1st Source Corporation (SRCE): Marketing Mix Analysis [10-2024 Updated]

In 2024, 1st Source Corporation (SRCE) is strategically positioning itself within the competitive financial landscape through a well-defined marketing mix, addressing the critical elements of Product, Place, Promotion, and Price. With a diverse array of loan offerings tailored to meet local needs, a strong community presence, targeted promotional efforts, and competitive pricing strategies, 1st Source is not just serving its customers but also enhancing its market footprint. Discover how each component of their marketing strategy interplays to drive growth and customer satisfaction below.

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

Diverse loan offerings including commercial, agricultural, and residential loans

As of September 30, 2024, 1st Source Corporation reported total loans and leases amounting to $6.62 billion, with significant portions allocated to various sectors:

Specialized financing for renewable energy projects

The renewable energy financing segment has shown growth, with loans in this category reaching $479.95 million as of September 30, 2024. This represents a significant increase from $399.71 million in the previous year, highlighting the company's commitment to supporting sustainable projects.

Equipment financing for construction, aircraft, and trucks

1st Source Corporation provides tailored equipment financing solutions. As of September 30, 2024, the following amounts were reported for equipment financing:

Personal and consumer loans tailored to local markets

Personal loans and consumer financing are designed to meet local market needs, with the total amount for consumer loans reported at $135.72 million. This segment caters to individual financial requirements within the communities served by 1st Source Corporation.

Emphasis on secured loans with personal guarantees

1st Source Corporation places a strong emphasis on secured loans, which are backed by personal guarantees. This is evident in the company’s provision for credit losses, which was $9.76 million for the nine months ended September 30, 2024, compared to $3.96 million during the same period in 2023. This focus on secured lending helps mitigate risk and ensure a more stable loan portfolio.

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

Operates primarily in northern Indiana and southwest Michigan

1st Source Corporation, through its subsidiary 1st Source Bank, operates primarily in northern Indiana and southwest Michigan, maintaining a strong regional presence with a focus on community banking. As of 2024, the bank has a total of 77 branches across these regions, which facilitates direct access to banking services for local customers.

Local branch network enhances community engagement

The extensive branch network allows 1st Source to engage deeply with local communities. In 2023, 1st Source Bank's total deposits reached approximately $7.13 billion, reflecting a 1.24% increase from the end of 2023. This growth is indicative of the bank's commitment to serving its community through personalized banking services and local knowledge.

Focus on serving specific local market communities

1st Source Bank emphasizes its strategy to serve specific local market communities, tailoring its products to meet the unique needs of these areas. For instance, the bank offers specialized lending options that cater to the agricultural sector, which is significant in northern Indiana. In the nine months ended September 30, 2024, average loans and leases increased by $430.26 million or 7.01%, driven by growth in commercial real estate and agricultural loans.

Online banking options complement physical branch services

In addition to its physical branches, 1st Source Corporation has developed robust online banking options, which have become increasingly important in the digital age. The bank's online platform facilitates easy access to banking services, allowing customers to manage their accounts, apply for loans, and conduct transactions from anywhere. This dual approach—combining traditional banking with modern digital solutions—enhances customer convenience and satisfaction.

Strategic regional expansion plans to enhance market presence

1st Source Corporation is actively pursuing strategic regional expansion to bolster its market presence. The bank's management has identified potential areas for growth, which includes adding new branches in underserved markets. This strategy aims to increase accessibility and further solidify the bank's footprint in the region. The bank's total capital as of September 30, 2024, was $1.32 billion, reflecting strong financial health to support expansion initiatives.

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

Targeted marketing campaigns to local businesses and consumers

1st Source Corporation actively engages in targeted marketing campaigns aimed at local businesses and consumers, focusing on enhancing brand recognition in its operational areas. The business development and marketing expenses increased to $5.44 million for the nine months ended September 30, 2024, compared to $4.82 million for the same period in 2023, marking a growth of 12.84%.

Increased business development and marketing expenses

The company has significantly increased its business development and marketing expenses, reflecting its commitment to expand its market presence. In Q3 2024, these expenses reached $1.67 million, up from $1.20 million in Q3 2023, an increase of 39.13%.

Emphasis on trust and wealth advisory services in promotions

1st Source Corporation emphasizes its trust and wealth advisory services in its promotional activities. The company reported trust and wealth advisory fees of $6.52 million for Q3 2024, a 15.51% increase compared to $5.65 million in Q3 2023. The market value of trust assets under management rose to $6.03 billion as of September 30, 2024, up from $4.96 billion a year earlier.

Community engagement through local events and sponsorships

The corporation engages in community outreach through local events and sponsorships, enhancing its brand visibility and community ties. This strategy includes participation in local events and initiatives that resonate with the community's values and needs, fostering a strong local presence.

Utilizes digital marketing strategies to reach a broader audience

1st Source Corporation employs digital marketing strategies to expand its reach. The company has adapted to the increasing importance of online engagement, utilizing social media platforms and digital advertising to connect with a broader audience. This approach is aimed at enhancing customer interaction and driving engagement through various digital channels.

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

Competitive interest rates on loans and deposits

The yield on average earning assets for the three months ended September 30, 2024, was 5.93%, an increase of 57 basis points from 5.36% in the same period in 2023. The effective rate on average interest-bearing deposits increased to 3.15% from 2.60% during the same period. This competitive interest rate environment is a strategic response to market conditions and aims to attract and retain customers.

Fees for services such as overdraft and account maintenance

For the three months ended September 30, 2024, service charges on deposit accounts were $3.279 million, relatively flat compared to $3.297 million in the same period of 2023. The nine-month totals reflect an increase to $9.552 million from $9.418 million, indicating higher volume in business deposit accounts and consumer overdraft fees.

Structured pricing models for specialized loans

1st Source Corporation has seen an increase in average loans and leases by $359.79 million, or 5.76%, primarily in commercial real estate and renewable energy sectors. The yield on loans and leases net of unearned discounts was reported at 6.94% for the three months ended September 30, 2024. This structured pricing model allows the bank to cater to specialized markets while maintaining competitive rates.

Common stock dividend policy to attract investors

As of September 30, 2024, 1st Source Corporation declared a common stock dividend of $0.36 per share. The trailing four quarters dividend payout ratio was 26.34%, which reflects a stable approach to returning value to shareholders. This policy is designed to attract and retain investors by providing consistent returns.

Focus on maintaining net interest margins amidst economic fluctuations

The net interest margin for 1st Source Corporation was 3.64% for the three months ended September 30, 2024, compared to 3.46% for the same period in 2023. In the nine-month comparison, net interest margin improved to 3.59% from 3.51%. This focus on maintaining net interest margins is critical for profitability, especially in a fluctuating economic environment.

In summary, 1st Source Corporation's marketing mix effectively positions the company within its regional markets. By offering a diverse range of loan products and maintaining a strong community presence through local branches and engagement initiatives, the bank fosters trust and loyalty among customers. Its competitive pricing strategies and targeted promotional efforts further enhance its appeal, making it well-equipped to adapt to the evolving financial landscape and meet the needs of both individual and business clients.

Article updated on 8 Nov 2024

Resources:

1. 1st Source Corporation (SRCE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of 1st Source Corporation (SRCE)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View 1st Source Corporation (SRCE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.