1st Source (SRCE) DIvidends Date & History

Key Takeaways

• 1st Source Corporation (SRCE) has raised its dividend for 38 consecutive years, making it a Dividend Champion with one of the longest growth streaks among U.S. regional banks.
• The annual forward dividend stands at approximately $1.72 per share, yielding around 2.1% to 2.4% — above the financial sector average but modest compared to high-yield alternatives.
• The dividend payout ratio hovers near 24% to 26% of earnings, indicating ample room for continued dividend growth and strong coverage from net income and free cash flow.
• Dividends are paid quarterly, with the most recent increase to $0.43 per share declared in April 2026, reflecting an 11% year-over-year hike from the prior $0.38 quarterly rate.
• The bank's conservative capital management, improving net interest margins, and diversified loan portfolio support long-term dividend sustainability.
• SRCE is best suited for dividend growth and long-term income investors rather than those seeking outsized current yield.

Dividend Overview

1st Source Corporation (SRCE), a South Bend, Indiana-based regional bank holding company with roots dating back to 1863, has established itself as one of the most consistent dividend payers in the U.S. banking sector. The company pays a quarterly cash dividend, currently at $0.43 per share following the most recent increase declared in April 2026. On a forward annualized basis, that equates to approximately $1.72 per share and a dividend yield in the 2.1% to 2.4% range, depending on share price fluctuations. 1st Source is not a high-yield stock in the traditional sense; rather, it is best categorized as a dividend growth stock — one that prioritizes steady, reliable annual increases over maximizing current income. The most recent ex-dividend date was May 5, 2026, with payment made on May 15, 2026. The next ex-dividend date is expected in early August 2026, consistent with the company's long-established quarterly cycle.

Dividend History and Growth

1st Source Corporation's dividend track record is exceptional by any standard. The company has increased its annual dividend for 38 consecutive years, a streak that places it among the elite Dividend Champions — a designation reserved for companies with at least 25 years of uninterrupted dividend growth. Over the past five years, the dividend has grown at a compound annual rate of approximately 6% to 7%, comfortably outpacing inflation. The quarterly payout has risen steadily from $0.28 per share in 2020 to $0.43 per share in 2026, reflecting management's confidence in the bank's earnings power. Notably, 1st Source maintained and grew its dividend through the COVID-19 pandemic without interruption, a testament to its conservative capital allocation and resilient business model. The bank has never reduced its dividend in over four decades of payments. Each increase tends to be announced in the first half of the year, with the quarterly rate then held steady across the remaining payments.

Dividend Sustainability and Payout Ratio

The sustainability of 1st Source's dividend is reinforced by one of the most conservative payout ratios in the regional banking industry. Based on trailing twelve-month earnings per share (EPS) of approximately $6.52, the payout ratio sits at roughly 24% to 26% — meaning the bank retains about three-quarters of its earnings for reinvestment, balance sheet strengthening, and share buybacks. The free cash flow payout ratio is even lower at approximately 19% to 25%, underscoring the dividend's strong cash flow coverage. Operating cash flow of roughly $210 million (trailing twelve months as of early 2026) covered annual dividend obligations of approximately $39 million many times over. Additionally, 1st Source maintains robust capital ratios: a Common Equity Tier 1 (CET1) ratio above 14% and a common equity-to-assets ratio exceeding 13%, well above regulatory requirements. The bank's improving net interest margin — which expanded for seven consecutive quarters through late 2025 — provides further tailwind for earnings and, by extension, dividend capacity.

Dividend Compared to Industry Peers

Within the regional banking sector, 1st Source's dividend profile stands out for its longevity and reliability rather than its yield. The financial sector average dividend yield is approximately 1.3%, meaning SRCE's 2.1% to 2.4% yield is notably above the sector baseline. However, compared to other regional banks such as ONB (Old National Bancorp), LKFN (Lakeland Financial), or GABC (German American Bancorp), SRCE's yield is roughly in the middle of the pack — some peers offer higher yields above 3% or 4%, but few can match SRCE's 38-year growth streak. The bank's payout ratio of roughly 25% is also well below the regional bank industry median of approximately 32%, giving SRCE significantly more headroom for future dividend increases than many of its competitors. The combination of above-sector-average yield, industry-leading dividend longevity, and a below-peer payout ratio makes SRCE a compelling proposition in the regional bank dividend landscape.

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Is This Stock Attractive for Dividend Investors?

1st Source Corporation is best suited for dividend growth investors and long-term, conservative income investors who prioritize reliability and compounding over maximizing current yield. The bank's 38-year dividend growth streak and exceptionally low payout ratio make it an attractive holding for those building a portfolio of steadily rising income streams. The stock's relatively low beta (approximately 0.66 to 0.68) suggests lower volatility than the broader market, which may appeal to risk-averse investors. However, SRCE is less suitable for investors seeking high current income, as its 2%-plus yield trails many higher-yielding alternatives in sectors such as energy, real estate, or telecommunications. Additionally, as a regional bank with exposure to commercial real estate and specialty lending — including aircraft and construction equipment finance — SRCE carries sector-specific risks tied to credit cycles and interest rate fluctuations. While credit quality metrics showed some deterioration in mid-2025 before improving later in the year, the bank's conservative underwriting and strong allowance for loan losses provide meaningful buffers. Ultimately, SRCE fits well within a diversified dividend growth portfolio, particularly for investors who value consistency, modest but rising income, and a management team with a demonstrated commitment to returning capital to shareholders.

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