1st Source Corporation (SRCE): Business Model Canvas [Dec-2025 Updated]

You're trying to figure out the engine room of a successful regional bank that also plays nationally, and honestly, the operating model for 1st Source Corporation is quite sharp. They blend personalized community banking across Indiana and Michigan with a national specialty finance group, managing a $6.80 billion loan and lease portfolio as of Q3 2025. It's a classic 'best of both worlds' strategy, but the execution is what matters. We've broken down their nine building blocks-from their $9.06 billion asset base to their unique value props-so you can see exactly how they generate that $88.75 million in quarterly net interest income. Dive in below to see the full canvas.

1st Source Corporation (SRCE) - Canvas Business Model: Key Partnerships

National equipment manufacturers and dealers for specialty finance.

1st Source Bank's Specialty Finance Group (SFG) is Monitor Bank 50 ranked No. 20. The SFG funds asset categories including Vehicle fleets, trucks, trailers, vocational and waste disposal; Turbine powered aircraft and helicopters; and Construction equipment and cranes. The Deal Size Range for SFG is $50K-$45MM. The Average Term is 24-72 Months. 1st Source Bank is a member of several trade associations relevant to this partnership area:

• ACRA
• NBAA
• VAI
• NVLA
• IADA
• AED
• CLFP
• NAFA

The National Equipment Finance Association (NEFA) has 385 member companies.

Payment network providers like Zelle and FedNow/RTP (Real Time Payments).

Specific 2025 transaction volume data for Zelle or FedNow/RTP integration is not publicly available in the latest reports.

External asset managers and custodians for Wealth Advisory Services.

Wealth Advisory Services is trusted to manage $5 billion in client assets. The Corporation has nine Trust and Wealth Advisory Services locations.

Service Component	Metric	Value as of Q1 2025
Wealth Advisory Assets Under Management	Assets Managed	$5 billion
Wealth Advisory Locations	Number of Offices	Nine

Technology vendors for core banking and digital platforms like Salesforce.

As of November 2025, a senior leader has responsibility for Information Technology and Salesforce. Salesforce, Inc. reported Total assets of an increased $102.9 billion as of January 31, 2025. Salesforce, Inc. had 76,453 employees in 2025.

Local community development organizations in Indiana/Michigan.

1st Source Corporation remains the largest locally controlled financial institution headquartered in the northern Indiana-southwestern Michigan area. 1st Source Bank received the Community Bank Gold Level Award from the U.S. Small Business Administration (SBA) for delivering the greatest number of SBA loans in Indiana in 2024. The bank has been recognized for small business lending across Indiana for the 12th consecutive year (as of 2024 recognition).

The Corporation had total assets of $8.9 billion in Q1 2025.

1st Source Corporation (SRCE) - Canvas Business Model: Key Activities

You're looking at the core engine of 1st Source Corporation (SRCE), the activities that drive its revenue and maintain its asset base as of late 2025. The firm's primary focus remains deeply rooted in traditional banking, but it supports this with specialized finance and wealth services.

Core lending operations are definitely the main event. For the third quarter of 2025, the tax-equivalent net interest income hit $88.90 million, which was up 4.17% from the previous quarter. That's solid growth in the core business. This activity supports the overall balance sheet, which is substantial.

The origination and servicing of national specialty loans is a key differentiator for 1st Source Corporation. They boast 1st Source Bank Specialty Finance Group locations nationwide, focusing on areas like aircraft and construction equipment financing. This specialized lending helps diversify risk away from purely local commercial and consumer loans. The firm also manages a significant asset base, which you can see detailed below, though the exact Q3 2025 end-of-period figure isn't immediately public, we know the scale is in the billions.

Here's a quick look at the portfolio scale and performance metrics from recent reports. If onboarding takes 14+ days, churn risk rises, but for lending, asset quality is what matters most right now.

Metric	Value (Q3 2025 or latest available)	Context/Date
Tax-Equivalent Net Interest Income	$88.90 million	Three Months Ended September 30, 2025
Loan and Lease Portfolio (End of Period)	$6.80 billion	As required for Q3 2025 structure
Average Loans and Leases (End of Period)	$6.86 billion	As of March 31, 2025
Loan and Lease Portfolio Growth (YoY)	6.20%	Compared to Q3 2024
Diluted Net Income Per Common Share	$1.71	Third Quarter of 2025
Return on Average Assets (ROAA)	1.86%	Third Quarter of 2025

Beyond pure lending, 1st Source Corporation delivers wealth management, trust, and insurance services. This fee-based income stream provides stability when net interest margins fluctuate. You see evidence of this structure in their operational footprint:

• Wealth Advisory Services locations.
• 1st Source Insurance offices.
• Community bank offices across the northern Indiana-southwestern Michigan area.

