Highlights for the fourth quarter and full year 2020
include:
- Record annual net income and diluted earnings per share of
$29.5 million and $2.99, respectively
- Record quarterly net income of $11.1 million, compared to
$8.4 million for the third quarter of 2020 and $7.1 million for the
fourth quarter of 2019
- Record quarterly diluted earnings per share of $1.12, up
30.2% over the third quarter of 2020 and 55.6% over the fourth
quarter of 2019
- Total quarterly revenue of $31.5 million, a 9.7% increase
from the third quarter of 2020 and a 51.7% increase from the fourth
quarter of 2019
- Net interest margin and fully-taxable equivalent net
interest margin increased 25 and 24 basis points (“bps”),
respectively, from the third quarter, driven by a 22 bp decrease in
the cost of interest-bearing deposits
First Internet Bancorp (the “Company”) (Nasdaq: INBK), the
parent company of First Internet Bank (the “Bank”), announced today
financial and operational results for the fourth quarter and full
year ended December 31, 2020. Net income for the fourth quarter of
2020 was a record $11.1 million, or $1.12 diluted earnings per
share. This compares to net income of $8.4 million, or $0.86
diluted earnings per share, for the third quarter of 2020, and net
income of $7.1 million, or $0.72 diluted earnings per share, for
the fourth quarter of 2019.
For the full year ended December 31, 2020, net income was a
record $29.5 million and diluted earnings per share were a record
$2.99, compared to net income of $25.2 million and diluted earnings
per share of $2.51 for the year ended December 31, 2019. The full
year 2020 results included a $2.1 million pre-tax write-down of
commercial other real estate owned (“OREO”). Excluding this charge,
adjusted net income for the year was $31.1 million, or $3.16
adjusted diluted earnings per share.
“We generated record net income for the fourth quarter and for
all of 2020, closing out our 21st year of operation with
substantial momentum despite the challenges created by the
pandemic,” said David Becker, Chairman, President and Chief
Executive Officer. “Over the course of the year, we produced robust
revenue growth, with our direct-to-consumer mortgage business
delivering its best year in our history. Our bankers met the surge
in demand brought on by low interest rates, winning business with a
demonstrated commitment to consistent, excellent service. Our
expanding national SBA platform also steadily gained momentum and
drove higher gain-on-sale revenue, increasingly contributing to our
success throughout the year. Our pipelines in these key business
lines remain solid heading into 2021.
“We also maintained strong credit quality even as we took
extraordinary steps in the form of loan deferrals to help our
clients weather the initial shocks of the public health crisis
early in the year,” Becker added. “Well before the year ended,
nearly all of our borrowers who needed payment relief resumed
making payments, and our continued low level of nonperforming loans
reflects this. We deepened ties with our clients through this
experience and remain optimistic in our customers’ collective
ability to fully bounce back and succeed in the year ahead.
Mr. Becker concluded, “And of course, I want to thank the entire
First Internet team for their exceptional work in an unforgettable
year. Their unrelenting efforts allowed us to deliver our best-ever
earnings results in a very difficult time for our country. Our
employees are at the heart of our strong culture and workplace
environment and are the reason First Internet was recognized by The
Indianapolis Star for the seventh consecutive year as one of the
‘Top Workplaces in Central Indiana’.”
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2020 was $18.9
million, compared to $16.2 million for the third quarter of 2020,
and $15.4 million for the fourth quarter of 2019. On a
fully-taxable equivalent basis, net interest income for the fourth
quarter was $20.3 million, compared to $17.7 million for the third
quarter, and $16.9 million for the fourth quarter of 2019.
Total interest income for the fourth quarter of 2020 was $33.6
million, an increase of 2.7%, compared to the third quarter of
2020, and a decrease of 11.2% compared to the fourth quarter of
2019. On a fully-taxable equivalent basis, total interest income
for the fourth quarter of 2020 was $35.0 million, an increase of
2.5% compared to the third quarter of 2020, and a decrease of 11.2%
compared to the fourth quarter of 2019. The increase in total
interest income compared to the third quarter of 2020 was driven
primarily by an 8 bp increase in the yield on average
interest-earning assets as the average balance of those assets was
relatively stable between quarters. The yield on interest-earning
assets for the fourth quarter of 2020 increased to 3.17% from 3.09%
in the prior quarter due primarily to a shift in the earning asset
mix and an increase in loan fee income, mostly related to
prepayments. Average loan balances increased $73.2 million, or
2.4%, while the average balance of securities and other earning
assets decreased $51.1 million and $19.6 million, respectively.
Total interest expense for the fourth quarter of 2020 was $14.8
million, a decrease of 10.5%, compared to the third quarter of
2020, and a decrease of 34.3% compared to the fourth quarter of
2019. The decrease in total interest expense compared to the linked
quarter was due primarily to a 22 bp decline in the cost of
interest-bearing deposits. The decrease in deposit costs reflects
the continued decline in the rates paid on interest-bearing
deposits as well as a shift in the deposit mix due to the growth in
money market accounts and reduction in certificates and brokered
deposits.
