1st Source Corporation (SRCE) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

1st Source Corporation (SRCE) Financial Services Profile

1st Source Corporation, with a $2.01B market cap, delivers commercial and consumer banking, wealth management, and insurance solutions. Operating across Indiana, Michigan, and Florida, the company distinguishes itself through a community-focused approach and a diversified suite of financial products, reflected in a 26.7% profit margin.

What Is the Investment Thesis for SRCE?

1st Source Corporation presents a compelling investment case based on its diversified financial services model and strong regional presence. With a market capitalization of $2.01B and a P/E ratio of 11.8, the company demonstrates solid profitability, supported by a 26.7% profit margin and a 70.8% gross margin. A dividend yield of 2.18% offers income potential. Growth catalysts include expansion of wealth management services and strategic lending initiatives in key sectors. Potential risks include interest rate sensitivity and regional economic fluctuations. The company's beta of 0.57 suggests lower volatility compared to the broader market, making it a potentially stable investment within the financial sector. Key to sustained growth will be maintaining asset quality and adapting to evolving regulatory landscapes.

Based on FMP financials and quantitative analysis

SRCE Key Highlights

• Market Cap of $2.01B indicates substantial size and investor confidence.
• P/E Ratio of 11.8 suggests the company may be undervalued compared to its earnings.
• Profit Margin of 26.7% demonstrates strong profitability and operational efficiency.
• Gross Margin of 70.8% reflects effective cost management and pricing strategies.
• Dividend Yield of 2.18% provides an attractive income stream for investors.

Who Are SRCE's Competitors?

SRCE is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are SRCE's Key Strengths?

• Diversified revenue streams from banking, wealth management, and insurance.
• Strong regional presence and brand recognition.
• Experienced management team.
• Solid financial performance with healthy profit margins.

What Are SRCE's Weaknesses?

• Limited geographic diversification.
• Reliance on interest rate spreads for profitability.
• Exposure to regional economic fluctuations.
• Smaller size compared to national banks.

What Could Drive SRCE Stock Higher?

• Expansion of digital banking services to attract younger customers.
• Growth in wealth management assets under management.
• Strategic lending initiatives in renewable energy and specialized equipment financing.
• Potential acquisitions of smaller community banks to expand market presence.

What Are the Key Risks for SRCE?

• Financial-distress signal — its Altman Z-Score of -0.36 sits in the distress zone (elevated bankruptcy risk).
• Rising interest rates could compress net interest margins.
• Economic downturns in the Midwest and Southeast regions could impact loan quality.
• Increased competition from larger banks and fintech companies.
• Regulatory changes could increase compliance costs.

What Are the Growth Opportunities for SRCE?

• Expansion of Wealth Management Services: 1st Source can capitalize on the growing demand for wealth management services among high-net-worth individuals and families. By expanding its team of financial advisors and enhancing its investment product offerings, the company can attract new clients and increase assets under management. The wealth management market is projected to grow at an annual rate of 7-10% over the next five years, presenting a significant opportunity for 1st Source to increase its fee income and overall profitability.
• Strategic Lending Initiatives: Focusing on niche lending markets, such as renewable energy and specialized equipment financing, can drive loan growth and improve yields. 1st Source's existing expertise in equipment loan and lease products positions it well to capitalize on these opportunities. The market for renewable energy project financing is expected to expand significantly, driven by government incentives and increasing demand for clean energy solutions. By targeting these sectors, 1st Source can diversify its loan portfolio and enhance its risk-adjusted returns.
• Digital Banking Enhancements: Investing in digital banking technologies can improve customer experience, reduce operating costs, and attract younger demographics. Enhancements may include mobile banking apps, online account opening, and personalized financial planning tools. The adoption of digital banking is increasing rapidly, with a projected 65% of banking customers using mobile banking by 2028. 1st Source can leverage digital channels to expand its reach beyond its physical branch network and compete more effectively with larger national banks.
• Geographic Expansion: Expanding into new markets within the Midwest and Southeast regions can drive loan and deposit growth. 1st Source's successful operations in Indiana, Michigan, and Florida provide a solid foundation for further expansion. Identifying markets with favorable demographics and strong economic growth can increase the likelihood of success. The company can consider opening new branches, acquiring smaller community banks, or establishing partnerships with local businesses to accelerate its expansion efforts.
• Cross-Selling Opportunities: Leveraging its existing customer base to cross-sell additional products and services can increase revenue per customer and improve customer loyalty. For example, offering insurance products to banking customers or wealth management services to loan customers. By integrating its various business lines and providing personalized recommendations, 1st Source can enhance customer relationships and drive incremental revenue growth. The company can implement targeted marketing campaigns and employee training programs to promote cross-selling opportunities.