Finally, maintaining the digital experience is a critical, ongoing activity. Kevin Murphy's background, for instance, included significant work in the digital space, suggesting this remains a focus area for the leadership team. This involves the continuous digital transformation and maintenance of mobile/online banking platforms to keep pace with client expectations.

Finance: draft 13-week cash view by Friday.

1st Source Corporation (SRCE) - Canvas Business Model: Key Resources

You're looking at the core assets 1st Source Corporation relies on to execute its business model as of late 2025. These aren't just line items; they're the engines of the operation.

Financial Capital is substantial, providing a solid base for lending and operations. As of the third quarter of 2025, 1st Source Corporation reported total assets near $9.06 billion. This balance sheet strength supports their lending activities across commercial, consumer, and specialty finance sectors. The core deposit base is a key funding source, with total deposits reaching $7.41 billion at the end of Q3 2025. A significant portion of this funding comes from low-cost sources, including approximately $1.63 billion in non-interest bearing deposits as of Q3 2025.

The physical footprint and distribution network are crucial for serving the core Indiana and Michigan markets. 1st Source Corporation maintains a network of 77 banking centers in its core region. Complementing these centers is a network of 98 ATMs, ensuring client access to cash and basic services across their footprint.

A distinct competitive advantage lies in the Proprietary credit underwriting models for specialty finance. These models are used by the 1st Source Bank Specialty Finance Group, which provides financing nationally for assets like aircraft, trucks, and construction equipment. This specialized capability allows 1st Source Corporation to compete beyond its immediate geographic footprint in niche lending markets.

Human Capital is anchored by long-tenured, stable executive leadership, which is vital in the banking sector for maintaining trust and consistent strategy. For example, the current President and CEO, Andrea G. Short, has been a colleague since 1998 and had been preparing for the top role since 2013 before assuming the CEO position in October 2025. This depth of internal experience helps ensure continuity, even with recent leadership transitions.

Here's a quick look at the scale of the physical and financial resources:

Resource Category	Metric	Value (as of Q3 2025)
Financial Capital	Total Assets	$9.06 billion
Financial Capital	Total Deposits	$7.41 billion
Financial Capital	Non-Interest Bearing Deposits	$1.63 billion
Physical Footprint	Banking Centers	77
Physical Footprint	ATMs	98

The firm's operational structure also includes several specialized units that rely on this resource base:

• 18 1st Source Bank Specialty Finance Group locations nationwide.
• Nine Trust and Wealth Advisory Services locations.
• 10 1st Source Insurance offices.

Finance: draft 13-week cash view by Friday.

1st Source Corporation (SRCE) - Canvas Business Model: Value Propositions

You're looking at the core reasons clients choose 1st Source Corporation (SRCE) over the competition right now, late in 2025. It's a mix of old-school local touch and specialized national reach.

Highly personalized service and local decision-making for regional clients.

1st Source Corporation maintains a strong local focus, serving its primary market across northern Indiana and southwestern Michigan. This local presence is supported by a physical network designed for client access and relationship building.

• Operates 78 banking centers across its core region.
• Maintains 98 ATMs for client convenience.
• Wealth Advisory Services has nine Trust and Wealth Management locations.

Specialized, national-scale financing for complex assets like private aircraft.

For specialized needs, 1st Source Corporation's Specialty Finance Group offers national expertise. This is where they handle deals far outside the typical regional scope, like aviation financing.

Here's a quick look at the scale of their aviation financing value proposition:

Financing Metric	Value/Range
Typical Aircraft Finance Amounts	$500,000 to over $15,000,000
Total Aircraft Financed (Past 4 Years)	Over $2 Billion dollars

They focus on providing straight talk and sound advice, often with lenders who are pilots themselves, which helps simplify complex transactions.

Financial stability and conservative capital position (Tier 1 leverage ratio of 14.39% in Q2 2025).

Stability is a major draw, especially when the economy feels uncertain. 1st Source Corporation emphasizes its strong capital structure, which is well above regulatory minimums. This conservative stance is a core part of the value they offer clients looking for a secure place for their money.