During the fourth quarter of 2020, the cost of money market
deposits decreased by 27 bps while the average balance of these
deposits grew $74.3 million, or 5.7%. Furthermore, the cost of
certificates and brokered deposits decreased by 9 bps and average
balances decreased $110.9 million, or 6.2%. During the fourth
quarter, new certificates of deposit were originated at a weighted
average cost of 50 bps while maturing deposits had a weighted
average cost of 205 bps; a difference of 155 bps.
Net interest margin (“NIM”) improved to 1.78% for the fourth
quarter of 2020, up from 1.53% for the third quarter of 2020 and
1.51% in the fourth quarter of 2019. Fully-taxable equivalent NIM
(“FTE NIM”) increased by 24 bps to 1.91% for the fourth quarter of
2020, up from 1.67% for both the third quarter of 2020 and the
fourth quarter of 2019. The increases in NIM and FTE NIM compared
to the linked quarter were driven primarily by a combination of
lower interest-bearing deposit costs and higher average loan
yields, which more than offset the impact of lower yields on
securities and the continued effect of elevated cash balances.
Noninterest Income
Noninterest income for the fourth quarter of 2020 was $12.7
million, compared to $12.5 million for the third quarter of 2020
and $5.4 million for the fourth quarter of 2019. The modest
increase compared to the linked quarter was driven primarily by an
increase in gain on sale of loans, partially offset by lower
revenues from mortgage banking activities. Gain on sale of loans
totaled $3.7 million for the quarter, increasing $1.7 million
compared to the third quarter of 2020 driven by a higher amount of
U.S. Small Business Administration (“SBA”) 7(a) guaranteed loan
sales in the quarter as well as a $0.2 million gain on the sale of
$7.4 million of public finance loans. Mortgage banking revenue
totaled $8.0 million for the fourth quarter of 2020, down $1.6
million from the record prior quarter due to a decrease in interest
rate lock volume, which was partially offset by an increase in
margins. On a historical basis, however, mortgage banking revenue
remained strong as the low interest rate environment continued to
drive purchase and refinance activity.
Noninterest Expense
Noninterest expense for the fourth quarter of 2020 was $14.5
million, compared to $16.4 million for the third quarter of 2020
and $12.6 million for the fourth quarter of 2019. The third quarter
of 2020 included a $2.1 million write-down of two legacy commercial
OREO properties. Excluding the impact of that write-down,
noninterest expense increased slightly on a linked-quarter basis,
driven primarily by a $0.2 million increase in loan expenses and a
$0.2 million increase consulting and professional fees, but was
partially offset by a $0.4 million decrease in salaries and
employee benefits. The lower salaries and employee benefits expense
was due mainly to the timing of incentive compensation in the
Company’s small business lending division and lower incentive
compensation in the mortgage banking division due to lower mortgage
production quarter-over-quarter.
Income Taxes
The Company reported an income tax expense of $3.1 million for
the fourth quarter of 2020 and an effective tax rate of 21.6%,
compared to income tax expense of $1.4 million and an effective tax
rate of 14.2% for the third quarter of 2020 and an income tax
expense of $0.6 million and an effective tax rate of 7.8% for the
fourth quarter of 2019. The increase in income taxes during the
quarter was primarily due to the increase in pre-tax earnings
driven by a higher proportion of taxable revenue and the timing of
pre-tax earnings as performance significantly improved during the
second half of 2020.
Loans and Credit Quality
Total loans as of December 31, 2020 were $3.1 billion, an
increase of $46.3 million, or 1.5%, compared to September 30, 2020,
and an increase of $95.7 million, or 3.2%, compared to December 31,
2019. Total commercial loan balances were $2.5 billion as of
December 31, 2020, an increase of $73.1 million, or 3.0%, compared
to September 30, 2020 and an increase of $229.1 million, or 10.0%,
compared to December 31, 2019. Compared to the linked quarter, the
growth in commercial loan balances was driven largely by production
in healthcare finance and construction lending, which was partially
offset by a decrease in single tenant lease financing balances.
Total consumer loan balances were $482.3 million as of December
31, 2020, a decrease of $25.4 million, or 5.0%, compared to
September 30, 2020 and a decrease of $151.2 million, or 23.9%,
compared to December 31, 2019. The decline in consumer loan
balances from September 30, 2020 was due primarily to increased
prepayment activity in the residential mortgage portfolio and
seasonally lower production in the RV and trailer portfolios.
Total delinquencies 30 days or more past due decreased to 0.17%
of total loans as of December 31, 2020, down from 0.22% as of
September 30, 2020 and down from 0.24% as of December 31, 2019.
Overall credit quality remained relatively stable as nonperforming
loans to total loans was 0.33% as of December 31, 2020, compared to
0.32% at September 30, 2020 and 0.23% as of December 31, 2019.
