1st Source Corporation (SRCE): Marketing Mix Analysis [Dec-2025 Updated]

You're looking at a regional bank that's quietly building serious value by sticking to what works: deep relationships and smart niche lending. As a seasoned analyst, I see 1st Source Corporation navigating the late-2025 landscape by focusing its roughly 79 banking centers in Indiana and Michigan on high-touch service, while pushing specialty financing for things like aircraft and bus fleets. With total assets projected near $9.5 billion for fiscal year 2025, their strategy isn't about chasing national headlines; it's about mastering the local game through targeted product offerings and relationship-driven promotion. Let's break down exactly how their Product, Place, Promotion, and Price mix is keeping them stable and profitable below.

1st Source Corporation (SRCE) - Marketing Mix: Product

You're looking at the core offerings of 1st Source Corporation as of late 2025. The product suite is built around a regional community banking foundation, layered with specialized national finance and wealth management capabilities. Honestly, the product design reflects a dual focus: deep local relationship banking and targeted, high-value specialty lending.

The Community Banking division provides the essential commercial and consumer banking services. This includes the core deposit gathering that supports the balance sheet, with total deposits reaching $7.41 billion as of September 30, 2025. The lending side, which encompasses commercial, agricultural, and real estate loans for privately owned businesses in the regional market, contributed to a total loans and leases portfolio of $6.96 billion at that same date. You can see the strength of their core operations in the Q3 2025 net income of $42.30 million.

For businesses needing cash flow support, treasury management solutions are integral to the commercial offering. This is supported by a solid funding base, where non-interest bearing deposits were approximately $1.63 billion in Q3 2025. Also, the commitment to small business lending remains a key product feature, evidenced by 1st Source Corporation receiving the Community Bank Gold Level Award for delivering the greatest number of SBA loans in Indiana in 2024.

The Specialty Finance Group offers targeted financing products. This includes services for construction equipment, new and pre-owned private and cargo aircraft, and various vehicle types for fleet purposes. It's interesting to note the product mix shift here; while growth was seen in renewable energy and residential real estate lending, there were reported declines in the aircraft and auto portfolios as of the third quarter of 2025, suggesting a recalibration of product emphasis.

For high-net-worth clients, the Wealth Advisory and Trust services are a significant product line. This segment is trusted to manage $5 billion in client assets, delivered through nine Trust and Wealth Management locations. Remember, trust and wealth advisory fees are sensitive to market conditions; the total assets under management directly influence the fee revenue component of their overall product performance.

Digital tools are crucial enhancements to all service lines. The bank continues to push digital adoption, with mobile adoption increasing to 69% in Q2 2025. That's up from 62% just three years prior. This digital layer supports mobile and online account management for both consumer and business clients, which is a necessary feature in today's environment. If onboarding takes 14+ days, churn risk rises, so the focus on digital experience enhancement, a top industry priority at 52%, is key to retaining these digital-first users.

Here's a quick look at the scale of the product delivery platform as of late 2025:

The overall product health is reflected in key performance indicators. The Return on Average Assets (ROAA) for Q3 2025 stood at 1.86%, showing efficient deployment of the assets supporting these services. Furthermore, credit quality, which impacts the perceived value of the loan products, showed improvement, with the ratio of nonperforming assets to loans and leases decreasing to 0.91% by September 30, 2025.

The product design also incorporates physical access points, which is a differentiator in the Midwest market. The company maintains 77 banking centers and 98 ATMs across its primary 16-county market area in northern Indiana and southwestern Michigan. Some of these centers, like the Kouts and Portage Avenue locations, underwent renovations in Q1 2025 to convert to a side-by-side banking model, which is a physical product enhancement designed to invite clients behind the teller line.

The product strategy seems to be about maintaining a broad, high-quality service offering while leaning into specialized, high-margin areas like specialty finance and wealth management. Finance: draft 13-week cash view by Friday.

1st Source Corporation (SRCE) - Marketing Mix: Place

You're looking at how 1st Source Corporation makes its services available to clients, which is all about the physical and digital footprint. For a community-focused bank holding company, the physical network is key, but the national reach of its specialty groups is also a major distribution component.

The core of the physical distribution strategy remains deeply rooted in the local footprint. 1st Source Corporation operates approximately 79 banking centers, which are heavily concentrated across northern Indiana and southwestern Michigan, reinforcing its position as the largest locally controlled financial institution in that area. This network is designed to serve the communities where the bank has grown since its founding in 1863.

The distribution extends well beyond the immediate community banking footprint through specialized services. The Specialty Finance Group (SFG) competes nationally, offering financing for aircraft, trucks, and construction equipment. For its aircraft financing, the scope of geographic activity even includes Brazil, Mexico and Canada. This dual approach-local community banking supported by national specialty finance-defines the Place strategy.

