1ST SOURCE CORPSRCE

1ST SOURCE CORP Debt Disclosure

10-KFiled Feb 17, 20262 min read
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) 20252024
Federal Home Loan Bank borrowings (1.04%)
$10,000 $10,000 
Mandatorily redeemable securities27,783 22,073 
Other long-term debt5,547 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.
 20252024
(Dollars in thousands) AmountWeighted Average RateAmountWeighted Average Rate
Federal funds purchased$50,000 3.68 %$— — %
Securities sold under agreements to repurchase62,470 0.73 72,346 1.15 
Federal Home Loan Bank advances125,000 3.79 75,000 4.50 
Federal Reserve advances— — 100,000 4.76 
Other short-term borrowings1,151 — 1,852 — 
Total short-term borrowings$238,621 2.94 %$249,198 3.60 %

Historical Timeline

Fiscal YearFiled
2025Feb 17, 2026Showing above
2024Feb 18, 2025
2023Feb 20, 2024
2022Feb 16, 2023
2021Feb 17, 2022

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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