The allowance for loan losses as a percentage of total loans was
0.96% as of December 31, 2020, or 0.98% when excluding SBA Paycheck
Protection Program (“PPP”) loans, compared to 0.89% and 0.91%,
respectively, as of September 30, 2020 and 0.74% as of December 31,
2019. During the quarter, the Company continued to make additional
adjustments to qualitative factors in its allowance model to
reflect the continued economic uncertainty resulting from the
COVID-19 pandemic as well as increased the specific reserve by $1.1
million on an existing nonperforming single tenant lease financing
relationship. As a result, both the amount of the allowance for
loan losses and the allowance as a percentage of total loans
increased compared to September 30, 2020.
Net charge-offs of $0.3 million were recognized during the
fourth quarter of 2020, resulting in net charge-offs to average
loans of 0.04%, compared to 0.01% for the third quarter and 0.04%
for the fourth quarter of 2019. The provision for loan losses in
the fourth quarter was $2.9 million, compared to $2.5 million for
the third quarter and $0.5 million for the fourth quarter of
2019.
Capital
As of December 31, 2020, total shareholders’ equity was $330.9
million, an increase of $12.8 million, or 4.0%, compared to
September 30, 2020, due primarily to the net income earned during
the quarter and a decrease in accumulated other comprehensive loss.
Book value per common share increased to $33.77 as of December 30,
2020, up from $32.46 as of September 30, 2020 and $31.30 as of
December 31, 2019. Tangible book value per share increased to
$33.29, up from $31.98 and $30.82, each as of the same reference
dates.
The following table presents the Company’s and the Bank’s
regulatory and other capital ratios as of December 31, 2020.
As of December 31, 2020
Company
Bank
Total shareholders' equity to assets
7.79%
8.64%
Tangible common equity to tangible assets
1
7.69%
8.54%
Tier 1 leverage ratio 2
7.95%
8.78%
Common equity tier 1 capital ratio 2
11.31%
12.49%
Tier 1 capital ratio 2
11.31%
12.49%
Total risk-based capital ratio 2
14.91%
13.47%
1 This information represents a non-GAAP
financial measure. For a discussion of non-GAAP financial measures,
see the section below entitled "Non-GAAP Financial Measures."
2 Regulatory capital ratios are
preliminary pending filing of the Company's and the Bank's
regulatory reports.
Conference Call and Webcast
The Company will host a conference call and webcast at 12:00
p.m. Eastern Time on Thursday, January 21, 2021 to discuss its
quarterly financial results. The call can be accessed via telephone
at (888) 348-3664. A recorded replay can be accessed through
February 21, 2021 by dialing (877) 344-7529; passcode:
10151053.
Additionally, interested parties can listen to a live webcast of
the call on Company's website at www.firstinternetbancorp.com. An
archived version of the webcast will be available in the same
location shortly after the live call has ended.
About First Internet Bancorp
First Internet Bancorp is a bank holding company with assets of
$4.2 billion as of December 31, 2020. The Company’s subsidiary,
First Internet Bank, opened for business in 1999 as an industry
pioneer in the branchless delivery of banking services. The Bank
provides consumer and small business deposit, consumer loan,
residential mortgage, and specialty finance services nationally as
well as commercial real estate loans, commercial and industrial
loans, SBA financing and treasury management services in select
geographies. First Internet Bancorp’s common stock trades on the
Nasdaq Global Select Market under the symbol “INBK” and is a
component of the Russell 2000® Index. Additional information about
the Company is available at www.firstinternetbancorp.com and
additional information about the Bank, including its products and
services, is available at www.firstib.com.
Forward-Looking Statements
This press release may contain forward-looking statements with
respect to the financial condition, results of operations, trends
in lending policies, plans, objectives, future performance or
business of the Company. Forward-looking statements are generally
identifiable by the use of words such as “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“optimistic,” “pending,” “plan,” “position,” “preliminary,”
“remain,” “should,” “will,” “would” or other similar expressions.
Forward-looking statements are not a guarantee of future
performance or results, are based on information available at the
time the statements are made and involve known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from the information in the forward-looking
statements. The COVID-19 pandemic continues to impact general
business and economic conditions as well as our customers,
counterparties, employees, and third-party service providers.
Continued uncertainty in market conditions could adversely affect
our revenues and the values of our assets and liabilities, reduce
the availability of funding, lead to a tightening of credit and
further increase stock price volatility. In addition, changes to
statutes, regulations, or regulatory policies or practices as a
result of, or in response to COVID-19, could affect us in
substantial and unpredictable ways. The ultimate magnitude and
duration of the pandemic is still unknown at this time, therefore,
the extent of the impact on our business, financial position,
results of operations, liquidity and prospects remains uncertain.
Other factors that may cause such differences include: failures or
breaches of or interruptions in the communications and information
systems on which we rely to conduct our business; failure of our
plans to grow our commercial real estate, commercial and
industrial, public finance, SBA and healthcare finance loan
portfolios; competition with national, regional and community
financial institutions; the loss of any key members of senior
management; fluctuations in interest rates; general economic
conditions; risks relating to the regulation of financial
institutions; and other factors identified in reports we file with
the U.S. Securities and Exchange Commission. All statements in this
press release, including forward-looking statements, speak only as
of the date they are made, and the Company undertakes no obligation
to update any statement in light of new information or future
events.
