of these sales. Realized gains and losses of all securities are computed using the specific identification cost basis. (Dollars in thousands) 2025 2024 2023 Proceeds from sales $ 254,500 $ 62,616 $ 102,437 Gross realized gains — — 733 Gross realized losses ( 8,679 ) ( 3,889 ) ( 3,659 ) At December 31, 2025 and 2024, investment securities with carrying values of $ 237.34 million and $ 359.10 million, respectively, were pledged as collateral for security repurchase agreements and for other purposes. Note 4 — Loan and Lease Financings Total loans and leases outstanding were recorded net of unearned income and deferred loan fees and costs at December 31, 2025 and 2024, and totaled $ 7.05 billion and $ 6.85 billion, respectively. At December 31, 2025 and 2024, net deferred loan and lease (fees) costs were $( 0.79 ) million and $ 1.43 million, respectively. Accrued interest receivable on loans and leases at December 31, 2025 and 2024 was $ 27.43 million and $ 28.02 million, respectively. 57 Table of Contents In the ordinary course of business, the Company has extended loans to certain directors, executive officers, and principal shareholders of equity securities of 1st Source and to their affiliates. In the opinion of management, these loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the Company and did not involve more than the normal risk of collectability, or present other unfavorable features. The loans are consistent with sound banking practices and within applicable regulatory and lending limitations. The aggregate dollar amounts of these loans were $ 30.42 million and $ 23.13 million at December 31, 2025 and 2024, respectively. During 2025, $ 20.38 million of new loans and other additions were made and $ 13.09 million of repayments and other reductions occurred. During 2024, $ 19.86 million of new loans and other additions were made and $ 4.47 million of repayments and other reductions occurred. The Company evaluates loans and leases, except residential real estate and home equity loans and consumer loans, for credit quality at least annually but more frequently if certain circumstances occur (such as material new information which becomes available and indicates a potential change in credit risk). The Company uses two methods to assess credit risk: loan or lease credit quality grades and credit risk classifications. The purpose of the loan or lease credit quality grade is to document the degree of risk associated with individual credits as well as inform management of the degree of risk in the portfolio taken as a whole. Credit risk classifications are used to categorize loans by degree of risk and to designate individual or committee approval authorities for higher risk credits at the time of origination. Credit risk classifications include categories for: Acceptable, Marginal, Special Attention, Special Risk, Restricted by Policy, Regulated and Prohibited by Law. All loans and leases, except residential real estate and home equity loans and consumer loans, are assigned credit quality grades on a scale from 1 to 12 with grade 1 representing superior credit quality. The criteria used to assign grades to extensions of credit that exhibit potential problems or well-defined weaknesses are primarily based upon the degree of risk and the likelihood of orderly repayment, and their effect on the Company’s safety and soundness. Loans or leases graded 7 or weaker are considered “special attention” credits and, as such, undergo enhanced monitoring on a quarterly basis. Grade 7 credits are defined as “watch” and contain greater than average credit risk and are monitored to limit the Company’s exposure to increased risk; grade 8 credits are “special mention” and, following regulatory guidelines, are defined as having potential weaknesses that deserve management’s close attention. Credits that exhibit well-defined weaknesses and a distinct possibility of loss are considered ‘‘classified’’ and are graded 9 through 12 corresponding to the regulatory definitions of “substandard” (grades 9 and 10) and the more severe ‘‘doubtful’’ (grade 11) and ‘‘loss’’ (grade 12). For residential real estate and home equity and consumer loans, credit quality is based on the aging status of the loan and by payment activity. Nonperforming loans are those loans which are on nonaccrual status or are 90 or more past due. Below is a summary of the Company’s loan and lease portfolio segments and a discussion of the risk characteristics relevant to each portfolio segment. Commercial and agricultural – loans are to entities within the Company’s local market communities. Loans are for business or agri-business purposes and include working capital lines of credit secured by accounts receivable and inventory that are generally renewable annually and term loans secured by equipment with amortizations based on the expected life of the underlying collateral, generally three to seven years . These loans are typically further supported by personal guarantees. Commercial exposure is to a wide range of industries and services. Risks in this sector are also varied and are most impacted by general economic conditions. Risk mitigants include appropriate underwriting and monitoring and, when appropriate, government guarantees, including SBA and FSA. Renewable energy – loans are for the purpose of financing primarily solar related projects and may include construction draw notes, operating loans, letters of credit and may entail a tax equity structure. The Company’s core focus is solar financing, but its lending activities may also include a limited amount of battery storage projects or other alternative energy resources. Collateral in a multi-state area includes tangible assets of the borrower, assignment of intangible assets including power purchase agreements, and pledges of permits and licenses. Financing is provided to qualified borrowers throughout the continental United States with an emphasis on the region east of the Rocky Mountains. Auto and light truck – loans are secured by vehicles and borrowers are nationwide. The portfolio consists of multiple industries: auto rental, auto leasing and a small specialty vehicle segment which the Company is largely exiting. Borrowers in the auto rental segment are primarily independent auto rental entities with on-airport and off-airport locations, and some insurance replacement business. Loan terms are relatively short, generally eighteen months , but up to four years . Auto leasing customers lease to businesses and the Company takes assignment of the lease stream and places its lien on the vehicles. Terms are generally longer than the auto rental sector, three to seven years and match the underlying leases. Risks include economic risks and collateral risks, principally used vehicle values. Medium and heavy duty truck – loans and full-service truck leases are secured by heavy-duty trucks, commonly Class 8 trucks and trailers, and are generally personally guaranteed. In addition to economic risks, collateral risk is significant. Financing is generally at full cost, plus additional expenditures to get the vehicle operational, such as taxes, insurance and fees. It takes three to four years of debt amortization to reach an equity position in the collateral. 58 Table of Contents Aircraft – loans are to domestic and foreign borrowers with the domestic segment further divided into two pools: 1) personal and business use, and 2) dealers and operators. The Company’s focus for the foreign sector is Latin America, principally Mexico and Brazil. Loans are primarily secured by new and used business jets and helicopters, with appropriate advances, amortizations of ten to fifteen years , and are generally guaranteed by individuals. The most significant risk in the Aircraft portfolio is collateral risk - volatility in underlying values and maintenance concerns. The portfolio is subject to national and global economic risks. Construction equipment – loans are to borrowers throughout the country secured by specific equipment. The borrowers include highway and road builders, asphalt producers and pavers, suppliers of aggregate products, site developers, frac sand operations, general construction equipment dealers and operators, and crane rental entities. Generally, loans include personal guarantees. The construction equipment industry is heavily dependent on the U.S. economy and the global economy. Market growth is reliant on investments from public and private sectors into urbanization and infrastructure projects. Commercial real estate – loans are generally to entities within the local market communities served by the Company with advances generally within regulatory guidelines. Historically, the Company’s exposure to commercial real estate has been primarily to the less risky owner-occupied segment, although growth has occurred in the non-owner-occupied segment of this portfolio over the last several years. The non-owner-occupied segment includes hotels, apartment complexes and warehousing facilities. There is generally limited exposure to construction loans although at present, construction exposures are comparably higher than previous periods. Many commercial real estate loans carry personal guarantees. Additional risks in the commercial real estate portfolio include interest rate risk, geographical concentration in northern Indiana and southwest Michigan, and general economic conditions. Residential real estate and home equity – loans predominantly include one-to-four family mortgages to borrowers in the Company’s local market communities and are appropriately underwritten and secured by residential real estate. Consumer – loans are to individuals in the Company’s local markets and auto loans are generally secured by personal vehicles and appropriately underwritten. 59 Table of Contents The following table shows the amortized cost of loans and leases, segregated by portfolio segment, credit quality rating and year of origination as of December 31, 2025. Term Loans and Leases by Origination Year (Dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Total Commercial and agricultural Grades 1-6 $ 166,469 $ 91,665 $ 71,108 $ 47,491 $ 21,408 $ 15,469 $ 342,362 $ — $ 755,972 Grades 7-12 2,409 555 4,287 1,583 1,503 2,035 29,248 — 41,620 Total commercial and agricultural 168,878 92,220 75,395 49,074 22,911 17,504 371,610 — 797,592 Current period gross charge-offs 220 32 171 198 9 — 1,790 — 2,420 Renewable energy Grades 1-6 326,861 94,730 82,739 23,454 57,332 67,683 — — 652,799 Grades 7-12 — — — — — — — — — Total renewable energy 326,861 94,730 82,739 23,454 57,332 67,683 — — 652,799 Current period gross charge-offs — — — — — — — — — Auto and light truck Grades 1-6 438,559 206,382 96,058 38,777 9,475 5,038 — — 794,289 Grades 7-12 7,296 35,446 49,032 1,611 5 197 — — 93,587 Total auto and light truck 445,855 241,828 145,090 40,388 9,480 5,235 — — 887,876 Current period gross charge-offs — 2,010 129 226 1 — — — 2,366 Medium and heavy duty truck Grades 1-6 90,318 60,465 47,654 44,315 10,101 3,478 — 481 256,812 Grades 7-12 284 — 4,729 5,495 2,360 69 — — 12,937 Total medium and heavy duty truck 90,602 60,465 52,383 49,810 12,461 3,547 — 481 269,749 Current period gross charge-offs — — — — — — — — — Aircraft Grades 1-6 356,020 211,086 141,743 201,381 112,448 31,204 6,550 — 1,060,432 Grades 7-12 5,063 4,722 4,946 8,141 — 3,517 — — 26,389 Total aircraft 361,083 215,808 146,689 209,522 112,448 34,721 6,550 — 1,086,821 Current period gross charge-offs — — 485 — — — — — 485 Construction equipment Grades 1-6 468,572 340,807 203,162 103,306 24,023 14,702 34,925 1,437 1,190,934 Grades 7-12 2,771 5,094 3,734 8,397 912 9,293 — — 30,201 Total construction equipment 471,343 345,901 206,896 111,703 24,935 23,995 34,925 1,437 1,221,135 Current period gross charge-offs — 201 1,206 — — — — — 1,407 Commercial real estate Grades 1-6 242,722 253,670 275,286 197,066 109,679 157,033 56 — 1,235,512 Grades 7-12 812 13,256 9,897 4,643 3,748 1,897 — — 34,253 Total commercial real estate 243,534 266,926 285,183 201,709 113,427 158,930 56 — 1,269,765 Current period gross charge-offs — 5 17 — — 5 — — 27 Residential real estate and home equity Performing 96,957 71,597 54,957 82,427 72,962 141,902 207,536 8,334 736,672 Nonperforming 209 146 549 839 340 72 1,870 