1st Source (SRCE) DIvidends Date & History

Key Takeaways

• Dividend yield: SRCE offers a dividend yield of roughly 2%, modest but supported by a long track record of increases.
• Dividend growth streak: 1st Source has raised its dividend for 38 consecutive years, a hallmark of consistency among regional banks.
• Payout ratio: At approximately 25% of earnings, the payout leaves ample room for future growth and financial flexibility.
• Payment frequency: Dividends are paid quarterly, with a recent quarterly rate of $0.40 per share.
• Investor appeal: The stock is best suited to dividend growth and long-term investors rather than those seeking a high current yield.

Dividend Overview

1st Source Corporation, the Indiana-based holding company for 1st Source Bank, is a well-established regional financial institution with a disciplined, shareholder-friendly dividend policy. The company pays a quarterly dividend that recently stood at $0.40 per share, translating to an annualized payout in the range of $1.60 to $1.68 per share and a dividend yield near 2%. While this yield is not among the highest in the banking sector, 1st Source distinguishes itself through consistency: it has increased its dividend for 38 straight years, a streak that places it among the most dependable dividend payers in the regional banking space. Rather than being classified as a high-yield stock, SRCE is best understood as a dividend growth stock, pairing a moderate yield with steadily rising payouts and a conservative capital structure.

Dividend History and Growth

1st Source's dividend history reflects a long-term commitment to returning capital to shareholders. The board has raised the cash dividend every year for 38 consecutive years, a remarkably consistent record for a regional bank. In recent years, increases have been steady and predictable: quarterly payments climbed from $0.32 per share in 2022–2023 to $0.34 in 2024, $0.36 to $0.38 in 2025, and $0.40 in late 2025, with further upward adjustments reported in 2026. Over the past five years, the dividend has grown at an average annual rate of roughly 5–6%, while the trailing ten-year compound growth rate is approximately 8.5%. This pattern of small but reliable annual increases—rather than sporadic or aggressive hikes—underscores a conservative approach that prioritizes sustainability and long-term shareholder value.

Dividend Sustainability and Payout Ratio

The dividend appears highly sustainable. 1st Source maintains a payout ratio of roughly 25% of trailing earnings, meaning the company retains about three-quarters of its profits for growth, reserves, and risk management. This is well below the median for the banking industry and leaves significant cushion to absorb earnings fluctuations or economic downturns. Dividend coverage also remains strong on a free cash flow basis, with cash-flow payout ratios in the low-to-mid 20% range. As a regional bank, 1st Source's dividend is further supported by disciplined credit management and a conservative balance sheet, which help protect earnings and capital during softer credit cycles. The combination of a low payout ratio, solid earnings coverage, and a long growth streak suggests the dividend is both safe and capable of continuing its upward trajectory.

Dividend Compared to Industry Peers

Relative to its peer group, 1st Source's dividend profile reflects quality over quantity. Its yield of roughly 2% sits somewhat below the broader Midwest regional-bank average of about 2.7%, but it compares favorably with the S&P 500's yield of approximately 1.4%. More importantly, SRCE stands out on dividend longevity: its 38-year streak of increases far exceeds the typical track record of most financial-sector peers. Many regional banks pay higher yields, but few combine a payout ratio this conservative with such an extended history of annual increases. In short, 1st Source offers a lower current yield than some competitors, but its reliability and growth record make its dividend profile among the more durable in its segment.

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Is This Stock Attractive for Dividend Investors?

1st Source Corporation is most attractive to dividend growth investors and long-term, conservative investors who value consistency and safety over maximum current income. Its roughly 2% yield is modest, so it may not satisfy investors seeking immediate high cash flow. However, the 38-year streak of dividend increases, the low payout ratio, and the steady single-to-mid-digit annual growth rate make it a compelling candidate for those building a compounding income stream over time. The stock may also appeal to investors who prefer regionally focused banks with disciplined capital management. On the other hand, yield-focused investors—particularly retirees needing higher immediate income—may find the payout insufficient relative to higher-yielding alternatives. As with any regional bank, prospective investors should consider broader economic and interest-rate conditions that can influence bank earnings. Overall, SRCE represents a quality-over-yield dividend profile well suited to patient, growth-oriented investors.

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