First Internet Bancorp (the “Company”) (Nasdaq: INBK), the
parent company of First Internet Bank (the “Bank”), announced today
financial and operational results for the second quarter ended June
30, 2024.
Second Quarter 2024 Financial
Highlights
- Net income of $5.8 million and adjusted net income1 of $6.2
million, increases of 11.5% and 20.2%, respectively, from the first
quarter of 2024
- Diluted earnings per share of $0.67 and adjusted diluted
earnings per share1 of $0.72, increases of 13.6% and 22.0%,
respectively, from the first quarter of 2024
- Net interest income of $21.3 million and fully-taxable
equivalent net interest income1 of $22.5 million, increases of 2.9%
and 2.6%, respectively, from the first quarter of 2024
- Net interest margin of 1.67% and fully-taxable equivalent
net interest margin1 of 1.76%, both increases of 1 basis point from
the first quarter of 2024
- Noninterest income of $11.0 million, a 32.2% increase from
the first quarter of 2024
- Relative to the first quarter of 2024, total revenue growth
of 11.3% outpaced noninterest expense growth and adjusted
noninterest expense1 growth of 6.2% and 3.5%, respectively,
resulting in positive operating leverage
- Loan growth of $51.3 million, a 1.3% increase from the first
quarter of 2024
- Nonperforming loans to total loans of 0.33%; net charge-offs
to average loans of 0.14%; allowance for credit losses to total
loans of 1.10%
- Tangible book value per share1 of $42.37, a 1.3% increase
from the first quarter of 2024, and a 6.3% increase from the second
quarter of 2023
“Our strong upward earnings trajectory continued in the second
quarter of 2024, driven by an increasingly diversified revenue
base,” said David Becker, Chairman and Chief Executive Officer.
“The optimization of our loan portfolio, solid loan growth,
increasing asset yields, and stabilization of funding costs have
led to improved net interest income.”
“At the same time, the continued growth of our SBA business,
alongside other strategic initiatives, has helped drive improvement
in noninterest income, which represented nearly one-third of total
revenues during the first half of 2024, up from just under
one-quarter of revenues for the comparable period a year ago.”
Mr. Becker concluded, “Entering the second half of the year, we
remain confident in our ability to deliver continued improvement in
operating fundamentals, while maintaining our rigorous approach to
managing risk. I want to thank the entire First Internet team for
their contribution towards our strong results and continued
success.”
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."
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2024 was $21.3
million, compared to $20.7 million for the first quarter of 2024,
and $18.1 million for the second quarter of 2023. On a
fully-taxable equivalent basis, net interest income for the second
quarter of 2024 was $22.5 million, compared to $21.9 million for
the first quarter of 2024, and $19.5 million for the second quarter
of 2023.
Total interest income for the second quarter of 2024 was $71.0
million, an increase of 4.1% compared to the first quarter of 2024,
and an increase of 22.1% compared to the second quarter of 2023. On
a fully-taxable equivalent basis, total interest income for the
second quarter of 2024 was $72.1 million, an increase of 4.0%
compared to the first quarter of 2024, and an increase of 21.3%
compared to the second quarter of 2023. The yield on average
interest-earning assets for the second quarter of 2024 increased to
5.54% from 5.45% for the first quarter of 2024, due to a 10 basis
point (“bp”) increase in the yield earned on loans and a 21 bp
increase in the yield earned on securities, partially offset by an
11 bp decrease in the yield earned on other earning assets.
Compared to the linked quarter, average loan balances, including
loans held-for-sale, increased $44.1 million, or 1.1%, while the
average balance of securities increased $41.0 million, or 5.8%, and
the average balance of other earning assets increased $34.9
million, or 8.0%.
Interest income earned on commercial loans was higher due
primarily to increased average balances within the construction,
small business lending and franchise finance portfolios. This was
partially offset by lower average balances in the investor
commercial real estate, public finance and healthcare finance
portfolios. The continued shift in the loan mix reflects the
Company’s focus on variable rate and higher-yielding products, in
part, to help improve the interest rate risk profile of the balance
sheet.
In the consumer loan portfolio, interest income was up due to
the combination of slightly higher average balances and higher
yields in the trailers, recreational vehicles and other consumer
loan portfolios.
The yield on funded portfolio loan originations was 8.88% in the
second quarter of 2024, an increase of 4 bps compared to the first
quarter of 2024, and an increase of 46 bps compared to the second
quarter of 2023.