80 4,105 Total residential real estate and home equity 97,166 71,743 55,506 83,266 73,302 141,974 209,406 8,414 740,777 Current period gross charge-offs — — — 13 — 5 50 6 74 Consumer Performing 38,401 26,781 18,328 13,858 3,837 1,142 17,068 — 119,415 Nonperforming 70 34 294 195 106 41 — — 740 Total consumer 38,471 26,815 18,622 14,053 3,943 1,183 17,068 — 120,155 Current period gross charge-offs $ 621 $ 287 $ 282 $ 239 $ 52 $ 10 $ 30 $ — $ 1,521 60 Table of Contents The following table shows the amortized cost of loans and leases, segregated by portfolio segment, credit quality rating and year of origination as of December 31, 2024. Term Loans and Leases by Origination Year (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total Commercial and agricultural Grades 1-6 $ 136,888 $ 115,508 $ 66,696 $ 36,315 $ 19,677 $ 18,369 $ 331,282 $ — $ 724,735 Grades 7-12 438 4,079 7,769 2,426 194 2,325 31,008 — 48,239 Total commercial and agricultural 137,326 119,587 74,465 38,741 19,871 20,694 362,290 — 772,974 Current period gross charge-offs — 276 117 550 — — 8,882 — 9,825 Renewable energy Grades 1-6 150,951 145,126 22,110 70,606 22,329 76,144 — — 487,266 Grades 7-12 — — — — — — — — — Total renewable energy 150,951 145,126 22,110 70,606 22,329 76,144 — — 487,266 Current period gross charge-offs — — — — — — — — — Auto and light truck Grades 1-6 443,033 276,295 106,199 25,535 10,018 6,677 — — 867,757 Grades 7-12 26,131 48,319 4,754 99 1,210 165 — — 80,678 Total auto and light truck 469,164 324,614 110,953 25,634 11,228 6,842 — — 948,435 Current period gross charge-offs — 165 448 6 — 111 — — 730 Medium and heavy duty truck Grades 1-6 88,395 72,816 81,238 25,726 11,298 5,493 — — 284,966 Grades 7-12 — 1,524 1,623 690 — 13 — 807 4,657 Total medium and heavy duty truck 88,395 74,340 82,861 26,416 11,298 5,506 — 807 289,623 Current period gross charge-offs — — — — — — — — — Aircraft Grades 1-6 347,099 190,776 285,677 151,194 82,208 32,326 7,773 — 1,097,053 Grades 7-12 2,882 7,704 10,920 1,846 3,392 — — — 26,744 Total aircraft 349,981 198,480 296,597 153,040 85,600 32,326 7,773 — 1,123,797 Current period gross charge-offs — — — 15 — 53 — — 68 Construction equipment Grades 1-6 488,870 325,443 208,114 70,258 33,095 10,890 25,916 1,966 1,164,552 Grades 7-12 2,716 10,650 11,686 1,679 12,629 — — — 39,360 Total construction equipment 491,586 336,093 219,800 71,937 45,724 10,890 25,916 1,966 1,203,912 Current period gross charge-offs 46 989 390 267 — — — — 1,692 Commercial real estate Grades 1-6 258,988 303,717 237,103 126,129 82,249 177,798 264 — 1,186,248 Grades 7-12 145 14,580 5,846 6,386 27 2,033 — — 29,017 Total commercial real estate 259,133 318,297 242,949 132,515 82,276 179,831 264 — 1,215,265 Current period gross charge-offs — — — — — — — — — Residential real estate and home equity Performing 87,045 69,439 94,441 81,345 79,575 85,333 173,876 6,210 677,264 Nonperforming — 171 624 346 103 340 1,138 85 2,807 Total residential real estate and home equity 87,045 69,610 95,065 81,691 79,678 85,673 175,014 6,295 680,071 Current period gross charge-offs — 3 — 32 — — 30 1 66 Consumer Performing 43,692 33,063 28,594 10,092 2,398 983 13,823 — 132,645 Nonperforming 22 352 336 57 33 20 — — 820 Total consumer 43,714 33,415 28,930 10,149 2,431 1,003 13,823 — 133,465 Current period gross charge-offs $ 565 $ 230 $ 276 $ 118 $ 16 $ 22 $ 122 $ — $ 1,349 61 Table of Contents The following table shows the amortized cost of loans and leases, segregated by portfolio segment, with delinquency aging and nonaccrual status. (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due and Accruing Total Accruing Total Nonaccrual Nonaccrual with No Allowance for Credit Loss Total Financing Receivables December 31, 2025 Commercial and agricultural $ 794,559 $ 516 $ 24 $ — $ 795,099 $ 2,493 $ 773 $ 797,592 Renewable energy 652,799 — — — 652,799 — — 652,799 Auto and light truck 833,507 21 — — 833,528 54,348 28,411 887,876 Medium and heavy duty truck 268,173 — — — 268,173 1,576 — 269,749 Aircraft 1,084,554 2,267 — — 1,086,821 — — 1,086,821 Construction equipment 1,205,931 3,863 — — 1,209,794 11,341 10,797 1,221,135 Commercial real estate 1,267,157 149 — — 1,267,306 2,459 1,798 1,269,765 Residential real estate and home equity 733,037 2,677 958 460 737,132 3,645 — 740,777 Consumer 118,277 919 219 — 119,415 740 — 120,155 Total $ 6,957,994 $ 10,412 $ 1,201 $ 460 $ 6,970,067 $ 76,602 $ 41,779 $ 7,046,669 December 31, 2024 Commercial and agricultural $ 767,942 $ 275 $ 42 $ — $ 768,259 $ 4,715 $ 3,167 $ 772,974 Renewable energy 487,266 — — — 487,266 — — 487,266 Auto and light truck 943,403 2,226 — — 945,629 2,806 939 948,435 Medium and heavy duty truck 289,623 — — — 289,623 — — 289,623 Aircraft 1,123,797 — — — 1,123,797 — — 1,123,797 Construction equipment 1,185,936 — — — 1,185,936 17,976 17,404 1,203,912 Commercial real estate 1,203,967 9,703 — — 1,213,670 1,595 1,055 1,215,265 Residential real estate and home equity 675,669 1,010 585 96 677,360 2,711 — 680,071 Consumer 131,585 852 208 10 132,655 810 — 133,465 Total $ 6,809,188 $ 14,066 $ 835 $ 106 $ 6,824,195 $ 30,613 $ 22,565 $ 6,854,808 Interest income for the years ended December 31, 2025, 2024, and 2023, would have increased by approximately $ 5.83 million, $ 2.06 million, and $ 1.47 million, respectively, if the nonaccrual loans and leases had earned interest at their full contract rate. A loan or lease is considered collateral-dependent when the borrower is experiencing financial difficulty and the loan or lease is expected to be repaid substantially through the operation or sale of the collateral. Expected credit losses for collateral-dependent loans and leases are based on the fair value of the collateral, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. 62 Table of Contents The following table shows the amortized cost basis of collateral-dependent loans, segregated by portfolio segment, which are individually evaluated to determine credit losses. (Dollars in thousands) Real Estate Equipment General Business Assets Total Allowance on Collateral Dependent Loans and Leases December 31, 2025 Commercial and agricultural $ — $ — $ 1,136 $ 1,136 $ 19 Auto and light truck — 53,981 — 53,981 1,080 Medium and heavy duty truck — 1,507 — 1,507 166 Construction equipment — 10,797 — 10,797 — Commercial real estate 1,798 — — 1,798 — Total $ 1,798 $ 66,285 $ 1,136 $ 69,219 $ 1,265 December 31, 2024 Commercial and agricultural $ — $ — $ 4,102 $ 4,102 $ 209 Auto and light truck — 939 — 939 — Construction equipment — 17,404 — 17,404 — Commercial real estate 1,055 — — 1,055 — Total $ 1,055 $ 18,343 $ 4,102 $ 23,500 $ 209 Loan Modifications to Borrowers Experiencing Financial Difficulty The following table shows the amortized cost of loans and leases over $ 250,000 at December 31, 2025 and 2024, respectively, that were both experiencing financial difficulty and modified during the twelve months ended December 31, 2025 and 2024, respectively, segregated by portfolio segment and type of modification. The percentage of the amortized cost of loans and leases that were modified to borrowers in financial distress as compared to the amortized cost of each segment of financial receivable is also presented below. (Dollars in thousands) Payment Delay Term Extension Interest Rate Reduction Combination Payment Delay and Term Extension % of Total Segment Financing Receivables December 31, 2025 Commercial and agricultural $ — $ 5,653 $ — $ 1,691 0.92 % Auto and light truck 18,104 26,070 — — 4.98 Medium and heavy duty truck — — — 1,508 0.56 Construction equipment — 386 — — 0.03 Total $ 18,104 $ 32,109 $ — $ 3,199 0.76 % December 31, 2024 Commercial and agricultural $ 1,052 $ — $ — $ — 0.14 % Auto and light truck — — — 40,150 4.23 Medium and heavy duty truck — — — 3,017 1.04 Commercial real estate 988 — — — 0.08 Total $ 2,040 $ — $ — $ 43,167 0.66 % There were $ 4.02 million and $ 8.40 million of commitments to lend additional amounts to the borrowers included in the previous table at December 31, 2025 and December 31, 2024, respectively. 63 Table of Contents The Company closely monitors the performance of loans and leases that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the performance of such loans and leases that have been modified during the twelve months ended December 31, 2025 and December 31, 2024, respectively. (Dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due December 31, 2025 Commercial and agricultural $ 7,300 $ — $ — $ 44 $ 44 Auto and light truck 26,070 5,387 12,717 — 18,104 Medium and heavy duty truck 1,508 — — — — Construction equipment 386 — — — — Total $ 35,264 $ 5,387 $ 12,717 $ 44 $ 18,148 December 31, 2024 Commercial and agricultural $ 1,052 $ — $ — $ — $ — Auto and light truck 39,664 — 486 — 486 Medium and heavy duty truck 3,017 — — — — Commercial real estate 988 — — — — Total $ 44,721 $ — $ 486 $ — $ 486 The following table shows the financial effect of loan and lease modifications presented above to borrowers experiencing financial difficulty for the twelve months ended December 31, 2025 and December 31, 2024, respectively. Weighted- Average Interest Rate Reduction Weighted- Average Term Extension (in months) Weighted- Average Payment Delay (in months) Combination Weighted-Average Payment Delay and Term Extension (in months) December 31, 2025 Commercial and agricultural — % 8 0 7 Auto and light truck — 20 3 0 Medium and heavy duty truck — 0 0 3 Construction equipment — 5 0 0 Total — % 17 3 5 December 31, 2024 Commercial and agricultural — % 0 6 0 Auto and light truck — 0 0 3 Medium and heavy duty truck — 0 0 4 Commercial real estate — 0 6 0 Total — % 0 6 3 There was one modified loan to a borrower experiencing financial difficulty which had a payment default within twelve months of modification during each of the twelve month periods ended December 31, 2025 and December 31, 2024, respectively. Upon the Company’s determination that a modified loan or lease has subsequently been deemed uncollectible, the loan or lease is written off. Therefore, the amortized cost of the loan is reduced by the uncollectible amount and the allowance for loan and lease losses is adjusted by the same amount. 64 Table of Contents Note 5 — Allowance for Credit Losses Allowance for Loan and Lease Losses The methodology used to estimate the appropriate level of the allowance for loan and lease losses is described in Note 1, under the heading “Allowance for Credit Losses.” The allowance for loan and lease losses at December 31, 2025 and 2024, represents the Company’s current estimate of lifetime credit losses inherent in the loan and lease portfolio. The following table shows the changes in the allowance for loan and lease losses, segregated by portfolio segment, for each of the three years ended December 31. (Dollars in thousands) Commercial and agricultural Renewable energy Auto and light truck Medium and heavy duty truck Aircraft Construction equipment Commercial real estate Residential real estate and home equity Consumer Total 2025 Balance, beginning of year $ 21,316 $ 8,562 $ 18,437 $ 7,292 $ 36,663 $ 28,258 $ 24,821 $ 7,976 $ 2,215 $ 155,540 Charge-offs 2,420 — 2,366 — 485 1,407 27 74 1,521 8,300 Recoveries 929 — 1,806 — 565 426 90 21 257 4,094 Net charge-offs (recoveries) 1,491 — 560 — ( 80 ) 981 ( 63 ) 53 1,264 4,206 Provision (recovery of provision) 2,158 3,271 3,776 ( 997 ) ( 900 ) 252 512 1,153 1,287 10,512 Balance, end of year $ 21,983 $ 11,833 $ 21,653 $ 6,295 $ 35,843 $ 27,529 $ 25,396 $ 9,076 $ 2,238 $ 161,846 2024 Balance, beginning of year $ 17,385 $ 6,610 $ 16,858 $ 8,965 $ 37,653 $ 26,510 $ 23,690 $ 7,698 $ 2,183 $ 147,552 Charge-offs 9,825 — 730 — 68 1,692 — 66 1,349 13,730 Recoveries 418 — 3,273 — 1,279 2,100 724 26 235 8,055 Net charge-offs (recoveries) 9,407 — ( 2,543 ) — ( 1,211 ) ( 408 ) ( 724 ) 40 1,114 5,675 Provision (recovery of provision) 13,338 1,952 ( 964 ) ( 1,673 ) ( 2,201 ) 1,340 407 318 1,146 13,663 Balance, end of year $ 21,316 $ 8,562 $ 18,437 $ 7,292 $ 36,663 $ 28,258 $ 24,821 $ 7,976 $ 2,215 $ 155,540 2023 Balance, beginning of year $ 14,635 $ 7,217 $ 18,634 $ 7,566 $ 41,093 $ 24,039 $ 17,431 $ 6,478 $ 2,175 $ 139,268 Charge-offs 4,305 — 729 — — 54 248 101 1,211 6,648 Recoveries 243 — 5,591 12 967 1,656 11 334 252 9,066 Net charge-offs (recoveries) 4,062 — ( 4,862 ) ( 12 ) ( 967 ) ( 1,602 ) 237 ( 233 ) 959 ( 2,418 ) Provision (recovery of provision) 6,812 ( 607 ) ( 6,638 ) 1,387 ( 4,407 ) 869 6,496 987 967 5,866 Balance, end of year $ 17,385 $ 6,610 $ 16,858 $ 8,965 $ 37,653 $ 26,510 $ 23,690 $ 7,698 $ 2,183 $ 147,552 The allowance for loan and lease losses increased year-over-year in 2025 due to loan growth, the accretive impact of changes in the forecast adjustment, and a modest increase in special attention balances, which are reserved at higher rates. The Company remains cautious on the forward-outlook and the forecast adjustment reflects an increase in downside risk as compared to the prior year-end analysis. Growth expectations remain fragile, and the forecast reflects heightened uncertainty and a broader range of potential negative macroeconomic outcomes as compared to the previous year-end. Allowance increases were partially offset by declines in historical loss rates due to generally modest charge-offs and/or recovery activity in select portfolios as compared to the prior year-end. Economic Outlook As of December 31, 2025, the most significant economic factors impacting the Company’s loan portfolios are uncertainty in the domestic growth outlook, the ongoing impact of changes in trade policy, still-elevated inflation and interest rates, along with ongoing foreign conflicts and geopolitical instability. The labor market has exhibited broadening signs of softening, including a decline in job openings, and slower payroll growth. Payroll growth has lacked industry sector breadth for multiple consecutive quarters. Uncertainty regarding tariff policy and timing raises downside risks relative to the prior year. The Company remains concerned about tariff policies, uncertainty surrounding policy implementation, and the impact on the Company’s markets. To date, tariff impacts have largely been absorbed within the supply chain, but pass-through to the consumer remains a risk. Consumer stressors are evident and consumer confidence is weakening. The Company remains concerned about small businesses’ ability to manage expenses in an environment of broad instability, elevated interest rates, and higher cost of capital. Restrictive trade policies increase the potential for volatility in asset prices which collateralize the Company’s loans. The forecast considers global and domestic economic impacts from these factors, as well as other key economic factors, such as changes in gross domestic product and unemployment, which may impact the Company’s clients. Forecast assumptions as of year-end represent a broadening of economic risks as compared to the prior year-end’s analysis. The forecast reflects uncertain economic growth expectations and a continued weighting towards downside risks during the forecast period over the next two years with inflation slowly moving back towards the 2% Federal Reserve target rate resulting in an adverse impact on the loan and lease portfolio. Although the Company’s current loss estimates consider geopolitical and economic risk, due to the level of uncertainty associated with these and other risk factors, the complexity of the current environment, and the potential for future changes in the forecast, the Company’s future loss estimates may vary considerably from the December 31, 2025 assumptions. Liability for Credit Losses on Unfunded Loan Commitments The liability for credit losses inherent in unfunded loan commitments is included in Accrued Expenses and Other Liabilities on the Consolidated Statements of Financial Condition. The following table shows the changes in the liability for credit losses on unfunded loan commitments for each of the three years ended December 31. (Dollars in thousands) 2025 2024 2023 Balance, beginning of year $ 6,985 $ 8,182 $ 5,616 Provision (recovery of provision) 2,050 ( 1,197 ) 2,566 Balance, end of year $ 9,035 $ 6,985 $ 8,182 Note 6 — Lease Investments As a lessor, the Company’s loan and lease portfolio includes direct finance leases, which are included in Commercial and Agricultural, Renewable Energy, Auto and Light Truck, Medium and Heavy Duty Truck, Aircraft, and Construction Equipment on the Consolidated Statements of Financial Condition. The Company also finances various types of construction equipment, medium and heavy duty trucks, automobiles and other equipment under leases classified as operating leases, which are included in Equipment Owned Under Operating Leases, Net, on the Consolidated Statements of Financial Condition. The following table shows the components of the investment in direct finance and operating leases as of December 31. (Dollars in thousands) 2025 2024 Direct finance leases: Minimum lease payments $ 221,412 $ 219,332 Estimated unguaranteed residual values — — Less: Unearned income ( 39,715 ) ( 45,064 ) Net investment in direct finance leases $ 181,697 $ 174,268 Operating leases: Gross investment in operating leases $ 13,455 $ 23,752 Accumulated depreciation ( 6,491 ) ( 12,269 ) Net investment in operating leases $ 6,964 $ 11,483 The following table shows future minimum lease payments due from clients on direct finance and operating leases at December 31, 2025. (Dollars in thousands) Direct Finance Leases Operating Leases 2026 $ 70,791 $ 2,027 2027 44,069 1,161 2028 33,144 573 2029 23,295 89 2030 18,456 — Thereafter 31,657 — Total $ 221,412 $ 3,850 To mitigate the risk of loss, the Company seeks to diversify both the type of equipment leased and the industries in which the lessees participate. In addition, a portion of the Company’s leases are terminal rental adjustment clause or “TRAC” leases where the lessee effectively guarantees the full residual value through a rental adjustment at the end of term or those where partial value is guaranteed (“split-TRAC”), which has a limited residual risk. Under a split-TRAC structure, the limited residual risk would be satisfied first by the net sale proceeds of the leased asset. The lessee’s at-risk portion, or top risk, is satisfied last and is subject to repayment as additional rent, if the TRAC amount is not satisfied by the net sale proceeds. The carrying amount of residual assets covered by residual value guarantees was $ 43.51 million and $ 30.57 million at December 31, 2025 and December 31, 2024, respectively. 65 Table of Contents The following table shows interest income recognized from direct finance lease payments and operating lease equipment rental income and related depreciation expense. (Dollars in thousands) 2025 2024 2023 Direct finance leases: Interest income on lease receivable $ 17,001 $ 13,655 $ 13,553 Operating leases: Income related to lease payments $ 3,021 $ 5,171 $ 8,837 Depreciation expense 2,415 4,073 7,093 Income related to reimbursements from lessees for personal property tax on operating leased equipment for the years ended December 31, 2025, 2024 and 2023 were $ 0.15 million, $ 0.20 million and $ 0.27 million, respectively. Expense related to personal property tax payments on operating leased equipment for the year ended December 31, 2025, 2024 and 2023 were $ 0.15 million, $ 0.20 million and $ 0.27 million, respectively. During the years ended December 31, 2025, 2024, and 2023, the Company recorded impairment charges of $ 0.00 million , $ 0.00 million , and $ 0.00 million , respectively. Impairment charges are recorded as a result of the annual review of operating lease residual values and are recognized in Depreciation — Leased Equipment on the Consolidated Statements of Income. Note 7 — Premises and Equipment The following table shows premises and equipment as of December 31. (Dollars in thousands) 2025 2024 Land $ 19,218 $ 16,427 Buildings and improvements 73,972 71,325 Furniture and equipment 44,581 43,312 Total premises and equipment 137,771 131,064 Accumulated depreciation ( 79,453 ) ( 77,608 ) Net premises and equipment $ 58,318 $ 53,456 Depreciation of properties and equipment totaled $ 5.07 million in 2025, $ 4.46 million in 2024, and $ 4.45 million in 2023. Note 8 — Mortgage Servicing Rights The unpaid principal balance of residential mortgage loans serviced for third parties was $ 756.53 million at December 31, 2025, compared to $ 777.81 million at December 31, 2024, and $ 806.05 million at December 31, 2023. Amortization expense on MSRs is expected to total $ 0.52 million, $ 0.44 million, $ 0.38 million, $ 0.33 million, and $ 0.28 million in 2026, 2027, 2028, 2029, and 2030, respectively. Projected amortization excludes the impact of future asset additions or disposals. The following table shows changes in the carrying value of MSRs and the associated valuation allowance. (Dollars in thousands) 2025 2024 Mortgage servicing rights: Balance at beginning of year $ 3,436 $ 3,670 Additions 631 547 Amortization ( 767 ) ( 781 ) Sales — — Carrying value before valuation allowance at end of year 3,300 3,436 Valuation allowance: Balance at beginning of year — — Impairment recoveries — — Balance at end of year $ — $ — Net carrying value of mortgage servicing rights at end of year $ 3,300 $ 3,436 Fair value of mortgage servicing rights at end of year $ 7,325 $ 7,480 66 Table of Contents The balance of MSRs is located in Accrued Income and Other Assets on the Consolidated Statements of Financial Condition. At December 31, 2025, the fair value of MSRs exceeded the carrying value reported on the Consolidated Statements of Financial Condition by $ 4.03 million. This difference represents increases in the fair value of certain MSRs that could not be recorded above cost basis. Funds held in trust at 1st Source for the payment of principal, interest, taxes and insurance premiums applicable to mortgage loans being serviced for others, were approximately $ 9.21 million and $ 8.45 million at December 31, 2025 and December 31, 2024, respectively. Mortgage loan contractual servicing fees, including late fees and ancillary income, were $ 2.38 million, $ 2.40 million, and $ 2.54 million for 2025, 2024, and 2023, respectively. Mortgage loan contractual servicing fees are included in Mortgage Banking on the Consolidated Statements of Income. Note 9 — Intangible Assets and Goodwill At December 31, 2025, intangible assets consisted of goodwill of $ 83.90 million and other intangible assets of $ 0.00 million, which was net of accumulated amortization of $ 0.40 million. At December 31, 2024, intangible assets consisted of goodwill of $ 83.90 million and other intangible assets of $ 0.00 million, which was net of accumulated amortization of $ 0.14 million. Intangible asset amortization was $ 0.26 million, $ 0.02 million, and $ 0.11 million for 2025, 2024, and 2023, respectively. There is no expected future amortization expense related to other intangible assets as of December 31, 2025, as such assets are fully amortized. The following table shows a summary of other intangible assets as of December 31. (Dollars in thousands) 2025 2024 Other intangibles: Gross carrying amount $ 404 $ 146 Less: accumulated amortization ( 404 ) ( 144 ) Net carrying amount $ — $ 2 Note 10 — Deposits The aggregate amount of certificates of deposit of $250,000 or more and other time deposits of $250,000 or more outstanding at December 31, 2025 and 2024 was $ 685.03 million and $ 897.93 million, respectively. The following table shows the amount of certificates of deposit of $250,000 or more and other time deposits of $250,000 or more outstanding at December 31, 2025, by time remaining until maturity. (Dollars in thousands) Under 3 months $ 209,653 4 – 6 months 174,695 7 – 12 months 146,880 Over 12 months 153,805 Total $ 685,033 The following table shows scheduled maturities of time deposits, including both private and public funds, at December 31, 2025. (Dollars in thousands) 2026 $ 1,314,171 2027 228,411 2028 41,238 2029 1,260 2030 1,065 Thereafter 455 Total $ 1,586,600 67 Table of Contents Note 11 — Borrowed Funds and Mandatorily Redeemable Securities The following table shows the details of long-term debt and mandatorily redeemable securities as of December 31. (Dollars in thousands) 2025 2024 Federal Home Loan Bank borrowings ( 1.04 %) $ 10,000 $ 10,000 Mandatorily redeemable securities 27,783 22,073 Other long-term debt 5,547 7,083 Total long-term debt and mandatorily redeemable securities $ 43,330 $ 39,156 Annual maturities of long-term debt outstanding at December 31, 2025, for the next five years and thereafter beginning in 2026, are as follows: $ 12.03 million; $ 1.57 million; $ 0.94 million; $ 0.79 million; $ 0.12 million; and $ 27.88 million. At December 31, 2025, the Federal Home Loan Bank borrowings represented a source of funding for community economic development activities, agricultural loans and general funding for the bank and consisted of one fixed rate note maturing in 2026. This note was collateralized by $ 13.50 million of certain real estate loans. Mandatorily redeemable securities as of December 31, 2025 and 2024, of $ 27.78 million and $ 22.07 million, respectively reflected the “book value” shares under the 1st Source Executive Incentive Plan. See Note 16 - Stock Based Compensation (Stock Award Plans) for additional information. Dividends paid on these shares and changes in book value per share are recorded as Other interest expense on the Consolidated Statements of Income. Total interest expense recorded for 2025, 2024, and 2023 was $ 4.48 million, $ 2.97 million, and $ 3.60 million, respectively. The following table shows the details of short-term borrowings as of December 31. 