What Opportunities Does SRCE Have?

• Expansion into new markets.
• Increased adoption of digital banking technologies.
• Growth in wealth management services.
• Strategic acquisitions of smaller banks.

What Threats Does SRCE Face?

• Increased competition from larger banks and fintech companies.
• Rising interest rates.
• Economic downturns.
• Regulatory changes.

What Are SRCE's Competitive Advantages?

• Strong regional presence in Indiana, Michigan, and Florida.
• Diversified financial services offerings, including banking, wealth management, and insurance.
• Long-standing history and established reputation in the community.
• Focus on customer relationships and personalized service.

What Does SRCE Do?

Founded in 1863 and headquartered in South Bend, Indiana, 1st Source Corporation has evolved into a comprehensive financial services provider through its subsidiary, 1st Source Bank. The company offers a wide array of services, including commercial and consumer banking, trust and wealth advisory, and insurance products. Its consumer banking services encompass checking and savings accounts, certificates of deposit, individual retirement accounts, and online and mobile banking. Loan offerings include consumer, real estate mortgage, and home equity lines of credit, complemented by financial planning and literacy services. For businesses, 1st Source provides commercial, small business, agricultural, and real estate loans, covering financing for properties, equipment, inventories, and renewable energy projects. Commercial leasing, treasury management, and retirement planning services are also available. 1st Source distinguishes itself with trust, investment, agency, and custodial services, managing estates, personal trusts, and investment accounts for individuals, employee benefit plans, and charitable foundations. The company further extends its services with equipment loan and lease products, financing construction equipment, aircraft, and various types of vehicles. Insurance products include corporate and personal property, casualty, and health and life insurance. As of December 31, 2021, 1st Source operated 79 banking centers across 18 counties in Indiana and Michigan, as well as Sarasota County in Florida.

What Products and Services Does SRCE Offer?

• Provides commercial and consumer banking services.
• Offers trust and wealth advisory services.
• Provides corporate and personal insurance products.
• Offers checking and savings accounts.
• Provides commercial, small business, and agricultural loans.
• Manages investment accounts for individuals and employee benefit plans.
• Offers equipment loan and lease products for various industries.

How Does SRCE Make Money?

• Generates revenue through interest income from loans.
• Earns fees from wealth management and trust services.
• Collects premiums from insurance products.
• Derives income from service charges and fees on deposit accounts.

What Industry Does SRCE Operate In?

1st Source Corporation operates within the regional banking sector, which is influenced by interest rate movements, regulatory changes, and economic conditions. The U.S. banking industry is experiencing consolidation, with larger banks acquiring smaller regional players. 1st Source differentiates itself through its focus on community banking and diversified service offerings, including wealth management and insurance. The regional banking sector is expected to see moderate growth, driven by increased lending activity and fee income, but faces challenges from fintech companies and evolving customer preferences for digital banking solutions.

Who Are SRCE's Key Customers?

• Individuals seeking personal banking services.
• Small businesses requiring loans and treasury management.
• Commercial clients needing financing for real estate and equipment.
• High-net-worth individuals seeking wealth management services.
• Employee benefit plans requiring investment management.

ROE 13%Key Financial Metrics

Return on equity for 1st Source Corporation stands at 12.9%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 1.8%, showing how much profit it generates from its asset base. SRCE trades at a trailing price-to-earnings ratio of 11.76, below the Financial Services sector average of ~18x. Its free cash flow yield is 10.3%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.18 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 7.8%, the inverse of the P/E and a quick read on earnings relative to price.

1st Source Corporation (SRCE) Valuation Context

Valued at $2.01B, SRCE is classified as a mid-cap stock. Relative to its peer group, SRCE's quantitative score of 98/100 is above the peer average of 77/100.

Company Profile

1st Source Corporation operates in the Banks - Regional industry within the Financial Services sector. It is headquartered in South Bend, US. The company is led by CEO Andrea Gayle Short. SRCE has traded publicly since 1983.

F-Score 8/9Financial Health

1st Source Corporation's Piotroski F-Score is 8/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of -0.36 places it in the distress zone, a signal of elevated financial risk.

FY2026 estForward Outlook

Wall Street analysts project 1st Source Corporation revenue of about $459.3M for fiscal 2026, with EPS near $6.80.

Net sellingInsider Activity

Over the past six months, 1st Source Corporation insiders filed 15 SEC Form 4 transactions — 4 sales and 11 purchases. On net that is roughly 21K shares disposed (about $764K), a signal worth weighing alongside the fundamentals.

SRCE Financials

SRCE Latest News

SRCE Analyst Consensus

SRCE MoonshotScore

1st Source Corporation Financial Services Stock: Key Questions Answered

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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