Interest income earned on securities during the second quarter
of 2024 increased $0.8 million, or 11.8%, compared to the first
quarter of 2024 as the yield on the portfolio increased 21 bps to
4.02%, driven primarily by higher yields on new purchases. Interest
income earned on other earning asset balances increased $0.4
million, or 5.8%, in the second quarter of 2024 compared to the
linked quarter, due primarily to higher average cash balances,
partially offset by lower yields.
Total interest expense for the second quarter of 2024 was $49.6
million, an increase of $2.2 million, or 4.6%, compared to the
linked quarter as short-term rates remained stable throughout the
quarter while average interest-bearing deposit balances increased
$186.0 million, or 4.7%. Interest expense related to
interest-bearing deposits increased $2.4 million, or 5.6%, driven
primarily by certificates of deposits (“CDs”), interest-bearing
demand deposits, money market accounts and BaaS-brokered deposits.
The cost of interest-bearing deposits was 4.29% for the second
quarter of 2024, compared to 4.25% for the first quarter of
2024.
Average CD balances increased $148.9 million, or 9.1%, compared
to the linked quarter, driven by strong consumer demand, while the
cost of funds increased 8 bps. The increase in the total cost of
CDs was the lowest in the past two years, reflecting the narrowing
gap between rates on new production/renewals and maturities.
Assuming pricing remains in line with the second quarter, rates on
new CD production are 6 – 8 bps lower than the rates on CDs
maturing in the second half of 2024.
The average balance of interest-bearing demand deposits
increased $59.0 million, or 14.2%, due to growth in fintech
partnership deposits, while the cost of funds increased 15 bps. The
average balance of money market accounts increased $25.0 million,
or 2.1%, while the cost of funds increased 5 bps due to growth in
larger-balance accounts. The average balance of BaaS – brokered
deposits increased $34.3 million, or 40.2%, due to higher payments
volumes, while the cost of funds decreased 2 bps.
These increases were partially offset by lower average brokered
deposit balances, which decreased $81.7 million, or 13.5%, as
excess liquidity was used to pay down $139.0 million of higher-cost
brokered deposits.
Net interest margin (“NIM”) was 1.67% for the second quarter of
2024, up from 1.66% for the first quarter of 2024 and up from 1.53%
for the second quarter of 2023. Fully-taxable equivalent NIM (“FTE
NIM”) was 1.76% for the second quarter of 2024, up from 1.75% for
the first quarter of 2024 and up from 1.64% for the second quarter
of 2023. The pace of increase in NIM and FTE NIM was down compared
to the last two quarters due primarily to lower growth in average
loan balances as the Company experienced both early payoffs and
later-than-anticipated funding of larger-balance loans.
Noninterest Income
Noninterest income for the second quarter of 2024 was $11.0
million, compared to $8.3 million for the first quarter of 2024,
and $5.9 million for the second quarter of 2023. Gain on sale of
loans totaled $8.3 million in the second quarter of 2024,
increasing $1.8 million, or 26.9%, compared to the linked quarter.
Gain on sale revenue consisted almost entirely of sales of U.S.
Small Business Administration (“SBA”) 7(a) guaranteed loans during
the second quarter of 2024. Loan sale volume was up 18.9% and net
premiums increased 6 bps compared to the linked quarter. Other
income increased $1.2 million during the quarter due primarily to
distributions from fund investments. These increases were partially
offset by a decline of $0.2 million in net loan servicing revenue
driven by the fair value adjustment to the loan servicing
asset.
Noninterest Expense
Noninterest expense totaled $22.3 million for the second quarter
of 2024, compared to $21.0 million for the first quarter of 2024,
and $18.7 million for the second quarter of 2023, representing
increases of 6.2% and 19.6%, respectively. Excluding non-recurring
costs of almost $0.6 million related to IT termination fees and
anniversary expenses, adjusted noninterest expense totaled $21.8
million for the second quarter of 2024, an increase of $0.7
million, or 3.5%, compared to the linked quarter. The increase was
due mainly to higher salaries and employee benefits, consulting and
professional fees and loan expenses, partially offset by lower
marketing expenses.
The increase in recurring salaries and employee benefits was
$0.5 million and was due primarily to higher small business
incentive compensation and staff additions in small business
lending and risk management. Consulting and professional fees
increased $0.2 million due to the timing of outsourced audit
services. Loan expenses increased $0.2 million due mainly to
collection costs and third-party servicer fees. The decrease in
marketing expenses of $0.1 million was due to lower advertising and
media spend.
Income Taxes
The Company recorded income tax expense of $0.2 million and an
effective tax rate of 3.6% for the second quarter of 2024, compared
to income tax expense of $0.4 million and an effective tax rate of
7.6% for the first quarter of 2024, and an income tax benefit of
$0.2 million for the second quarter of 2023.