2025 2024 (Dollars in thousands) Amount Weighted Average Rate Amount Weighted Average Rate Federal funds purchased $ 50,000 3.68 % $ — — % Securities sold under agreements to repurchase 62,470 0.73 72,346 1.15 Federal Home Loan Bank advances 125,000 3.79 75,000 4.50 Federal Reserve advances — — 100,000 4.76 Other short-term borrowings 1,151 — 1,852 — Total short-term borrowings $ 238,621 2.94 % $ 249,198 3.60 % Note 12 — Variable Interest Entities A variable interest entity (VIE) is a partnership, limited liability company, trust or other legal entity that meets any one of the following criteria: • The entity does not have sufficient equity to conduct its activities without additional subordinated financial support from another party. • The entity’s investors lack the power to direct the activities that most significantly affect the entity’s economic performance. • The entity’s at-risk holders do not have the obligation to absorb the losses or the right to receive residual returns. • The voting rights of some investors are not proportional to their economic interests in the entity, and substantially all of the entity’s activities involve, or are conducted on behalf of, investors with disproportionately few voting rights. The Company is involved in various entities that are considered to be VIEs. The Company’s investments in VIEs are primarily related to investments promoting affordable housing, community development and renewable energy sources. Some of these tax-advantaged investments support the Company’s regulatory compliance with the Community Reinvestment Act. The Company’s investments in these entities generate a return primarily through the realization of federal and state income tax credits and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits are recognized as a reduction of tax expense or, for investments qualifying as investment tax credits, as a reduction to the related investment asset. The Company recognized federal and state income tax credits related to its affordable housing and community development tax-advantaged investments in tax expense of $ 3.81 million, $ 3.19 million and $ 2.66 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company also recognized $ 24.50 million, $ 22.74 million and $ 37.23 million of investment tax credits for the years ended December 31, 2025, 2024 and 2023, respectively. 68 Table of Contents The Company is not required to consolidate VIEs in which it has concluded it does not have a controlling financial interest, and thus is not the primary beneficiary. In such cases, the Company does not have both the power to direct the entities’ most significant activities and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. As a limited partner in these operating partnerships, the Company is allocated credits and deductions associated with the underlying properties. The Company has determined that it is not the primary beneficiary of these investments because the general partners have the power to direct activities that most significantly influence the economic performance of their respective partnerships. The Company’s investments in these unconsolidated VIEs are carried in Other Assets on the Consolidated Statements of Financial Condition. The Company’s unfunded capital and other commitments related to these unconsolidated VIEs are generally carried in Other Liabilities on the Consolidated Statements of Financial Condition. The Company’s maximum exposure to loss from these unconsolidated VIEs includes the investment recorded on the Consolidated Statements of Financial Condition, net of unfunded capital commitments, and previously recorded tax credits which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level. While the Company believes potential losses from these investments are remote, the maximum exposure was determined by assuming a scenario where the community-based business projects, housing projects, and renewable energy projects completely fail and do not meet certain taxing authority compliance requirements, resulting in recapture of the related tax credits. The following table provides a summary of investments in affordable housing, community development and renewable energy VIEs that the Company has not consolidated as of December 31, 2025 and 2024. (Dollars in thousands) 2025 2024 Investment carrying amount $ 72,390 $ 62,044 Unfunded capital and other commitments 57,989 52,806 Maximum exposure to loss 84,442 74,242 The Company is required to consolidate VIEs in which it has concluded it has significant involvement and the ability to direct the activities that impact the entity’s economic performance. The Company is the managing general partner of entities in which it shares interest in tax-advantaged investments with a third party. At December 31, 2025 and 2024, approximately $ 47.87 million and $ 78.20 million, respectively, of the Company’s assets and $ 0.00 million and $ 0.00 million, respectively, of its liabilities included on the Consolidated Statements of Financial Condition were related to tax-advantaged investment VIEs which the Company has consolidated. The assets of the consolidated VIEs are reported in Other Assets, the liabilities are reported in Other Liabilities, and the non-controlling interest is reported in Equity on the Consolidated Statements of Financial Condition. The assets of a particular VIE are the primary source of funds to settle its obligations. The creditors of the VIE do not have recourse to the general credit of the Company. The Company’s exposure to the consolidated VIE is generally limited to the carrying value of its variable interest plus any related tax credits previously recognized. Additionally, the Company sponsors one trust, 1st Source Master Trust (Capital Trust), of which 100 % of the common equity is owned by the Company. The Capital Trust was formed in 2007 for the purpose of issuing corporation-obligated mandatorily redeemable capital securities (the capital securities) to third-party investors and investing the proceeds from the sale of the capital securities solely in junior subordinated debenture securities of the Company (the subordinated notes). The subordinated notes held by the Capital Trust are the sole assets of the Capital Trust. The Capital Trust qualifies as a variable interest entity for which the Company is not the primary beneficiary and is therefore reported in the financial statements as an unconsolidated subsidiary. The junior subordinated debentures are reflected as subordinated notes on the Consolidated Statements of Financial Condition with the corresponding interest distributions reflected as Interest Expense on the Consolidated Statements of Income. The common shares issued by the Capital Trust are included in Other Assets on the Consolidated Statements of Financial Condition. Distributions on the capital securities issued by the Capital Trust are payable quarterly at a rate per annum equal to the interest rate being earned by the Capital Trust on the subordinated notes held by the Capital Trust. The capital securities are subject to mandatory redemption, in whole or in part, upon repayment of the subordinated notes. The Company has entered into agreements which, taken collectively, fully and unconditionally guarantee the capital securities subject to the terms of each of the guarantees. The capital securities held by the Capital Trust qualify as Tier 1 capital under Federal Reserve Board guidelines. 69 Table of Contents The following table shows subordinated notes at December 31, 2025. (Dollars in thousands) Amount of Subordinated Notes Interest Rate Maturity Date June 2007 issuance (1) $ 41,238 7.22 % 6/15/2037 August 2007 issuance (2) 17,526 5.46 % 9/15/2037 Total $ 58,764 (1) Fixed rate through life of debt. (2) 3-Month Term SOFR + the 3-Month tenor spread adjustment + 1.48 % through remaining life of debt. Note 13 — Earnings Per Share Earnings per common share is computed using the two-class method. Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the applicable period, excluding outstanding participating securities. Participating securities include non-vested restricted stock awards. Non-vested restricted stock awards are considered participating securities to the extent the holders of these securities receive non-forfeitable dividends at the same rate as holders of common stock. Diluted earnings per common share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Stock options, where the exercise price was greater than the average market price of the common shares, were excluded from the computation of diluted earnings per common share because the result would have been antidilutive. No stock options were considered antidilutive as of December 31, 2025, 2024 and 2023. The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share for the three years ending December 31. (Dollars in thousands - except per share amounts) 2025 2024 2023 Distributed earnings allocated to common stock $ 37,217 $ 34,265 $ 32,001 Undistributed earnings allocated to common stock 119,647 97,130 91,735 Net earnings allocated to common stock 156,864 131,395 123,736 Net earnings allocated to participating securities 1,413 1,228 1,191 Net income allocated to common stock and participating securities $ 158,277 $ 132,623 $ 124,927 Weighted average shares outstanding for basic earnings per common share 24,487,374 24,496,148 24,615,546 Dilutive effect of stock compensation — — — Weighted average shares outstanding for diluted earnings per common share 24,487,374 24,496,148 24,615,546 Basic earnings per common share $ 6.41 $ 5.36 $ 5.03 Diluted earnings per common share $ 6.41 $ 5.36 $ 5.03 Note 14 — Accumulated Other Comprehensive Loss The following table presents reclassifications out of accumulated other comprehensive loss related to unrealized losses on available-for-sale securities for the two years ending December 31. (Dollars in thousands) 2025 2024 2023 Affected Line Item in the Consolidated Statements of Income Realized losses included in net income $ ( 8,679 ) $ ( 3,889 ) $ ( 2,926 ) Losses on investment securities available-for-sale ( 8,679 ) ( 3,889 ) ( 2,926 ) Income before income taxes Tax effect 1,958 874 665 Income tax expense Net of tax $ ( 6,721 ) $ ( 3,015 ) $ ( 2,261 ) Net income Note 15 — Employee Benefit Plans The 1st Source Corporation Employee Stock Ownership and Profit Sharing Plan (as amended, the “Plan”) includes an employee stock ownership component, which is designed to invest in and hold 1st Source common stock, and a 401(k) plan component, which holds all Plan assets not invested in 1st Source common stock. The Plan encourages diversification of investments with opportunities to change investment elections and contribution levels. 