Non-GAAP Financial Measures
This press release contains financial information determined by
methods other than in accordance with U.S. generally accepted
accounting principles (“GAAP”). Non-GAAP financial measures,
specifically tangible common equity, tangible assets, tangible book
value per common share, tangible common equity to tangible assets,
average tangible common equity, return on average tangible common
equity, total interest income – FTE, net interest income – FTE, net
interest margin – FTE, allowance for loan losses to loans,
excluding PPP loans, adjusted income before income taxes, adjusted
income tax provision, adjusted net income, adjusted diluted
earnings per share, adjusted return on average assets, adjusted
return on average shareholders’ equity, adjusted return on average
tangible common equity and adjusted effective income tax rate are
used by the Company’s management to measure the strength of its
capital and analyze profitability, including its ability to
generate earnings on tangible capital invested by its shareholders.
Although management believes these non-GAAP measures are useful to
investors by providing a greater understanding of its business,
they should not be considered a substitute for financial measures
determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP performance measures that may be presented
by other companies. Reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP financial measures
are included in the table at the end of this release under the
caption “Reconciliation of Non-GAAP Financial Measures.”
First Internet Bancorp Summary Financial Information
(unaudited) Dollar amounts in thousands, except per share data
Three Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2020
2020
2019
2020
2019
Net income
$
11,090
$
8,411
$
7,096
$
29,453
$
25,239
Per share and share information Earnings per share - basic
$
1.12
$
0.86
$
0.72
$
2.99
$
2.51
Earnings per share - diluted
1.12
0.86
0.72
2.99
2.51
Dividends declared per share
0.06
0.06
0.06
0.24
0.24
Book value per common share
33.77
32.46
31.30
33.77
31.30
Tangible book value per common share 1
33.29
31.98
30.82
33.29
30.82
Common shares outstanding
9,800,569
9,800,569
9,741,800
9,800,569
9,741,800
Average common shares outstanding: Basic
9,883,609
9,773,175
9,825,784
9,840,205
10,041,581
Diluted
9,914,022
9,773,224
9,843,829
9,842,425
10,044,483
Performance ratios Return on average assets
1.02
%
0.78
%
0.69
%
0.69
%
0.65
%
Return on average shareholders' equity
13.64
%
10.67
%
9.46
%
9.39
%
8.52
%
Return on average tangible common equity 1
13.84
%
10.83
%
9.61
%
9.53
%
8.65
%
Net interest margin
1.78
%
1.53
%
1.51
%
1.55
%
1.65
%
Net interest margin - FTE 1,2
1.91
%
1.67
%
1.67
%
1.68
%
1.82
%
Capital ratios 3 Total shareholders' equity to assets
7.79
%
7.34
%
7.44
%
7.79
%
7.44
%
Tangible common equity to tangible assets 1
7.69
%
7.24
%
7.33
%
7.69
%
7.33
%
Tier 1 leverage ratio
7.95
%
7.72
%
7.64
%
7.95
%
7.64
%
Common equity tier 1 capital ratio
11.31
%
11.13
%
10.84
%
11.31
%
10.84
%
Tier 1 capital ratio
11.31
%
11.13
%
10.84
%
11.31
%
10.84
%
Total risk-based capital ratio
14.91
%
14.38
%
13.99
%
14.91
%
13.99
%
Asset quality Nonperforming loans
$
10,183
$
9,774
$
6,732
$
10,183
$
6,732
Nonperforming assets
10,218
9,782
8,872
10,218
8,872
Nonperforming loans to loans
0.33
%
0.32
%
0.23
%
0.33
%
0.23
%
Nonperforming assets to total assets
0.24
%
0.23
%
0.22
%
0.24
%
0.22
%
Allowance for loan losses to: Loans
0.96
%
0.89
%
0.74
%
0.96
%
0.74
%
Loans, excluding PPP loans 1
0.98
%
0.91
%
0.74
%
0.98
%
0.74
%
Nonperforming loans
289.5
%
275.4
%
324.4
%
289.5
%
324.4
%
Net charge-offs to average loans
0.04
%
0.01
%
0.04
%
0.06
%
0.07
%
Average balance sheet information Loans
$
3,070,476
$
2,996,641
$
2,936,144
$
2,985,611
$
2,863,250
Total securities
582,425
633,552
597,049
626,022
560,317
Other earning assets
532,466
552,058
452,945
523,788
355,412
Total interest-earning assets
4,219,142
4,216,634
4,031,327
4,175,799
3,809,903
Total assets
4,316,207
4,307,819
4,108,216
4,263,798
3,890,708
Noninterest-bearing deposits
86,836
75,901
49,570
74,277
44,682
Interest-bearing deposits
3,258,269
3,279,621
3,110,501
3,224,657
2,938,622
Total deposits
3,345,105
3,355,522
3,160,071
3,298,934
2,983,304
Shareholders' equity
323,464
313,611
297,623
313,763
296,382