Loans and Credit Quality
Total loans as of June 30, 2024 were $4.0 billion, an increase
of $51.3 million, or 1.3%, compared to March 31, 2024, and an
increase of $314.3 million, or 8.6%, compared to June 30, 2023.
Total commercial loan balances were $3.1 billion as of June 30,
2024, an increase of $46.9 million, or 1.5%, compared to March 31,
2024, and an increase of $297.0 million, or 10.5%, compared to June
30, 2023. Compared to the linked quarter, the increase in
commercial loan balances was driven primarily by growth in investor
commercial real estate, small business lending and franchise
finance balances. These items were partially offset by decreases in
the commercial and industrial, single tenant lease financing,
public finance and healthcare finance portfolios. Quarter-end
balances in the commercial and industrial and construction
portfolios were impacted by early payoffs of higher-yielding
variable rate loans. The increase in investor commercial real
estate balances included loans with strong variable rate pricing
that closed later in the quarter and, therefore, had very little
impact on interest income for the quarter.
Total consumer loan balances were $800.5 million as of June 30,
2024, an increase of $7.0 million, or 0.9%, compared to March 31,
2024, and an increase of $27.8 million, or 3.6%, compared to June
30, 2023. The increase compared to the linked quarter was due
primarily to higher balances in the trailers, recreational vehicles
and other consumer loan portfolios, partially offset by a decrease
in the residential mortgage portfolio.
Total delinquencies 30 days or more past due were 0.56% of total
loans as of June 30, 2024, compared to 0.53% at March 31, 2024, and
0.09% as of June 30, 2023. The slight increase compared to the
linked quarter was due primarily to an increase in delinquencies in
residential mortgage loans.
Nonperforming loans were 0.33% of total loans as of June 30,
2024, unchanged from March 31, 2024, and compared to 0.17% as of
June 30, 2023. Nonperforming loans totaled $13.0 million at June
30, 2024, down slightly from $13.1 million at March 31, 2024, and
up from $6.2 million as of June 30, 2023. Additionally, the
composition of nonperforming loans at the end of the second quarter
of 2024 was relatively consistent with the linked quarter.
The allowance for credit losses (“ACL”) as a percentage of total
loans was 1.10% as of June 30, 2024, compared to 1.05% as of March
31, 2024, and 0.99% as of June 30, 2023. The increase in the ACL
reflects growth and higher coverage ratios in certain loan
portfolios as well as additional reserves related to small business
lending, partially offset by the positive impact of economic data
on forecasted loss rates and qualitative factors on other
portfolios.
Net charge-offs of $1.4 million were recognized during the
second quarter of 2024, resulting in net charge-offs to average
loans of 0.14%, compared to $0.5 million, or 0.05%, for the first
quarter of 2024, and $1.6 million, or 0.17%, for the second quarter
of 2023. Net charge-offs in the second quarter of 2024 were driven
primarily by franchise finance, including one loan that had been
previously reserved for, and small business lending.
The provision for credit losses in the second quarter of 2024
was $4.0 million, compared to $2.4 million for the first quarter of
2024, and $1.7 million for the second quarter of 2023. The
provision for the second quarter of 2024 was driven primarily by
growth and changes in the loan composition, net charge-offs and an
increase in reserves related to small business lending, partially
offset by the positive impact of economic forecasts and adjustments
to qualitative factors on other portfolios.
Capital
As of June 30, 2024, total shareholders’ equity was $372.0
million, an increase of $5.2 million, or 1.4%, compared to March
31, 2024, and an increase of $17.6 million, or 5.0%, compared to
June 30, 2023. The increase in total shareholders’ equity during
the second quarter of 2024 compared to the linked quarter was due
primarily to the net income earned during the quarter. Book value
per common share increased to $42.91 as of June 30, 2024, up from
$42.37 as of March 31, 2024, and $40.38 as of June 30, 2023.
Tangible book value per share was $42.37 as of June 30, 2024, up
from $41.83 as of March 31, 2024, and $39.85 as of June 30,
2023.
The following table presents the Company’s and the Bank’s
regulatory and other capital ratios as of June 30, 2024.
As of June 30, 2024
Company
Bank
Total shareholders' equity to assets
6.96%
8.45%
Tangible common equity to tangible assets
1
6.88%
8.37%
Tier 1 leverage ratio 2
7.24%
8.77%
Common equity tier 1 capital ratio 2
9.47%
11.47%
Tier 1 capital ratio 2
9.47%
11.47%
Total risk-based capital ratio 2
13.13%
12.58%
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 2:00 p.m.