70 Table of Contents Employees are eligible to participate in the Plan the first of the month following 90 days of employment. The Company matches dollar for dollar on the first 4 % of deferred compensation, plus 50 cents on the dollar of the next 2 % deferrals. The Company will also contribute to the Plan an amount designated as a fixed 2 % employer contribution. The amount of fixed contribution is equal to two percent of the participant’s eligible compensation. Additionally, each year the Company may, in its sole discretion, make a discretionary profit sharing contribution. As of December 31, 2025 and 2024, there were 668,737 and 699,883 shares, respectively, of 1st Source Corporation common stock held in relation to employee benefit plans. The Company contributions are allocated among the participants on the basis of compensation. Each participant’s account is credited with cash and/or shares of 1st Source common stock based on that participant’s compensation earned during the year. After completing 5 years of service in which they worked at least 1,000 hours per year, a participant will be completely vested in the Company’s contribution. An employee is always 100 % vested in their deferral. Plan participants are entitled to receive distributions from their Plan accounts in-service and upon termination of service, retirement, or death. Contribution expense for the years ended December 31, 2025, 2024, and 2023, amounted to $ 7.78 million, $ 6.53 million, and $ 6.76 million, respectively. During the years ended December 31, 2025, 2024, and 2023, the Company utilized $ 0.08 million, $ 0.65 million, and $ 0.00 million of accumulated Plan forfeitures to offset employer contribution expense. Note 16 — Stock Based Compensation As of December 31, 2025, the Company had four active stock-based employee compensation plans. These plans include three executive stock award plans, the Executive Incentive Plan (EIP), the Restricted Stock Award Plan (RSAP), the Strategic Deployment Incentive Plan (SDP); and the Employee Stock Purchase Plan (ESPP). The 2011 Stock Option Plan was approved by the shareholders on April 21, 2011 but the Company had not made any grants through December 31, 2025. These stock-based employee compensation plans were established to help retain and motivate key employees. All of the plans have been approved by the shareholders of 1st Source Corporation. The Executive Compensation and Human Resources Committee (the “Committee”) of the 1st Source Corporation Board of Directors has sole authority to select the employees, establish the awards to be issued, and approve the terms and conditions of each award under the stock-based compensation plans. Stock-based compensation to employees is recognized as compensation cost on the Consolidated Statements of Income based on their fair values on the measurement date, which, for 1st Source, is the date of grant. Stock-based compensation expense is recognized ratably over the requisite service period for all awards. The total fair value of share awards vested was $ 5.81 million during 2025, $ 4.73 million in 2024, and $ 3.56 million in 2023. The following table shows the combined summary of activity regarding active stock option and stock award plans. Non-Vested Stock Awards Outstanding Shares Available for Grant Number of Shares Weighted-Average Grant-Date Fair Value Balance, January 1, 2023 730,191 288,525 $ 37.03 Shares authorized - 2023 EIP 87,271 — — Granted ( 157,485 ) 157,485 41.75 Stock awards vested — ( 89,352 ) 35.14 Forfeited 1,571 ( 5,411 ) 37.91 Balance, December 31, 2023 661,548 351,247 39.61 Shares authorized - 2024 EIP 73,669 — — Granted ( 78,600 ) 78,600 41.49 Stock awards vested — ( 104,307 ) 37.98 Forfeited 9,450 ( 14,802 ) 45.52 Balance, December 31, 2024 666,067 310,738 40.35 Shares authorized - 2025 EIP 76,908 — — Granted ( 147,832 ) 147,832 52.76 Stock awards vested — ( 114,033 ) 41.43 Forfeited 150 ( 3,089 ) 40.96 Balance, December 31, 2025 595,293 341,448 $ 45.36 Stock Option Plans — Incentive stock option plans include the 2011 Stock Option Plan (the “2011 Plan”). 71 Table of Contents Each award from the plan is evidenced by an award agreement that specifies the option price, the duration of the option, the number of shares to which the option pertains, and such other provisions as the Committee determines. The option price is equal to the fair market value of a share of 1st Source Corporation’s common stock on the date of grant. Options granted expire at such time as the Committee determines at the date of grant and in no event does the exercise period exceed a maximum of ten years . Upon merger, consolidation, or other corporate consolidation in which 1st Source Corporation is not the surviving corporation, as defined in the plans, all outstanding options immediately vest. There were zero stock options exercised during 2025, 2024 or 2023. All shares issued in connection with stock option exercises and non-vested stock awards are issued from available treasury stock. No stock-based compensation expense related to stock options was recognized in 2025, 2024 or 2023. The fair value of each option on the date of grant is estimated using the Black-Scholes option pricing model. Expected volatility is based on the historical volatility estimated over a period equal to the expected life of the options. In estimating the fair value of stock options under the Black-Scholes valuation model, separate groups of employees that have similar historical exercise behavior are considered separately. The expected life of the options granted is derived based on past experience and represents the period of time that options granted are expected to be outstanding. Stock Award Plans — Incentive stock award plans include the EIP, the SDP and the RSAP. The EIP is administered by the Committee. Awards under the EIP and SDP include “book value” shares and “market value” shares of common stock. These shares are awarded annually based on weighted performance criteria and generally vest over a period of five years . The EIP book value shares may only be sold to 1st Source and such sale is mandatory in the event of death, retirement, disability, or termination of employment. The RSAP is designed for key employees. Awards under the RSAP are made to employees recommended by the Chief Executive Officer and approved by the Committee. Shares granted under the RSAP vest over a period of up to ten years and vesting is based upon meeting certain various criteria, including continued employment with 1st Source. Stock-based compensation expense relating to the EIP, SDP and RSAP totaled $ 6.20 million in 2025, $ 5.65 million in 2024, and $ 4.89 million in 2023. The total income tax benefit recognized in the accompanying Consolidated Statements of Income related to stock-based compensation was $ 1.40 million in 2025, $ 1.27 million in 2024, and $ 1.11 million in 2023. Unrecognized stock-based compensation expense related to non-vested stock awards (EIP/SDP/RSAP) was $ 12.56 million at December 31, 2025. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 3.01 years. The fair value of non-vested stock awards for the purposes of recognizing stock-based compensation expense is market price of the stock on the measurement date, which, for the Company’s purposes is the date of the award. Employee Stock Purchase Plan — The Company offers an ESPP for substantially all employees with at least two years of service on the effective date of an offering under the plan. Eligible employees may elect to purchase any dollar amount of stock, so long as such amount does not exceed 25 % of their base rate of pay and the aggregate stock accrual rate for all offerings does not exceed $ 25,000 in any calendar year. The purchase price for shares offered is the lower of the closing market bid price for the offering date or the average market bid price for the five business days preceding the offering date. The purchase price and premium/(discount) to the actual market closing price on the offering date for the 2025, 2024, and 2023 offerings were $ 60.67 ( 0.78 %), $ 51.21 ( 0.49 %), and $ 41.64 (- 0.50 %), respectively. Payment for the stock is made through payroll deductions over the offering period, and employees may discontinue the deductions at any time and exercise the option or take the funds out of the program. The most recent offering began June 2, 2025 and runs through June 1, 2027, with $ 188,960 in stock value to be purchased at $ 60.67 per share. Note 17 — Income Taxes The following table shows the composition of income tax expense. Year Ended December 31 (Dollars in thousands) 2025 2024 2023 Current: Federal $ 45,002 $ 31,826 $ 40,073 State 6,520 4,181 6,135 Total current 51,522 36,007 46,208 Deferred: Federal ( 4,838 ) 2,044 ( 7,917 ) State ( 566 ) 388 ( 1,545 ) Total deferred ( 5,404 ) 2,432 ( 9,462 ) Total provision $ 46,118 $ 38,439 $ 36,746 72 Table of Contents The following table shows the composition of income taxes paid (refunded). State taxes are disclosed for years when they exceed 5% of the total net taxes paid (refunded). Year Ended December 31 (Dollars in thousands) 2025 2024 2023 Federal $ ( 10,712 ) $ 7,700 $ 12,200 State 4,027 3,581 5,599 Total $ ( 6,685 ) $ 11,281 $ 17,799 State: Indiana $ 1,900 $ 1,850 $ 3,800 Illinois 365 — — California 422 — — The following table shows the reasons for the difference between income tax expense and the amount computed by applying the U.S. federal statutory income tax rate ( 21 %) to income before income taxes. 2025 2024 2023 Year Ended December 31 (Dollars in thousands) Amount Percent of Pretax Income Amount Percent of Pretax Income Amount Percent of Pretax Income U.S. federal statutory income tax $ 42,919 21.0 % $ 35,922 21.0 % $ 33,953 21.0 % (Decrease) increase in income taxes resulting from: State taxes, net of federal income tax benefit (1) 4,703 2.3 3,610 2.1 3,626 2.2 Tax credits ( 861 ) ( 0.4 ) ( 701 ) ( 0.4 ) ( 510 ) ( 0.3 ) Nontaxable or nondeductible items ( 643 ) ( 0.3 ) ( 392 ) ( 0.2 ) ( 323 ) ( 0.2 ) Total $ 46,118 22.6 % $ 38,439 22.5 % $ 36,746 22.7 % (1) State taxes in Indiana made up the majority (greater than 50%) of the tax effect. The tax benefit related to losses on investment securities available-for-sale for the years 2025, 2024, and 2023 was approximately $ 2.09 million, $ 0.94 million and $ 0.72 million, respectively. The following table shows the composition of deferred tax assets and liabilities as of December 31, 2025 and 2024. (Dollars in thousands) 2025 2024 Deferred tax assets: Allowance for credit losses $ 39,865 $ 34,738 Operating lease liability 3,989 4,371 Accruals for employee benefits 5,223 4,361 Tax credit carryover 2,546 — Net unrealized losses on securities available-for-sale 11,165 27,153 Other 3,373 1,838 Total deferred tax assets 66,161 72,461 Deferred tax liabilities: Differing depreciable bases in premises and leased equipment 3,442 4,782 Right of use assets - leases 4,848 5,075 Differing bases in assets related to acquisitions 4,303 4,335 Tax advantaged partnerships 5,957 574 Other 2,652 2,152 Total deferred tax liabilities 21,202 16,918 Net deferred tax asset $ 44,959 $ 55,543 No valuation allowance for deferred tax assets was recorded at December 31, 2025 and 2024 as the Company believes it is more likely than not that all of the deferred tax assets will be realized. Tax years that remain open and subject to audit include the federal 2022-2025 years and the Indiana 2022-2025 years. The Company does not anticipate a significant change in the amount of uncertain tax positions within the next 12 months. 73 Table of Contents Note 18 — Contingent Liabilities, Commitments, and Financial Instruments with Off-Balance-Sheet Risk Contingent Liabilities —1st Source and its subsidiaries are defendants in various legal proceedings arising in the normal course of business. In the opinion of management, based upon present information including the advice of legal counsel, the ultimate resolution of these proceedings will not have a material effect on the Company’s consolidated financial position or results of operations. 