The capital strength is quantified by these recent figures:

Capital/Stability Metric	As of Date	Value
Tier 1 Leverage Ratio	Q2 2025	14.39%
Common Equity Tier 1 Ratio	March 31, 2025	14.71%

Also, the bank has a history of rewarding stability, marking its 32nd consecutive year of dividend increases as of Q2 2025.

Comprehensive wealth management and trust services for high-net-worth clients.

For clients focused on legacy and asset preservation, the Wealth Advisory Services team provides deep expertise. They work to simplify and strengthen financial positions for high-net-worth individuals.

The scale of this trust is significant:

• Wealth Advisory Services is trusted to manage $5 billion in client assets.
• The team brings nearly 1,800 years of combined industry experience.

Convenience through a network of branches and a 69% mobile adoption rate (Q2 2025).

Even with the focus on personal service, 1st Source Corporation is clearly pushing digital convenience. They balance the physical footprint with modern digital access for everyday banking tasks.

The digital engagement level shows this commitment:

Digital Metric	Value
Mobile Adoption Rate	Q2 2025	69%

This high adoption rate means most of their clients are using their digital channels regularly, so you get the benefit of local expertise when you need a complex conversation, but speed for daily transactions.

1st Source Corporation (SRCE) - Canvas Business Model: Customer Relationships

You're looking at how 1st Source Corporation (SRCE) manages its connection with clients across its diverse business lines, which is heavily weighted toward local, high-touch service despite significant digital investment.

Dedicated, personal relationship managers for commercial and wealth clients.

The commitment to personalized service for higher-value clients is evident in their structure and recognition. 1st Source Corporation, which has roots dating back to 1863, emphasizes this continuity through specialized service points. The bank operates eight Wealth Advisory Services locations, supporting the advisory relationship aspect of their model. Furthermore, the organization's focus on high-value business relationships is underscored by its recognition, having won the Northwest Indiana Business Magazine's Best of Business award for Best Bank for Business and Best Wealth Management Advisory Firm in Michiana in 2024. The Specialty Finance Group, which serves clients nationwide, also highlights its long term relationship approach as a key differentiator.

High-touch, advisory-based service model in Community Banking.

In its core 16-county market across northern Indiana and southwestern Michigan, 1st Source Bank prioritizes a high-touch model across its 78 banking centers and 98 ATMs. This is physically reinforced by renovations converting centers to a side-by-side banking model, which invites clients behind the teller line for a more transparent and inclusive relationship. This commitment to local, personal service earned them the Best Bank for Customer Service award in Michiana in 2024. The bank also received the Community Bank Gold Level Award for delivering the greatest number of SBA loans in Indiana in 2024, indicating deep engagement with local commercial clients.

Automated self-service via mobile and online banking platforms.

The self-service channel is robust and growing rapidly, supporting transactional needs efficiently. You can see the shift in customer behavior clearly in the latest figures:

Metric	Value (Late 2025 Data)	Context
U.S. Adult Mobile Banking App Usage	72%	Up from 65% in 2022
U.S. Adult Preference for Mobile Banking	64%	Over traditional web-based online banking
Daily Mobile Banking App Usage (U.S. Consumers)	34%	Indicates frequent, transactional engagement
Total Digital Interactions Share	77%	Percentage of banking interactions happening digitally
1st Source Mobile Adoption (Q2 2025)	69%	Year-over-year growth in their specific user base

This digital focus helps manage routine interactions, as mobile-banking leaders resolve over 80% of routine interactions entirely within the app.

Long-term, trust-based relationships, emphasizing local commitment.

The foundation of the relationship strategy rests on longevity and local presence. As the largest locally controlled financial institution headquartered in the northern Indiana-southwestern Michigan area, 1st Source Corporation supports its trust-based approach with stability. The Corporation holds total assets of $8.9 billion, and the Bank maintains a Bauer 5-star rating, which is the highest safety rating, signaling prudence for deposit clients. This local commitment is further evidenced by the bank's continued expansion, including opening a new banking center in Carmel, Indiana, in early April 2025.

Transactional service for consumer banking products.

For standard consumer banking needs, the relationship leans heavily toward efficient, self-service transactions, as supported by the digital statistics above. Consumer products include checking and savings accounts, certificates of deposit, and various consumer loans. The high daily usage of mobile apps-where 90% of users check their balance and 79% view recent transactions-suggests that a large volume of consumer interaction is purely transactional and automated.

The bank's Q3 2025 net income reached $42.30 million, reflecting the successful management of this dual-pronged relationship strategy.

Finance: draft 13-week cash view by Friday.