Eastern Time on Thursday, July 25, 2024 to discuss its quarterly
financial results. The call can be accessed via telephone at (888)
259-6580; access code: 10885532. A recorded replay can be accessed
through August 25, 2024 by dialing (877) 674-7070; access code:
885532.
Additionally, interested parties can listen to a live webcast of
the call on the 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
$5.3 billion as of June 30, 2024. The Company’s subsidiary, First
Internet Bank, opened for business in 1999 as an industry pioneer
in the branchless delivery of banking services. First Internet Bank
provides consumer and small business deposit, SBA financing,
franchise finance, consumer loans, and specialty finance services
nationally as well as commercial real estate loans, construction
loans, commercial and industrial loans, and treasury management
services on a regional basis. 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 First
Internet Bank, including its products and services, is available at
www.firstib.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements with respect to
the financial condition, results of operations, trends in lending
policies and loan programs, plans and prospective business
partnerships, objectives, future performance and business of the
Company. Forward-looking statements are generally identifiable by
the use of words such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “growth,” ”improve,” “may,”
“ongoing,” “opportunities,” “pending,” “plan,” “position,”
“preliminary,” “remain,” “should,” “thereafter,” “well-positioned,”
“will,” 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. Such statements are
subject to certain risks and uncertainties including: our business
and operations and the business and operations of our vendors and
customers: general economic conditions, whether national or
regional, and conditions in the lending markets in which we
participate that may have an adverse effect on the demand for our
loans and other products; our credit quality and related levels of
nonperforming assets and loan losses, and the value and salability
of the real estate that is the collateral for our loans. 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 and industrial, construction, and SBA
loan portfolios; competition with national, regional and community
financial institutions; the loss of any key members of senior
management; the anticipated impacts of inflation and rising
interest rates on the general economy; 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, adjusted total revenue, adjusted noninterest
income, adjusted noninterest expense, adjusted income before income
taxes, adjusted income tax provision (benefit), adjusted net
income, adjusted diluted earnings per share, adjusted return on
average assets, adjusted return on average shareholders’ equity and
adjusted return on average tangible common equity 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 Six Months Ended
June 30, March 31, June 30, June 30,
June 30,
2024
2024
2023
2024
2023
Net income
$
5,775
$
5,181
$
3,882
$
10,956
$
865
Per share and share information Earnings per share - basic
$
0.67
$
0.60
$
0.44
$
1.26
$
0.10
Earnings per share - diluted
0.67
0.59
0.44
1.25
0.10
Dividends declared per share
0.06
0.06
0.06
0.12
0.12
Book value per common share
42.91
42.37
40.38
42.91
40.38
Tangible book value per common share 1
42.37
41.83
39.85
42.37
39.85
Common shares outstanding
8,667,894
8,655,854
8,774,507
8,667,894
8,774,507
Average common shares outstanding: Basic
8,594,315
8,679,429
8,903,213
8,684,093
8,963,308
Diluted
8,656,215
8,750,297
8,908,180
8,750,017
8,980,262
Performance ratios Return on average assets
0.44
%
0.40
%
0.32
%
0.42
%
0.04
%
Return on average shareholders' equity
6.28
%
5.64
%
4.35
%
5.96
%
0.48
%
Return on average tangible common equity 1
6.36
%
5.71
%
4.40
%
6.04
%
0.49
%
Net interest margin
1.67
%
1.66
%
1.53
%
1.67
%
1.64
%
Net interest margin - FTE 1,2
1.76
%
1.75
%
1.64
%
1.76
%
1.76
%
Capital ratios 3 Total shareholders' equity to assets
6.96
%
6.87
%
7.16
%
6.96
%
7.16
%
Tangible common equity to tangible assets 1
6.88
%
6.79
%
7.07
%
6.88
%
7.07
%
Tier 1 leverage ratio
7.24
%
7.33
%
7.63
%