1st Source Bank sells residential mortgage loans to Fannie Mae as well as FHA-insured, USDA-insured and VA-guaranteed loans in Ginnie Mae mortgage-backed securities. Additionally, the Bank has sold loans on a service released basis to various other financial institutions in the past. The agreements under which the Bank sells these mortgage loans contain various representations and warranties regarding the acceptability of loans for purchase. On occasion, the Bank may be required to indemnify the loan purchaser for credit losses on loans that were later deemed ineligible for purchase or may be required to repurchase a loan. Both circumstances are collectively referred to as “repurchases.” The Company’s liability for repurchases, included in Accrued Expenses and Other Liabilities on the Consolidated Statements of Financial Condition, was $ 0.05 million and $ 0.12 million as of December 31, 2025 and 2024, respectively. The mortgage repurchase liability represents the Company’s best estimate of the loss that it may incur. The estimate is based on specific loan repurchase requests and a historical loss ratio with respect to origination dollar volume. Because the level of mortgage loan repurchase losses are dependent on economic factors, investor demand strategies and other external conditions that may change over the life of the underlying loans, the level of liability for mortgage loan repurchase losses is difficult to estimate and requires considerable management judgment. Lease Commitments — The Company and its subsidiaries are obligated under operating leases for certain office premises and equipment. The following table shows operating lease right of use assets and operating lease liabilities as of December 31. (Dollars in thousands) Statement of Financial Condition classification 2025 2024 Operating lease right of use assets Accrued income and other assets $ 20,130 $ 21,076 Operating lease liabilities Accrued expenses and other liabilities $ 16,566 $ 18,150 The following table shows the components of operating leases expense for the year ended December 31. (Dollars in thousands) Statement of Income classification 2025 2024 2023 Operating lease cost Net occupancy expense $ 3,804 $ 3,855 $ 3,721 Short-term lease cost Net occupancy expense 1 — 9 Variable lease cost Net occupancy expense 9 9 8 Total operating lease cost $ 3,814 $ 3,864 $ 3,738 The following table shows future minimum rental commitments for all noncancellable operating leases with an initial term longer than 12 months for the next five years and thereafter. (Dollars in thousands) 2026 $ 3,967 2027 3,270 2028 1,999 2029 1,887 2030 1,809 Thereafter 7,708 Total lease payments 20,640 Less: imputed interest ( 4,074 ) Present value of operating lease liabilities $ 16,566 74 Table of Contents The following table shows the weighted average remaining operating lease term, the weighted average discount rate and supplemental Consolidated Statement of Cash Flows information for operating leases at December 31. (Dollars in thousands) 2025 2024 2023 Weighted average remaining lease term 9.39 years 8.94 years 9.31 years Weighted average discount rate 4.46 % 4.34 % 4.28 % Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,403 $ 4,509 $ 4,508 There were no new significant leases that had not yet commenced as of December 31, 2025. Financial Instruments with Off-Balance-Sheet Risk — To meet the financing needs of its clients, 1st Source and its subsidiaries are parties to financial instruments with off-balance-sheet risk in the normal course of business. These off-balance-sheet financial instruments include commitments to originate and sell loans and standby letters of credit. The instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition. Financial instruments, whose contract amounts represent credit risk as of December 31, were as follows: (Dollars in thousands) 2025 2024 Amounts of commitments: Loan commitments to extend credit $ 1,438,112 $ 1,304,735 Standby letters of credit $ 20,870 $ 21,828 Commercial and similar letters of credit $ 1,435 $ 161 The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for loan commitments and standby letters of credit is represented by the dollar amount of those instruments. The Company uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance-sheet instruments. Loan commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company grants mortgage loan commitments to borrowers subject to normal loan underwriting standards. The interest rate risk associated with these loan commitments is managed by entering into contracts for future deliveries of loans. Standby letters of credit are conditional commitments issued to guarantee the performance of a client to a third party. The credit risk involved in and collateral obtained when issuing standby letters of credit are essentially the same as those involved in extending loan commitments to clients. Standby letters of credit generally have terms ranging from two months to one year . Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. Commercial letters of credit generally have terms ranging from two months to six months . Note 19 — Derivative Financial Instruments Commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments. See Note 18 for further information. The Company has certain interest rate derivative positions that are not designated as hedging instruments. Derivative assets and liabilities are recorded at fair value on the Consolidated Statements of Financial Condition and do not take into account the effects of master netting agreements. Master netting agreements allow the Company to settle all derivative contracts held with a single counterparty on a net basis, and to offset net derivative positions with related collateral, where applicable. These derivative positions relate to transactions in which the Company enters into an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each transaction, the Company agrees to pay interest to the client on a notional amount at a variable interest rate and receive interest from the client on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the client to effectively convert a variable rate loan to a fixed rate. Because the terms of the swaps with the customers and the other financial institutions offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact the Company’s results of operations. 75 Table of Contents The following table shows the amounts of non-hedging derivative financial instruments at December 31, 2025 and 2024. Asset derivatives Liability derivatives (Dollars in thousands) Notional or contractual amount Statement of Financial Condition classification Fair value Statement of Financial Condition classification Fair value Interest rate swap contracts $ 1,242,696 Other assets $ 16,486 Other liabilities $ 16,798 Loan commitments 8,208 Mortgages held for sale 153 N/A — Forward contracts - mortgage loan 10,000 N/A — Mortgages held for sale 21 Total - December 31, 2025 $ 1,260,904 $ 16,639 $ 16,819 Interest rate swap contracts $ 1,083,673 Other assets $ 16,424 Other liabilities $ 16,727 Loan commitments 3,586 Mortgages held for sale 118 N/A — Forward contracts - mortgage loan 4,500 Mortgages held for sale 17 N/A — Total - December 31, 2024 $ 1,091,759 $ 16,559 $ 16,727 The following table shows the amounts included on the Consolidated Statements of Income for non-hedging derivative financial instruments at December 31, 2025, 2024 and 2023. Gain (loss) (Dollars in thousands) Statement of Income classification 2025 2024 2023 Interest rate swap contracts Other expense $ ( 8 ) $ 133 $ 33 Interest rate swap contracts Other income 1,374 831 1,310 Loan commitments Mortgage banking 35 11 40 Forward contracts - mortgage loan Mortgage banking ( 38 ) 33 ( 40 ) Total $ 1,363 $ 1,008 $ 1,343 The following table shows the offsetting of financial assets and derivative assets at December 31, 2025 and 2024. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Assets Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Received Net Amount December 31, 2025 Interest rate swaps $ 16,486 $ — $ 16,486 $ — $ 105 $ 16,381 December 31, 2024 Interest rate swaps $ 16,424 $ — $ 16,424 $ — $ 12,615 $ 3,809 The following table shows the offsetting of financial liabilities and derivative liabilities at December 31, 2025 and 2024. Gross Amounts Not Offset in the Statement of Financial Condition (Dollars in thousands) Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Liabilities Presented in the Statement of Financial Condition Financial Instruments Cash Collateral Pledged Net Amount December 31, 2025 Interest rate swaps $ 16,798 $ — $ 16,798 $ — $ 6,230 $ 10,568 Repurchase agreements 62,470 — 62,470 62,470 — — Total $ 79,268 $ — $ 79,268 $ 62,470 $ 6,230 $ 10,568 December 31, 2024 Interest rate swaps $ 16,727 $ — $ 16,727 $ — $ — $ 16,727 Repurchase agreements 72,345 — 72,345 72,345 — — Total $ 89,072 $ — $ 89,072 $ 72,345 $ — $ 16,727 76 Table of Contents If a default in performance of any obligation of a repurchase or derivative agreement occurs, each party will set-off property held, or loan indebtedness owing, in respect of transactions against obligations owing in respect of any other transactions. At December 31, 2025 and December 31, 2024, repurchase agreements had a remaining contractual maturity of $ 62.42 million and $ 72.30 million in overnight and $ 0.05 million and $ 0.05 million in up to 30 days, respectively and were collateralized by U.S. Treasury and Federal agencies securities. Note 20 — Regulatory Matters The Company is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classification are subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets. The Company believes that it meets all capital adequacy requirements to which it is subject. The most recent notification from the Federal bank regulators categorized 1st Source Bank, the largest of its subsidiaries, as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized” the Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that the Company believes will have changed the institution’s category. 77 Table of Contents As discussed in Note 12, the capital securities held by the Capital Trusts qualify as Tier 1 capital under Federal Reserve Board guidelines. The following table shows the actual and required capital amounts and ratios for 1st Source Corporation and 1st Source Bank as of December 31, 2025 and 2024. Actual Minimum Capital Adequacy Minimum Capital Adequacy with Capital Buffer To Be Well Capitalized Under Prompt Corrective Action Provisions (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio 2025 Total Capital (to Risk-Weighted Assets): 1st Source Corporation $ 1,430,352 18.05 % $ 633,993 8.00 % $ 832,116 10.50 % $ 792,491 10.00 % 1st Source Bank 1,317,649 16.62 634,234 8.00 832,432 10.50 792,792 10.00 Tier 1 Capital (to Risk-Weighted Assets): 1st Source Corporation 1,330,404 16.79 475,495 6.00 673,617 8.50 633,993 8.00 1st Source Bank 1,217,664 15.36 475,675 6.00 673,874 8.50 634,234 8.00 Common Equity Tier 1 Capital (to Risk- Weighted Assets): 1st Source Corporation 1,230,285 15.52 356,621 4.50 554,744 7.00 515,119 6.50 1st Source Bank 1,174,545 14.82 356,757 4.50 554,955 7.00 515,315 6.50 Tier 1 Capital (to Average Assets): 1st Source Corporation 1,330,404 14.69 362,262 4.00 N/A N/A 452,827 5.00 1st Source Bank 1,217,664 13.45 362,135 4.00 N/A N/A 452,668 5.00 2024 Total Capital (to Risk-Weighted Assets): 1st Source Corporation $ 1,345,500 17.08 % $ 630,028 8.00 % $ 826,912 10.50 % $ 787,535 10.00 % 1st Source Bank 1,246,610 15.83 630,034 8.00 826,920 10.50 787,543 10.00 Tier 1 Capital (to Risk-Weighted Assets): 1st Source Corporation 1,246,267 15.82 472,521 6.00 669,405 8.50 630,028 8.00 1st Source Bank 1,147,376 14.57 472,526 6.00 669,412 8.50 630,034 8.00 Common Equity Tier 1 Capital (to Risk- Weighted Assets): 1st Source Corporation 1,118,829 14.21 354,391 4.50 551,274 7.00 511,898 6.50 1st Source Bank 1,076,938 13.67 354,394 4.50 551,280 7.00 511,903 6.50 Tier 1 Capital (to Average Assets): 1st Source Corporation 1,246,267 14.05 354,927 4.00 N/A N/A 443,659 5.00 1st Source Bank 1,147,376 12.93 354,822 4.00 N/A N/A 443,528 5.00 The Bank was not required to maintain noninterest bearing cash balances with the Federal Reserve Bank as of December 31, 2025 and 2024. Dividends that may be paid by a subsidiary bank to the parent company are subject to certain legal and regulatory limitations and also may be affected by capital needs, as well as other factors. Due to the Company’s mortgage activities, 1st Source Bank is required to maintain minimum net worth capital requirements established by various governmental agencies. 