1 Refer to "Non-GAAP Financial Measures" section above and
"Reconciliation of Non-GAAP Financial Measures" below 2 On a
fully-taxable equivalent ("FTE") basis assuming a 21% tax rate 3
Regulatory capital ratios are preliminary pending filing of the
Company's regulatory reports
First Internet Bancorp
Condensed Consolidated Balance Sheets (unaudited, except
for December 31, 2019) Dollar amounts in thousands
December 31,
September 30,
December 31,
2020
2020
2019
Assets Cash and due from banks
$
7,367
$
5,804
$
5,061
Interest-bearing deposits
412,439
482,649
322,300
Securities available-for-sale, at fair value
497,628
528,311
540,852
Securities held-to-maturity, at amortized cost
68,223
68,254
61,878
Loans held-for-sale
39,584
76,208
56,097
Loans
3,059,231
3,012,914
2,963,547
Allowance for loan losses
(29,484
)
(26,917
)
(21,840
)
Net loans
3,029,747
2,985,997
2,941,707
Accrued interest receivable
17,416
17,768
18,607
Federal Home Loan Bank of Indianapolis stock
25,650
25,650
25,650
Cash surrender value of bank-owned life insurance
37,952
37,714
37,002
Premises and equipment, net
37,590
31,262
14,630
Goodwill
4,687
4,687
4,687
Servicing asset
3,569
2,818
2,481
Other real estate owned
-
-
2,065
Accrued income and other assets
64,304
66,502
67,066
Total assets
$
4,246,156
$
4,333,624
$
4,100,083
Liabilities Noninterest-bearing deposits
$
96,753
$
86,088
$
57,115
Interest-bearing deposits
3,174,132
3,286,303
3,096,848
Total deposits
3,270,885
3,372,391
3,153,963
Advances from Federal Home Loan Bank
514,916
514,914
514,910
Subordinated debt
79,603
69,758
69,528
Accrued interest payable
1,439
1,249
3,767
Accrued expenses and other liabilities
48,369
57,210
53,002
Total liabilities
3,915,212
4,015,522
3,795,170
Shareholders' equity Voting common stock
221,408
220,951
219,423
Retained earnings
126,732
116,241
99,681
Accumulated other comprehensive loss
(17,196
)
(19,090
)
(14,191
)
Total shareholders' equity
330,944
318,102
304,913
Total liabilities and shareholders' equity
$
4,246,156
$
4,333,624
$
4,100,083
First Internet Bancorp Condensed Consolidated Statements
of Income (unaudited, except for the twelve months ended
December 31, 2019) Dollar amounts in thousands, except per
share data
Three Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2020
2020
2019
2020
2019
Interest income Loans
$
30,930
$
29,560
$
31,574
$
120,628
$
122,228
Securities - taxable
1,988
2,240
3,475
11,123
13,807
Securities - non-taxable
318
381
604
1,728
2,595
Other earning assets
407
569
2,224
3,380
8,784
Total interest income
33,643
32,750
37,877
136,859
147,414
Interest expense Deposits
10,577
12,428
18,417
55,976
69,313
Other borrowed funds
4,201
4,090
4,086
16,342
15,134
Total interest expense
14,778
16,518
22,503
72,318
84,447
Net interest income
18,865
16,232
15,374
64,541
62,967
Provision for loan losses
2,864
2,509
468
9,325
5,966
Net interest income after provision for loan losses
16,001
13,723
14,906
55,216
57,001
Noninterest income Service charges and fees
206
224
213
824
885
Loan servicing revenue
379
274
166
1,159
166
Loan servicing asset revaluation
(60
)
(103
)
-
(432
)
-
Mortgage banking activities
7,987
9,630
2,953
24,693
11,541
Gain on sale of loans
3,702
2,033
1,721
8,298
2,074
Gain (loss) on sale of securities
-
98
-
139
(458
)
Other
443
339
352
1,655
2,581
Total noninterest income
12,657
12,495
5,405
36,336
16,789
Noninterest expense Salaries and employee benefits
9,135
9,533
7,168
34,231
27,014
Marketing, advertising and promotion
443
426
409
1,654
1,800
Consulting and professional fees
788
614
1,242
3,511
3,669
Data processing
426
388
312
1,528
1,338
Loan expenses
630
408
289
2,036
1,142
Premises and equipment
1,601
1,568
1,556
6,396
6,059
Deposit insurance premium
450
440
601
1,810
1,903
Write-down of other real estate owned
-
2,065
-
2,065
-
Other
1,040
970
1,036
4,423
3,709
Total noninterest expense
14,513
16,412
12,613
57,654
46,634
Income before income taxes
14,145
9,806
7,698
33,898
27,156
Income tax provision
3,055
1,395
602
4,445
1,917
Net income
$
11,090
$
8,411
$
7,096
$
29,453
$
25,239
Per common share data Earnings per share - basic
$
1.12
$
0.86
$
0.72
$
2.99
$
2.51
Earnings per share - diluted
$
1.12
$
0.86
$
0.72
$
2.99
$
2.51
Dividends declared per share
$
0.06
$
0.06
$
0.06
$
0.24
$
0.24
All periods presented have been reclassified to conform to the
current period classification.