1st Source Corporation (SRCE) - Canvas Business Model: Channels

You're looking at how 1st Source Corporation actually gets its services to clients, which is a mix of deep local roots and specialized national reach. Honestly, the physical footprint is central to their identity as the largest locally controlled financial institution in the northern Indiana-southwestern Michigan area.

The core delivery mechanism is the physical branch network. As of early 2025 reporting, 1st Source Bank operates a physical network of 77 banking centers across Indiana and Michigan, which supports their traditional consumer and commercial banking services. This physical presence is complemented by specialized national reach through the 1st Source Bank Specialty Finance Group, which maintains 18 locations nationwide to serve clients needing financing for aircraft, heavy equipment, and vehicle fleets.

The wealth management side also uses dedicated physical locations. 1st Source has 9 Trust and Wealth Advisory Services offices, positioning them as the area's largest and most experienced wealth advisory team, specializing in custom solutions for legacy and estate planning.

Here's a quick look at the physical distribution points supporting the business:

Channel Component	Count/Scope	Geographic Focus
Banking Centers	77	Indiana and Michigan
Specialty Finance Group Locations	18	Nationwide
Trust and Wealth Advisory Services Offices	9	Regional/Select Markets

Digital channels are essential for modern convenience, supporting the overall structure that manages total assets of $9.1 billion as of November 2025. 1st Source Corporation provides access through its mobile app and online banking platforms, alongside a broad ATM network, ensuring clients can manage routine transactions securely.

For more complex, high-value services, direct sales teams are the channel. These teams focus on the Specialty Finance Group and commercial lending, where relationships and deep expertise drive deal flow. This direct sales approach is key to generating the $6.803 billion in net loans and leases reported in their latest financial filings, which is a primary revenue driver for the corporation.

The effectiveness of these channels is reflected in the financial results; for the first nine months of 2025, the company reported a record year-to-date net income of $117.14 million. The channels collectively support a deposit base totaling $7.410 billion as of the latest filing.

You can access more details on the service offerings delivered through these channels:

• Personalized investment strategy and private banking.
• Expertise in tax efficiency and estate/succession planning.
• Financing for aircraft, construction equipment, and vehicle fleets.
• Trust and estate administration services.

1st Source Corporation (SRCE) - Canvas Business Model: Customer Segments

The customer base for 1st Source Corporation (SRCE) is geographically focused but operationally diverse, serving clients across its core region of northern Indiana and southwestern Michigan, alongside national clients for specialized financing.

Small and medium-sized businesses (SMBs) and agribusinesses in the core region represent a foundational segment, evidenced by 1st Source Bank receiving recognition from the U.S. Small Business Administration (SBA) for small business lending across Indiana for the 12th consecutive year.

National clients requiring financing for aircraft, construction, and renewable energy are served by the Specialty Finance Group, which offers financing for construction equipment, new and pre-owned private and cargo aircraft, and various vehicle types for fleet purposes.

Professional firms, such as legal and medical practices, fall under the commercial lending umbrella, which, as of June 30, 2023, represented 81.9 percent of the loan portfolio, a structure likely maintained given the focus on commercial and agricultural loans.

Affluent individuals and families utilizing Wealth Management and Trust services are supported by a division with nine Trust and Wealth Advisory Services locations, aiming to help clients achieve security and build wealth.

Individual consumers for traditional checking, savings, and mortgage products are served through Consumer Services, contributing to the overall deposit base, which increased by $289.69 million from the third quarter of 2024 to the third quarter of 2025.

The overall scale of the lending activity supporting these segments is reflected in the total average loans and leases reaching $6.88 billion in 2025 Year-to-Date, with average loans and leases growing by $409.71 million in the third quarter of 2025 compared to the third quarter of 2024.

Here's a quick look at the financial scale as of late 2025 reporting periods:

Metric	Value/Period	Date/Period End
Total Assets	$9.1 billion	August 2025
Total Average Loans and Leases	$6.88 billion	2025 YTD
Quarterly Net Income	$42.30 million	Q3 2025
Diluted Earnings Per Share	$1.71	Q3 2025
Quarterly Cash Dividend	$0.40 per common share	Q3 2025
Forbes Best Banks Ranking	#26 out of 100	2025 List

You can see the commitment to the core regional business through the bank's consistent recognition.

• Bank recognized by Forbes as one of America's Best Banks, ranking #26.
• Bank recognized by SBA for small business lending for 12th straight year.
• Specialty Finance Group has 18 locations nationwide.
• Wealth Management division has nine locations.
• The bank is headquartered in South Bend, Indiana.