1st Source Bank’s net worth requirements are governed by the Department of Housing and Urban Development and GNMA. As of December 31, 2025, 1st Source Bank met its minimum net worth capital requirements. Note 21 — Fair Value Measurements The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of quoted prices and observable inputs and to minimize the use of unobservable inputs when measuring fair value. The Company elected fair value accounting for mortgages held for sale and for its best-efforts forward sales commitments. The Company economically hedges its mortgages held for sale at the time the interest rate locks are issued to the customers. The Company believes the election for mortgages held for sale will reduce certain timing differences and better match changes in the value of these assets with changes in the value of derivatives or best-efforts forward sales commitments. At December 31, 2025 and 2024, all mortgages held for sale were carried at fair value. 78 Table of Contents The following table shows the differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity on December 31, 2025 and 2024. (Dollars in thousands) Fair value carrying amount Aggregate unpaid principal Excess of fair value carrying amount over (under) unpaid principal December 31, 2025 Mortgages held for sale reported at fair value: Total Loans $ 4,866 $ 4,647 $ 219 (1) December 31, 2024 Mortgages held for sale reported at fair value: Total Loans $ 2,569 $ 2,343 $ 226 (1) (1) The excess of fair value carrying amount over (under) unpaid principal is included in Mortgage Banking Income on the Consolidated Statements of Income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding. Financial Instruments on Recurring Basis: The following is a description of the valuation methodologies used for financial instruments measured at fair value on a recurring basis: Investment securities available-for-sale are valued primarily by a third-party pricing agent. Prices supplied by the independent pricing agent, as well as their pricing methodologies and assumptions, are reviewed by the Company for reasonableness and to ensure such prices are aligned with market levels. In general, the Company’s investment securities do not possess a complex structure that could introduce greater valuation risk. The portfolio mainly consists of traditional investments including U.S. Treasury and Federal agencies securities, Federal agency mortgage pass-through securities, and general obligation and revenue municipal bonds. Pricing for such instruments is fairly generic and is easily obtained. On a quarterly basis, prices supplied by the pricing agent are validated by comparison to prices obtained from other third-party sources for a material portion of the portfolio. The valuation policy and procedures for Level 3 fair value measurements of available-for-sale debt securities are decided through collaboration between management of the Corporate Accounting and Funds Management departments. The changes in fair value measurement for Level 3 securities are analyzed on a periodic basis under a collaborative framework with the aforementioned departments. The methodology and variables used for input are derived from the combination of observable and unobservable inputs. The unobservable inputs are determined through internal assumptions that may vary from period to period due to external factors, such as market movement and credit rating adjustments. Both the market and income valuation approaches are implemented using the following types of inputs: • U.S. treasuries are priced using the market approach and utilizing live data feeds from active market exchanges for identical securities. • Government-sponsored agency debt securities and corporate bonds are primarily priced using available market information through processes such as benchmark curves, market valuations of like securities, sector groupings and matrix pricing. • Other government-sponsored agency securities, mortgage-backed securities and some of the actively traded REMICs and CMOs, are primarily priced using available market information including benchmark yields, prepayment speeds, spreads and volatility of similar securities. • State and political subdivisions are largely grouped by characteristics, i.e., geographical data and source of revenue in trade dissemination systems. Since some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities. Local direct placement municipal securities, with very little market activity, are priced using an appropriate market yield curve, which includes a credit spread assumption. Mortgages held for sale and the related loan commitments and forward contracts (hedges) are valued by a third-party pricing agent. Prices supplied by the independent pricing agent, as well as their pricing methodologies, are reviewed by the Company for reasonableness and to ensure such prices are aligned with market values. On a quarterly basis, prices supplied by the pricing agent are validated by comparison to the prices obtained from other third-party sources. 79 Table of Contents Interest rate swap positions, both assets and liabilities, are valued by a third-party pricing agent using an income approach and utilizing models that use as their basis readily observable market parameters. This valuation process considers various factors including interest rate yield curves, time value and volatility factors. Validation of third-party agent valuations is accomplished by comparing those values to the Company’s swap counterparty valuations. Management believes an adjustment is required to “mid-market” valuations for derivatives tied to its performing loan portfolio to recognize the imprecision and related exposure inherent in the process of estimating expected credit losses as well as velocity of deterioration evident with systemic risks embedded in these portfolios. Any change in the mid-market derivative valuation adjustment will be recognized immediately through the Consolidated Statements of Income. The following table shows the balance of assets and liabilities measured at fair value on a recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total December 31, 2025 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 516,892 $ 179,885 $ — $ 696,777 U.S. States and political subdivisions securities — 112,080 983 113,063 Mortgage-backed securities - Federal agencies — 712,143 — 712,143 Corporate debt securities — 503 — 503 Total debt securities available-for-sale 516,892 1,004,611 983 1,522,486 Mortgages held for sale — 4,866 — 4,866 Accrued income and other assets (interest rate swap agreements) — 16,486 — 16,486 Total $ 516,892 $ 1,025,963 $ 983 $ 1,543,838 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 16,798 $ — $ 16,798 Total $ — $ 16,798 $ — $ 16,798 December 31, 2024 Assets: Investment securities available-for-sale: U.S. Treasury and Federal agencies securities $ 446,021 $ 311,728 $ — $ 757,749 U.S. States and political subdivisions securities — 81,600 1,032 82,632 Mortgage-backed securities - Federal agencies — 695,918 — 695,918 Total debt securities available-for-sale 446,021 1,089,246 1,032 1,536,299 Mortgages held for sale — 2,569 — 2,569 Accrued income and other assets (interest rate swap agreements) — 16,424 — 16,424 Total $ 446,021 $ 1,108,239 $ 1,032 $ 1,555,292 Liabilities: Accrued expenses and other liabilities (interest rate swap agreements) $ — $ 16,727 $ — $ 16,727 Total $ — $ 16,727 $ — $ 16,727 80 Table of Contents The following table shows changes in Level 3 assets measured at fair value on a recurring basis. (Dollars in thousands) U.S. States and political subdivisions securities Beginning balance January 1, 2025 $ 1,032 Total gains or losses (realized/unrealized): Included in earnings — Included in other comprehensive income (loss) 41 Purchases — Issuances — Sales — Settlements — Maturities ( 90 ) Transfers into Level 3 — Transfers out of Level 3 — Ending balance December 31, 2025 $ 983 Beginning balance January 1, 2024 $ 1,161 Total gains or losses (realized/unrealized): Included in earnings — Included in other comprehensive income (loss) 51 Purchases — Issuances — Sales — Settlements — Maturities ( 180 ) Transfers into Level 3 — Transfers out of Level 3 — Ending balance December 31, 2024 $ 1,032 There were no gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2025 or 2024. The following table shows the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a recurring basis. (Dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Range of Inputs Weighted Average December 31, 2025 Debt securities available-for-sale Direct placement municipal securities $ 983 Discounted cash flows Credit spread assumption 0.88 % - 3.99 % 3.45 % December 31, 2024 Debt securities available-for-sale Direct placement municipal securities $ 1,032 Discounted cash flows Credit spread assumption 1.15 % - 4.59 % 3.96 % Financial Instruments on Non-recurring Basis: The Company may be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower of cost or market accounting or impairment charges of individual assets. 81 Table of Contents The Credit Policy Committee (CPC), a management committee, is responsible for overseeing the processes and controls for supporting Level 3 valuation inputs used for collateral-dependent loans and leases, other real estate, and repossessions. The CPC reviews these assets on a quarterly basis to determine the appropriateness and accuracy of observable inputs which can include, third-party appraisals, auction values, trade publications and borrower-provided information, and unobservable inputs which may include discounts for current market conditions, collateral condition, estimated time to liquidation, and collection considerations. Standard discount frameworks by asset type and valuation source are utilized and deviations from the standard are documented. The discounts are reviewed at least annually to determine whether they remain appropriate. Consideration is given to current trends in market values for the asset categories and realized gains and losses on sales of similar assets. The Loan and Funds Management Committee of the Board of Directors provides oversight for the CPC. Discounts vary depending on the nature of the assets and the source of value. Aircraft valuations may incorporate quarterly trade publication data adjusted for engine time, condition, and maintenance programs, typically discounted by 10 %. Likewise, autos are valued using current auction data, generally discounted by 10 %; medium and heavy duty trucks are valued using trade publications and auction data, commonly discounted by 15 %. Construction equipment values may reference trade publications and auction data, typically discounted by 20 %. Real estate is valued based on appraisals or evaluations, generally discounted by 20 % with higher discounts for property in poor condition or property with characteristics which may make it more difficult to market. For commercial loans subject to borrowing base certificates, discounts of at least 20 % are applied to receivables and 40 % - 75 % for inventory with higher discounts when monthly borrowing base certificates are not required or received. For collateral dependent loans and leases, where repayment is expected substantially from the collateral, expected credit losses are measured based on the fair value of the underlying collateral, less estimated cost to sell. Collateral values are reviewed at least quarterly and estimated using a market-based valuation approach that may include appraisals, dealer and auction quotations, trade publications, and other relevant market data, adjusted for collateral condition, market trends, and liquidation assumptions. In accordance with ASC 820, Fair Value Measurements, the collateral dependent loans and leases themselves are carried at amortized cost and are not classified within the fair value hierarchy. However, collateral dependent loans and leases for which an allowance for loan and lease loss has been established based on the fair value of collateral require classification in the fair value hierarchy. The Company has established MSRs valuation policies and procedures based on industry standards, designed to ensure that valuation methodologies are applied consistently and resulting fair value measurements are verifiable. MSRs are accounted for at the lower of cost or fair value. For purposes of impairment assessment, MSRs are stratified based on the predominant risk characteristics of the underlying servicing assets, principally by loan type. The fair value of each tranche of the servicing portfolio is estimated by calculating the present value of expected future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs, and other relevant economic factors. Prepayment rates and discount rates are derived through a third-party pricing agent. Changes in the most significant valuation inputs, including prepayment rates and discount rates, are evaluated in relation to changes in the fair value measurements and an appropriate resolution is made. In addition, an independent third-party fair value analysis is obtained and compared to the Company’s internal valuation for reasonableness. MSRs do not trade in an active, open market with readily observable prices, and while MSR sales do occur, the specific terms and conditions are not typically publicly available. Accordingly, the characteristics of the Company’s servicing portfolio may differ from those of other MSR servicing portfolios that do trade. Other real estate is carried at fair value less estimated costs to sell. Fair value is determined primarily using appraisals and reflects a market value approach. Fair values are reviewed quarterly and new appraisals are obtained annually. Repossessions are similarly valued. For assets measured at fair value on a nonrecurring basis the following represents impairment charges (recoveries) recognized on these assets during the year ended December 31, 2025 and 2024, respectively: collateral dependent loans and leases - $ 0.24 million and $ 10.43 million; MSRs - $ 0.00 million and $ 0.00 million; repossessions - $ 0.05 million and $ 0.03 million, and other real estate - $ 0.00 million and $ 0.00 million. 