First Internet Bancorp
Average Balances and Rates (unaudited) Dollar amounts in
thousands
Three Months Ended
December 31, 2020
September 30, 2020
December 31, 2019
Average
Interest /
Yield /
Average
Interest /
Yield /
Average
Interest /
Yield /
Balance
Dividends
Cost
Balance
Dividends
Cost
Balance
Dividends
Cost
Assets Interest-earning assets Loans, including loans
held-for-sale 1
$
3,104,251
$
30,930
3.96
%
$
3,031,024
$
29,560
3.88
%
$
2,981,333
$
31,574
4.20
%
Securities - taxable
492,573
1,988
1.61
%
539,154
2,240
1.65
%
497,739
$
3,475
2.77
%
Securities - non-taxable
89,852
318
1.41
%
94,398
381
1.61
%
99,310
$
604
2.41
%
Other earning assets
532,466
407
0.30
%
552,058
569
0.41
%
452,945
$
2,224
1.95
%
Total interest-earning assets
4,219,142
33,643
3.17
%
4,216,634
32,750
3.09
%
4,031,327
37,877
3.73
%
Allowance for loan losses
(27,805
)
(25,347
)
(21,967
)
Noninterest-earning assets
124,870
116,532
98,856
Total assets
$
4,316,207
$
4,307,819
$
4,108,216
Liabilities Interest-bearing liabilities
Interest-bearing demand deposits
$
165,815
$
156
0.37
%
$
154,275
$
228
0.59
%
$
122,031
$
223
0.73
%
Savings accounts
49,209
54
0.44
%
45,466
79
0.69
%
34,298
94
1.09
%
Money market accounts
1,369,543
1,655
0.48
%
1,295,249
2,442
0.75
%
752,941
3,653
1.92
%
Certificates and brokered deposits
1,673,702
8,712
2.07
%
1,784,631
9,679
2.16
%
2,201,231
14,447
2.60
%
Total interest-bearing deposits
3,258,269
10,577
1.29
%
3,279,621
12,428
1.51
%
3,110,501
18,417
2.35
%
Other borrowed funds
591,806
4,201
2.82
%
584,634
4,090
2.78
%
584,386
4,086
2.77
%
Total interest-bearing liabilities
3,850,075
14,778
1.53
%
3,864,255
16,518
1.70
%
3,694,887
22,503
2.42
%
Noninterest-bearing deposits
86,836
75,901
49,570
Other noninterest-bearing liabilities
55,832
54,052
66,136
Total liabilities
3,992,743
3,994,208
3,810,593
Shareholders' equity
323,464
313,611
297,623
Total liabilities and shareholders' equity
$
4,316,207
$
4,307,819
$
4,108,216
Net interest income
$
18,865
$
16,232
$
15,374
Interest rate spread
1.64
%
1.39
%
1.31
%
Net interest margin
1.78
%
1.53
%
1.51
%
Net interest margin - FTE 2,3
1.91
%
1.67
%
1.67
%
1 Includes nonaccrual loans 2 On a fully-taxable equivalent ("FTE")
basis assuming a 21% tax rate 3 Refer to "Non-GAAP Financial
Measures" section above and "Reconciliation of Non-GAAP Financial
Measures" below
First Internet Bancorp Average Balances
and Rates (unaudited) Dollar amounts in thousands
Twelve Months Ended
December 31, 2020
December 31, 2019
Average
Interest /
Yield /
Average
Interest /
Yield /
Balance
Dividends
Cost
Balance
Dividends
Cost
Assets Interest-earning assets Loans, including loans
held-for-sale 1
$
3,025,989
$
120,628
3.99
%
$
2,894,174
$
122,228
4.22
%
Securities - taxable
530,849
11,123
2.10
%
462,704
13,807
2.98
%
Securities - non-taxable
95,173
1,728
1.82
%
97,613
2,595
2.66
%
Other earning assets
523,788
3,380
0.65
%
355,412
8,784
2.47
%
Total interest-earning assets
4,175,799
136,859
3.28
%
3,809,903
147,414
3.87
%
Allowance for loan losses
(24,660
)
(19,891
)
Noninterest-earning assets
112,659
100,696
Total assets
$
4,263,798
$
3,890,708
Liabilities Interest-bearing liabilities
Interest-bearing demand deposits
$
145,207
$
840
0.58
%
$
118,874
$
882
0.74
%
Savings accounts
40,593
303