Here's a quick look at the physical distribution network as of mid-to-late 2025, based on the latest available figures:

The commitment to a local, community-based branch presence is evident in the structure, which supports the bank's dominant market share in its 15 contiguous county market area. Still, you can't ignore the digital side, which provides access outside of these physical points. The digital channel adoption is growing; mobile adoption reached 69% in the second quarter of 2025, up from 62% in the second quarter of 2022. This shows a clear push to ensure 24/7 access for clients regardless of branch proximity.

The nerve center for this entire operation remains fixed. The headquarters for 1st Source Corporation is located in South Bend, Indiana. This location anchors the company, which reported total assets of $9.1 billion in mid-2025, supporting the extensive distribution network.

The physical and digital access points are supported by specialized service delivery methods:

• Side-by-Side Retail Banking service at the branch level.
• Online and mobile banking products for transactional needs.
• Specialty Finance Group offices serving national equipment and fleet needs.
• Portfolio purchases and custom structures for specialized financing deals.

1st Source Corporation (SRCE) - Marketing Mix: Promotion

You're looking at how 1st Source Corporation communicates its value proposition, which is heavily weighted toward its established regional footprint and personal touch. This isn't a firm chasing national brand recognition; its promotion is definitely regional, focusing on the communities where it has deep roots.

Relationship banking and personalized service form the bedrock of their communication strategy. This focus is reflected in their operational structure, where they distinguish themselves by offering highly personalized services across commercial and consumer banking, wealth management, and trust solutions. This relationship-driven approach aims to position 1st Source Corporation as a trusted financial partner, not just a service provider.

The commitment to the local area is a key promotional pillar, building trust through tangible actions. 1st Source Corporation maintains a clear commitment to community involvement, supporting regional nonprofit organizations and development initiatives across its service area. This local embedding is crucial, as the company is the largest locally controlled financial institution headquartered in the northern Indiana-southwestern Michigan area. Furthermore, external validation supports this narrative, with 1st Source Bank being named among America's Best Midsize Employers for the Fourth Year (February 27, 2025) and One of America's Best Banks by Forbes (February 4, 2025).

While the emphasis is local, they do engage in targeted outreach, particularly for their specialty finance segments, which have a nationwide presence. You won't see massive national ad buys; instead, the promotional dollars are focused where the client base is concentrated, which includes northern Indiana, southwestern Michigan, and Florida.

For direct marketing, the strategy leans toward nurturing the existing base. This involves direct mail and email campaigns aimed at current customers for cross-selling wealth management or specialized lending products. The success of these efforts is contextualized by the firm's financial performance, such as the record Q3 2025 net income of $42.28 million and the Q1 2025 diluted net income per common share of $1.52, which suggests existing client relationships are performing well.

To give you a sense of the scale of their marketing investment, here are the reported Marketing Expense figures in USD millions from recent filings. Remember, these are total expenses, not just direct advertising spend, so they reflect the cost of supporting the entire promotional apparatus.

The promotion strategy supports a business model that rewards stability and trust, evidenced by the consistent dividend increases, like the recent quarterly payment of $0.40 per common share. The focus remains on reinforcing the message that 1st Source Corporation is a stable, local partner.

• Emphasis on relationship banking and personalized service.
• Community involvement and local event sponsorships build trust.
• Targeted digital advertising for specialty finance segments.
• Direct mail and email campaigns to existing customer base.
• Minimal national advertising; promotion is defintely regional, concentrated in Northern Indiana, Southwest Michigan, and Florida.

1st Source Corporation (SRCE) - Marketing Mix: Price

Price strategy for 1st Source Corporation centers on managing the spread between earning assets and funding liabilities, complemented by non-interest income generation.

Net Interest Margin (NIM) is the core profitability driver for 1st Source Corporation.

• Tax-equivalent Net Interest Margin reached 3.90% in the first quarter of 2025.
• Tax-equivalent Net Interest Margin increased to 3.95% in the second quarter of 2025.

The company manages its funding costs to support this margin, focusing on the cost of funds relative to loan yields.

Deposit rates are managed to maintain a low cost of funds.

Average deposits showed growth, increasing $187.39 million in the first quarter of 2025 over the previous quarter, representing an annualized growth of 10.48%. As of the third quarter of 2025, total deposits were robust, with interest-bearing deposits at approximately $5.78 billion.

Competitive interest rates on loans, including specialty finance assets, drive asset growth.

Fee income from wealth management and trust services contributes meaningfully to the overall revenue structure.

For the third quarter of 2025, total revenue was $110.66 million, with Net Interest Income at $88.75 million. This implies non-interest income, which includes fee income, was approximately $21.91 million for that quarter. Assets under management within the Community Banking division were approximately $5.9 billion as of the second quarter of 2025.

Total assets projected near $9.5 billion for fiscal year 2025 are supported by recent balance sheet figures.

The total assets on the balance sheet as of September 2025 were reported at $9.05 Billion USD. This compares to the year-end 2024 figure of $8.93 B.

• Total Assets (September 2025): $9.05 Billion USD.
• Total Assets (Year-End 2024): $8.93 Billion USD.
• Projected Total Assets (FY 2025): Near $9.5 billion.

Finance: draft 13-week cash view by Friday.