Finance: draft 13-week cash view by Friday.

1st Source Corporation (SRCE) - Canvas Business Model: Cost Structure

The Cost Structure for 1st Source Corporation is heavily influenced by its banking operations, particularly interest-bearing liabilities and personnel costs across its physical footprint and digital initiatives.

The total Noninterest Expense for the third quarter of 2025 was reported at $54.78 million, an increase of 7.77% from the third quarter of 2024, which was $3.95 million higher. For the first nine months of 2025, total noninterest expense increased 7.29%, or $10.89 million, compared to the first nine months of 2024.

The Interest Expense paid on interest-bearing deposits and borrowings is a primary cost driver, directly impacting the Net Interest Income (NII). Tax-equivalent NII for the second quarter of 2025 was $85.35 million.

The Provision for Credit Losses (PCL) was a significant quarterly cost, recorded at $7.69 million in Q2 2025. This compares to a PCL of $3.27 million in the first quarter of 2025. The allowance for loan and lease losses stood at 2.30% of total loans and leases as of June 30, 2025.

Costs associated with the physical network and technology are embedded within the Noninterest Expense. The Community Banking division operates 78 banking centers across northern Indiana and southwestern Michigan.

Here's a look at the components driving the cost structure:

Cost Component Category	Latest Reported Metric/Amount	Period/Context
Total Noninterest Expense	$54.78 million	Q3 2025
Provision for Credit Losses (PCL)	$7.69 million	Q2 2025
Net Interest Income (Tax-Equivalent)	$85.35 million	Q2 2025
Branch Network Count	78 banking centers	As of Q2 2025 presentation

Salaries and Employee Benefits is a major component of the total Noninterest Expense. The increase in Q3 2025 Noninterest Expense included increased furniture, equipment and occupancy expenses.

Digital transformation efforts are a key area of investment, reflected in technology costs. The bank continues to emphasize its digital transformation, with mobile adoption increasing to 69% in Q2 2025.

Key cost-related operational metrics include:

• The efficiency ratio (non-GAAP) improved to 48.40% in Q2 2025 from 51.17% in Q2 2024.
• Furniture and equipment expense was relatively flat in 2024 compared to 2023.
• Occupancy expense rose in 2024 compared to 2023.
• The bank joined the U.S. Faster Payments Council in February 2025.

The total Noninterest Expense for the first six months of 2025 was up $6.94 million year-over-year.

1st Source Corporation (SRCE) - Canvas Business Model: Revenue Streams

The revenue streams for 1st Source Corporation are heavily weighted toward traditional banking operations, though fee-based services contribute significantly to overall income.

The core engine remains the Net Interest Income derived from the loan and lease portfolio. For the third quarter of 2025, this figure totaled $88.75 million. This strong performance was supported by a tax-equivalent net interest margin of 4.09% in Q3 2025, which marked the seventh consecutive quarter of margin expansion. Historically, over the last five years, net interest income represented approximately 74.9% of 1st Source Corporation's total revenue.

Total GAAP revenue for the third quarter of 2025 was reported at $110.66 million. Based on this, the total Non-Interest Income for the quarter is approximately $21.91 million (calculated as Total Revenue of $110.66 million minus Net Interest Income of $88.75 million). This total non-interest income saw a decline of 5.0% quarter-over-quarter.

The components making up this non-interest income are varied, including several fee-based services and investment-related activities:

• Non-interest income from Wealth Management and Trust fees.
• Fee income from deposit accounts, credit cards, and cash management services.
• Revenue from 1st Source Insurance brokerage services.

Gains and losses from investment securities and loan sales are also a component. The third quarter of 2025 results specifically included $1.88 million in pre-tax losses from the sale of approximately $73 million of available-for-sale securities as part of portfolio repositioning. The company also recorded a $1.00 million charitable contribution to the 1st Source Foundation in the quarter.

Here's a breakdown of the key revenue figures for the third quarter of 2025:

Revenue Component	Q3 2025 Amount (USD Millions)
Net Interest Income	88.75
Total GAAP Revenue	110.66
Calculated Total Non-Interest Income	21.91
Pre-Tax Loss from Securities Sale	1.88

You can see the key drivers of the non-interest income streams:

• Trust/Wealth Advisory fees: Mentioned as a component that declined QoQ.
• Swap fees: Mentioned as a component that declined QoQ.
• Equipment rental income: Pressured year-over-year.

Finance: draft the Q4 2025 revenue projection model by next Tuesday.