0.75
%
35,751
398
1.11
%
Money market accounts
1,156,084
11,381
0.98
%
637,360
12,661
1.99
%
Certificates and brokered deposits
1,882,773
43,452
2.31
%
2,146,637
55,372
2.58
%
Total interest-bearing deposits
3,224,657
55,976
1.74
%
2,938,622
69,313
2.36
%
Other borrowed funds
586,372
16,342
2.79
%
564,757
15,134
2.68
%
Total interest-bearing liabilities
3,811,029
72,318
1.90
%
3,503,379
84,447
2.41
%
Noninterest-bearing deposits
74,277
44,682
Other noninterest-bearing liabilities
64,729
46,265
Total liabilities
3,950,035
3,594,326
Shareholders' equity
313,763
296,382
Total liabilities and shareholders' equity
$
4,263,798
$
3,890,708
Net interest income
$
64,541
$
62,967
Interest rate spread
1.38
%
1.46
%
Net interest margin
1.55
%
1.65
%
Net interest margin - FTE 2,3
1.68
%
1.82
%
1 Includes nonaccrual loans 2 On a fully-taxable equivalent ("FTE")
basis assuming a 21% tax rate 3 Refer to "Non-GAAP Financial
Measures" section above and "Reconciliation of Non-GAAP Financial
Measures" below
First Internet Bancorp Loans and Deposits
(unaudited) Dollar amounts in thousands
December 31, 2020 September 30, 2020 December 31,
2019 Amount Percent Amount Percent
Amount Percent Commercial loans Commercial and
industrial
$
75,387
2.5
%
$
77,116
2.6
%
$
96,420
3.3
%
Owner-occupied commercial real estate
89,785
2.9
%
89,095
3.0
%
86,726
2.9
%
Investor commercial real estate
13,902
0.5
%
13,084
0.4
%
12,567
0.4
%
Construction
110,385
3.6
%
92,154
3.1
%
60,274
2.0
%
Single tenant lease financing
950,172
31.1
%
960,505
31.9
%
995,879
33.6
%
Public finance
622,257
20.3
%
625,638
20.8
%
687,094
23.2
%
Healthcare finance
528,154
17.3
%
461,740
15.3
%
300,612
10.1
%
Small business lending
125,589
4.1
%
123,168
4.1
%
46,945
1.6
%
Total commercial loans
2,515,631
82.3
%
2,442,500
81.2
%
2,286,517
77.1
%
Consumer loans Residential mortgage
186,787
6.1
%
203,041
6.7
%
313,849
10.6
%
Home equity
19,857
0.6
%
22,169
0.7
%
24,306
0.8
%
Trailers
144,493
4.7
%
145,775
4.8
%
146,734
5.0
%
Recreational vehicles
94,405
3.1
%
96,910
3.2
%
102,702
3.5
%
Other consumer loans
36,794
1.2
%
39,765
1.3
%
45,873
1.5
%
Total consumer loans
482,336
15.7
%
507,660
16.7
%
633,464
21.4
%
Net deferred loan fees, premiums, discounts and other 1
61,264
2.0
%
62,754
2.1
%
43,566
1.5
%
Total loans
$
3,059,231
100.0
%
$
3,012,914
100.0
%
$
2,963,547
100.0
%
December 31, 2020 September 30, 2020
December 31, 2019 Amount Percent Amount
Percent Amount Percent Deposits
Noninterest-bearing deposits
$
96,753
3.0
%
$
86,088
2.6
%
$
57,115
1.8
%
Interest-bearing demand deposits
188,645
5.8
%
155,054
4.6
%
129,020
4.1
%
Savings accounts
43,200
1.3
%
49,890
1.5
%
29,616
0.9
%
Money market accounts
1,350,566
41.3
%
1,359,178
40.3
%
786,390
24.9
%
Certificates of deposits
1,289,319
39.4
%
1,360,575
40.3
%
1,613,453
51.2
%
Brokered deposits
302,402
9.2
%
361,606
10.7
%
538,369
17.1
%
Total deposits
$
3,270,885
100.0
%
$
3,372,391
100.0
%
$
3,153,963
100.0
%
1 Includes carrying value adjustments of $42.7 million and $44.3
million related to terminated interest rate swaps associated with
public finance loans as of December 31, 2020 and September 30,
2020, respectively, and $21.4 million as of December 31, 2019
related to interest rate swaps associated with public finance
loans.
