Regional banking company 1st Source (NASDAQ:SRCE) reported Q2 CY2026 results exceeding the market’s revenue expectations, with sales up 8% year on year to $118.2 million. Its GAAP profit of $1.95 per share was 13.8% above analysts’ consensus estimates.
Is now the time to buy 1st Source? Find out by accessing our full research report, it’s free.
1st Source (SRCE) Q2 CY2026 Highlights:
- Net Interest Income: $93.14 million vs analyst estimates of $91.47 million (9.3% year-on-year growth, 1.8% beat)
- Net Interest Margin: 4.2% vs analyst estimates of 4.2% (2.3 basis point beat)
- Revenue: $118.2 million vs analyst estimates of $114.2 million (8% year-on-year growth, 3.5% beat)
- Efficiency Ratio: 46.6% vs analyst estimates of 48.5% (189.7 basis point beat)
- EPS (GAAP): $1.95 vs analyst estimates of $1.71 (13.8% beat)
- Tangible Book Value per Share: $50.93 vs analyst estimates of $52.01 (12.1% year-on-year growth, 2.1% miss)
- Market Capitalization: $1.99 billion
Company Overview
Tracing its roots back to 1863 during the Civil War era, 1st Source Corporation (NASDAQ:SRCE) is a regional bank holding company that provides commercial, consumer, specialty finance, and wealth management services across Indiana, Michigan, and Florida.
Sales Growth
Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Unfortunately, 1st Source’s 6.4% annualized revenue growth over the last five years was tepid. This wasn’t a great result compared to the rest of the banking sector, but there are still things to like about 1st Source.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. 1st Source’s annualized revenue growth of 10.3% over the last two years is above its five-year trend, suggesting some bright spots. 
Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, 1st Source reported year-on-year revenue growth of 8%, and its $118.2 million of revenue exceeded Wall Street’s estimates by 3.5%.
Net interest income made up 75.9% of the company’s total revenue during the last five years, meaning lending operations are 1st Source’s largest source of revenue.
Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
Tangible Book Value Per Share (TBVPS)
Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.
This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.
1st Source’s TBVPS grew at an exceptional 9.3% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 14% annually over the last two years from $39.16 to $50.93 per share.
Over the next 12 months, Consensus estimates call for 1st Source’s TBVPS to grow by 12% to $57.02, mediocre growth rate.
Key Takeaways from 1st Source’s Q2 Results
We enjoyed seeing 1st Source beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its tangible book value per share missed. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $83.19 immediately following the results.
So do we think 1st Source is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).