82 Table of Contents The following table shows the carrying value of assets measured at fair value on a non-recurring basis. (Dollars in thousands) Level 1 Level 2 Level 3 Total December 31, 2025 Collateral dependent loans and leases $ — $ — $ 26,175 $ 26,175 Accrued income and other assets (mortgage servicing rights) — — 3,300 3,300 Accrued income and other assets (repossessions) — — 267 267 Total $ — $ — $ 29,742 $ 29,742 December 31, 2024 Collateral dependent loans and leases $ — $ — $ 725 $ 725 Accrued income and other assets (mortgage servicing rights) — — 3,436 3,436 Accrued income and other assets (repossessions) — — 155 155 Accrued income and other assets (other real estate) — — 460 460 Total $ — $ — $ 4,776 $ 4,776 The following table below shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a non-recurring basis. (Dollars in thousands) Carrying Value Fair Value Valuation Methodology Unobservable Inputs Range of Inputs Weighted Average December 31, 2025 Collateral dependent loans and leases $ 26,175 $ 26,175 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 15 % - 30 % 23.9 % Mortgage servicing rights 3,300 7,325 Discounted cash flows Constant prepayment rate (CPR) 6.4 % - 33.4 % 7.4 % Discount rate 10.4 % - 12.4 % 10.6 % Repossessions 267 297 Appraisals, trade publications and auction values Discount for lack of marketability 0 % - 20 % 10 % December 31, 2024 Collateral dependent loans and leases $ 725 $ 725 Collateral based measurements including appraisals, trade publications, and auction values Discount for lack of marketability and current conditions 25 % - 30 % 28.0 % Mortgage servicing rights 3,436 7,480 Discounted cash flows Constant prepayment rate (CPR) 7.6 % - 23.0 % 7.6 % Discount rate 11.1 % - 13.1 % 11.3 % Repossessions 155 170 Appraisals, trade publications and auction values Discount for lack of marketability 0 % - 10 % 9 % Other real estate 460 500 Appraisals Discount for lack of marketability 0 % - 8 % 8 % GAAP requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring or non-recurring basis. 83 Table of Contents The following table shows the fair values of the Company’s financial instruments. (Dollars in thousands) Carrying or Contract Value Fair Value Level 1 Level 2 Level 3 December 31, 2025 Assets: Cash and due from banks $ 69,249 $ 69,249 $ 69,249 $ — $ — Federal funds sold and interest bearing deposits with other banks 50,608 50,608 50,608 — — Other investments 22,140 22,140 22,140 — — Loans and leases, net of allowance for loan and lease losses 6,884,823 6,946,110 — — 6,946,110 Accrued interest receivable 35,539 35,539 — 35,539 — Liabilities: Deposits $ 7,225,575 $ 7,223,139 $ 5,638,975 $ 1,584,164 $ — Short-term borrowings 238,621 238,621 113,574 125,047 — Long-term debt and mandatorily redeemable securities 43,330 43,292 — 43,292 — Subordinated notes 58,764 59,076 — 59,076 — Accrued interest payable 24,738 24,738 — 24,738 — Off-balance-sheet instruments * — 139 — 139 — December 31, 2024 Assets: Cash and due from banks $ 76,837 $ 76,837 $ 76,837 $ — $ — Federal funds sold and interest bearing deposits with other banks 47,989 47,989 47,989 — — Other investments 23,855 23,855 23,855 — — Loans and leases, net of allowance for loan and lease losses 6,699,268 6,608,109 — — 6,608,109 Accrued interest receivable 32,790 32,790 — 32,790 — Liabilities: Deposits $ 7,230,035 $ 7,226,239 $ 5,440,309 $ 1,785,930 $ — Short-term borrowings 249,198 249,198 74,198 175,000 — Long-term debt and mandatorily redeemable securities 39,156 38,784 — 38,784 — Subordinated notes 58,764 56,903 — 56,903 — Accrued interest payable 36,494 36,494 — 36,494 — Off-balance-sheet instruments * — 144 — 144 — * Represents estimated cash outflows required to currently settle the obligations at current market rates. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. These estimates are subjective in nature and require considerable judgment to interpret market data. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange, nor are they intended to represent the fair value of the Company as a whole. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The fair value estimates presented herein are based on pertinent information available to management as of the respective balance sheet date. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein. Other significant assets, such as premises and equipment, other assets, and liabilities not defined as financial instruments, are not included in the above disclosures. Also, the fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. Note 22 — Segment Information The Company has one reportable operating segment, commercial banking. While our chief operating decision maker monitors revenue streams of various products and services, the identifiable segments’ operations are managed, and financial performance is evaluated on a company-wide basis. The commercial banking segment provides a broad array of financial products and services including commercial and consumer banking services, trust and wealth advisory services, and insurance to individual and business clients through most of its 78 banking center locations in 19 counties in Indiana and Michigan and Sarasota County in Florida. 84 Table of Contents The accounting policies of the commercial banking segment are the same as those described in Note 1 of the Notes to Consolidated Financial Statements. The chief operating decision maker assesses performance for the commercial banking segment and decides how to allocate resources based on net income available to common shareholders which is also reported on the Consolidated Statements of Income as net income available to common shareholders. The measure of segment assets is reported on the Consolidated Statements of Financial Condition as total assets. The chief operating decision maker uses net income available to common shareholders to evaluate income generated from segment assets in deciding whether to reinvest profits into the commercial banking segment, pay dividends, or fund acquisitions. Net income available to common shareholders is also used by the chief operating decision maker to monitor budget versus actual results. Net income available to common shareholders as well as other common company-wide financial performance and credit quality metrics such as earnings per common share and net interest margin, among others, are used for competitive analysis by benchmarking to the Company’s competitors as well as used in assessing the performance of the segment and for establishing management’s compensation. See the Consolidated Statements of Financial Condition, the Consolidated Statements of Income, the Consolidated Statements of Comprehensive Income (Loss), the Consolidated Statements of Shareholders’ Equity, and the Consolidated Statements of Cash Flows. The Company’s chief operating decision maker is the Strategic Deployment Committee which includes the Executive Chairman of the Board, the President and Chief Executive Officer, the President of 1st Source Bank, the Chief Financial Officer, and several Group/Division Heads that report directly to the Chief Executive Officer or the President of 1st Source Bank. Note 23 — 1st Source Corporation (Parent Company Only) Financial Information STATEMENTS OF FINANCIAL CONDITION December 31 (Dollars in thousands) 2025 2024 ASSETS Cash and cash equivalents $ 144,693 $ 126,889 Short-term investments with bank subsidiary 500 500 Investments in: Bank subsidiaries 1,218,532 1,068,478 Non-bank subsidiaries 1 1 Right of use assets 11,116 12,552 Other assets 6,273 6,500 Total assets $ 1,381,115 $ 1,214,920 LIABILITIES AND SHAREHOLDERS’ EQUITY Long-term debt and mandatorily redeemable securities $ 33,071 $ 29,156 Subordinated notes 58,764 58,764 Operating lease liability 7,555 9,682 Other liabilities 6,754 6,250 Total liabilities 106,144 103,852 Total shareholders’ equity 1,274,971 1,111,068 Total liabilities and shareholders’ equity $ 1,381,115 $ 1,214,920 85 Table of Contents STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year Ended December 31 (Dollars in thousands) 2025 2024 2023 Income: Dividends from bank subsidiary $ 68,465 $ 55,223 $ 50,152 Rental income from subsidiaries 1,961 1,961 1,832 Investment securities and other investment gains 116 124 261 Other 332 307 239 Total income 70,874 57,615 52,484 Expenses: Interest on subordinated notes 4,033 4,217 4,174 Interest on long-term debt and mandatorily redeemable securities 4,585 3,008 3,606 Interest on commercial paper and other short-term borrowings — — 2 Occupancy 1,826 1,826 1,718 Other 1,049 926 917 Total expenses 11,493 9,977 10,417 Income before income tax benefit and equity in undistributed income of subsidiaries 59,381 47,638 42,067 Income tax benefit 1,296 1,287 1,246 Income before equity in undistributed income of subsidiaries 60,677 48,925 43,313 Equity in undistributed income of subsidiaries: Bank subsidiaries 97,582 83,693 81,621 Net income $ 158,259 $ 132,618 $ 124,934 Comprehensive income (loss) $ 210,714 $ 151,709 $ 166,301 86 Table of Contents STATEMENTS OF CASH FLOWS Year Ended December 31 (Dollars in thousands) 2025 2024 2023 Operating activities: Net income $ 158,259 $ 132,618 $ 124,934 Adjustments to reconcile net income to net cash provided by operating activities: Equity (undistributed) distributed in excess of income of subsidiaries ( 97,582 ) ( 83,693 ) ( 81,621 ) Amortization of right of use assets 1,436 1,343 1,354 Stock-based compensation 152 142 152 Realized/unrealized investment securities and other investment gains ( 116 ) ( 124 ) ( 261 ) Other 3,505 1,326 2,863 Net change in operating activities 65,654 51,612 47,421 Investing activities: Net change in partnership investments ( 90 ) 260 ( 246 ) Net change in investing activities ( 90 ) 260 ( 246 ) Financing activities: Net change in commercial paper — — ( 3,096 ) Proceeds from issuance of long-term debt and mandatorily redeemable securities 2,739 2,374 1,908 Payments on long-term debt and mandatorily redeemable securities ( 2,402 ) ( 1,884 ) ( 2,887 ) Stock issued under stock purchase plans 133 153 78 Net proceeds from issuance of treasury stock 4,070 4,059 3,576 Acquisition of treasury stock ( 13,870 ) ( 178 ) ( 12,469 ) Cash dividends paid on common stock ( 38,430 ) ( 35,396 ) ( 33,074 ) Net change in financing activities ( 47,760 ) ( 30,872 ) ( 45,964 ) Net change in cash and cash equivalents 17,804 21,000 1,211 Cash and cash equivalents, beginning of year 126,889 105,889 104,678 Cash and cash equivalents, end of year $ 144,693 $ 126,889 $ 105,889 87 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None