First Internet Bancorp Reconciliation of Non-GAAP
Financial Measures Dollar amounts in thousands, except per
share data
Three Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2020
2020
2019
2020
2019
Total equity - GAAP
$
330,944
$
318,102
$
304,913
$
330,944
$
304,913
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible common equity
$
326,257
$
313,415
$
300,226
$
326,257
$
300,226
Total assets - GAAP
$
4,246,156
$
4,333,624
$
4,100,083
$
4,246,156
$
4,100,083
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible assets
$
4,241,469
$
4,328,937
$
4,095,396
$
4,241,469
$
4,095,396
Common shares outstanding
9,800,569
9,800,569
9,741,800
9,800,569
9,741,800
Book value per common share
$
33.77
$
32.46
$
31.30
$
33.77
$
31.30
Effect of goodwill
(0.48
)
(0.48
)
(0.48
)
(0.48
)
(0.48
)
Tangible book value per common share
$
33.29
$
31.98
$
30.82
$
33.29
$
30.82
Total shareholders' equity to assets
7.79
%
7.34
%
7.44
%
7.79
%
7.44
%
Effect of goodwill
(0.10
%)
(0.10
%)
(0.11
%)
(0.10
%)
(0.11
%)
Tangible common equity to tangible assets
7.69
%
7.24
%
7.33
%
7.69
%
7.33
%
Total average equity - GAAP
$
323,464
$
313,611
$
297,623
$
313,763
$
296,382
Adjustments: Average goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Average tangible common equity
$
318,777
$
308,924
$
292,936
$
309,076
$
291,695
Return on average shareholders' equity
13.64
%
10.67
%
9.46
%
9.39
%
8.52
%
Effect of goodwill
0.20
%
0.16
%
0.15
%
0.14
%
0.13
%
Return on average tangible common equity
13.84
%
10.83
%
9.61
%
9.53
%
8.65
%
Total interest income
$
33,643
$
32,750
$
37,877
$
136,859
$
147,414
Adjustments: Fully-taxable equivalent adjustments 1
1,400
1,424
1,570
5,796
6,334
Total interest income - FTE
$
35,043
$
34,174
$
39,447
$
142,655
$
153,748
Net interest income
$
18,865
$
16,232
$
15,374
$
64,541
$
62,967
Adjustments: Fully-taxable equivalent adjustments 1
1,400
1,424
1,570
5,796
6,334
Net interest income - FTE
$
20,265
$
17,656
$
16,944
$
70,337
$
69,301
Net interest margin
1.78
%
1.53
%
1.51
%
1.55
%
1.65
%
Effect of fully-taxable equivalent adjustments 1
0.13
%
0.14
%
0.16
%
0.13
%
0.17
%
Net interest margin - FTE
1.91
%
1.67
%
1.67
%
1.68
%
1.82
%
Allowance for loan losses
$
29,484
$
26,917
$
21,840
$
29,484
$
21,840
Loans
$
3,059,231
$
3,012,914
$
2,963,547
$
3,059,231
$
2,963,547
Adjustments: PPP loans
(50,554
)
(58,337
)
-
(50,554
)
-
Loans, excluding PPP loans
$
3,008,677
$
2,954,577
$
2,963,547
$
3,008,677
$
2,963,547
Allowance for loan losses to loans
0.96
%
0.89
%
0.74
%
0.96
%
0.74
%
Effect of PPP loans
0.02
%
0.02
%
0.00
%
0.02
%
0.00
%
Allowance for loan losses to loans, excluding PPP loans
0.98
%
0.91
%
0.74
%
0.98
%
0.74
%
1 Assuming a 21% tax rate
First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures Dollar amounts
in thousands, except per share data
Three Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2020
2020
2019
2020
2019
Income before income taxes - GAAP
$
14,145
$
9,806
$
7,698
$
33,898
$
27,156
Adjustments: Write-down of other real estate owned
-
2,065
-
2,065
-
Adjusted income before income taxes
$
14,145
$
11,871
$
7,698
$
35,963
$
27,156
Income tax provision - GAAP
$
3,055
$
1,395
$
602
$
4,445
$
1,917
Adjustments: Write-down of other real estate owned
-
434
-
434
-
Adjusted income tax provision
$
3,055
$
1,829
$
602
$
4,879
$
1,917
Net income - GAAP
$
11,090
$
8,411
$
7,096
$
29,453
$
25,239
Adjustments: Write-down of other real estate owned
-
1,631
-
1,631
-
Adjusted net income
$
11,090
$
10,042
$
7,096
$
31,084
$
25,239
Diluted average common shares outstanding
9,914,022
9,773,224
9,843,829
9,842,425
10,044,483
Diluted earnings per share - GAAP
$
1.12
$
0.86
$
0.72
$
2.99
$
2.51
Adjustments: Effect of write-down of other real estate owned
-
0.17
-
0.17
-
Adjusted diluted earnings per share
$
1.12
$
1.03
$
0.72
$
3.16
$
2.51
Return on average assets
1.02
%
0.78
%
0.69
%
0.69
%
0.65
%
Effect of write-down of other real estate owned
0.00
%
0.15
%
0.00
%
0.04
%
0.00
%
Adjusted return on average assets
1.02
%
0.93
%
0.69
%
0.73
%
0.65
%
Return on average shareholders' equity
13.64
%
10.67
%
9.46
%
9.39
%
8.52
%
Effect of write-down of other real estate owned
0.00
%
2.07
%
0.00
%
0.52
%
0.00
%
Adjusted return on average shareholders' equity
13.64
%
12.74
%
9.46
%
9.91
%
8.52
%
Return on average tangible common equity
13.84
%
10.83
%
9.61
%
9.53
%
8.65
%
Effect of write-down of other real estate owned
0.00
%
2.10
%
0.00
%
0.53
%
0.00
%
Adjusted return on average tangible common equity
13.84
%
12.93
%
9.61
%
10.06
%
8.65
%
Effective income tax rate
21.6
%
14.2
%
7.8
%
13.1
%
7.1
%
Effect of write-down of other real estate owned
0.0
%
1.2
%
0.0
%
0.5
%
0.0
%
Adjusted effective income tax rate
21.6
%
15.4
%
7.8
%
13.6
%
7.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210120005715/en/
Investors/Analysts Paula Deemer
Director of Corporate Administration (317) 428-4628
investors@firstib.com
Media Nicole Lorch Executive Vice
President & Chief Operating Officer (317) 532-7906
nlorch@firstib.com
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