7.24
%
7.63
%
Common equity tier 1 capital ratio
9.47
%
9.52
%
10.10
%
9.47
%
10.10
%
Tier 1 capital ratio
9.47
%
9.52
%
10.10
%
9.47
%
10.10
%
Total risk-based capital ratio
13.13
%
13.18
%
13.87
%
13.13
%
13.87
%
Asset quality Nonperforming loans
$
12,978
$
13,050
$
6,227
$
12,978
$
6,227
Nonperforming assets
13,055
13,425
6,397
13,055
6,397
Nonperforming loans to loans
0.33
%
0.33
%
0.17
%
0.33
%
0.17
%
Nonperforming assets to total assets
0.24
%
0.25
%
0.13
%
0.24
%
0.13
%
Allowance for credit losses - loans to: Loans
1.10
%
1.05
%
0.99
%
1.10
%
0.99
%
Nonperforming loans
334.5
%
313.3
%
579.1
%
334.5
%
579.1
%
Net charge-offs to average loans
0.14
%
0.05
%
0.17
%
0.10
%
0.49
%
Average balance sheet information Loans
$
3,930,976
$
3,899,667
$
3,653,839
$
3,910,322
$
3,614,054
Total securities
744,537
703,509
604,182
724,023
594,777
Other earning assets
469,045
434,118
511,295
451,582
421,793
Total interest-earning assets
5,150,305
5,030,216
4,771,623
5,090,261
4,636,453
Total assets
5,332,776
5,207,936
4,927,712
5,270,356
4,788,209
Noninterest-bearing deposits
116,939
113,341
117,496
115,140
126,194
Interest-bearing deposits
4,172,976
3,987,009
3,713,086
4,079,992
3,563,359
Total deposits
4,289,915
4,100,350
3,830,582
4,195,132
3,689,553
Shareholders' equity
369,825
369,371
358,312
369,598
360,779
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) Dollar
amounts in thousands
June 30, March 31,
June 30,
2024
2024
2023
Assets Cash and due from banks
$
6,162
$
6,638
$
9,503
Interest-bearing deposits
390,624
474,626
456,128
Securities available-for-sale, at fair value
488,572
482,431
379,394
Securities held-to-maturity, at amortized cost, net of allowance
for credit losses
270,349
235,738
230,605
Loans held-for-sale
19,384
22,589
32,001
Loans
3,961,146
3,909,804
3,646,832
Allowance for credit losses - loans
(43,405
)
(40,891
)
(36,058
)
Net loans
3,917,741
3,868,913
3,610,774
Accrued interest receivable
28,118
26,809
24,101
Federal Home Loan Bank of Indianapolis stock
28,350
28,350
28,350
Cash surrender value of bank-owned life insurance
40,834
41,154
40,357
Premises and equipment, net
72,516
73,231
73,525
Goodwill
4,687
4,687
4,687
Servicing asset
13,009
11,760
8,252
Other real estate owned
-
375
106
Accrued income and other assets
62,956
63,366
49,266
Total assets
$
5,343,302
$
5,340,667
$
4,947,049
Liabilities Noninterest-bearing deposits
$
126,438
$
130,760
$
119,291
Interest-bearing deposits
4,147,484
4,143,008
3,735,017
Total deposits
4,273,922
4,273,768
3,854,308
Advances from Federal Home Loan Bank
575,000
574,936
614,931
Subordinated debt
104,993
104,915
104,684
Accrued interest payable
3,419
3,382
3,338
Accrued expenses and other liabilities
14,015
16,927
15,456
Total liabilities
4,971,349
4,973,928
4,592,717
Shareholders' equity Voting common stock
185,175
184,720
186,545
Retained earnings
217,365
212,121
200,973
Accumulated other comprehensive loss
(30,587
)
(30,102
)
(33,186
)
Total shareholders' equity
371,953
366,739
354,332
Total liabilities and shareholders' equity
$
5,343,302
$
5,340,667
$
4,947,049
First Internet Bancorp Condensed Consolidated Statements
of Income (unaudited) Dollar amounts in thousands, except per
share data
Three Months Ended Six Months
Ended June 30, March 31, June 30, June
30, June 30,
2024
2024
2023
2024
2023
Interest income Loans
$
57,094
$
55,435
$
46,906
$
112,529
$
90,749
Securities - taxable
6,476
5,694
3,835
12,170
7,441
Securities - non-taxable
970
969
860
1,939
1,658
Other earning assets
6,421
6,067
6,521
12,488
10,307
Total interest income
70,961
68,165
58,122
139,126
110,155
Interest expense Deposits
44,495
42,129
34,676
86,624
61,946
Other borrowed funds
5,139
5,302
5,301
10,441
10,490
Total interest expense
49,634
47,431
39,977
97,065
72,436
Net interest income
21,327
20,734
18,145
42,061
37,719
Provision for credit losses
4,031
2,448
1,698
6,479
11,113
Net interest income after provision for credit losses
17,296
18,286
16,447
35,582
26,606
Noninterest income Service charges and fees
246
220
218
466
427
Loan servicing revenue
1,470
1,323
850
2,793
1,635
Loan servicing asset revaluation
(829
)
(434
)
(358
)
(1,263
)
(413
)
Mortgage banking activities
-
-
-
-
76
Gain on sale of loans
8,292
6,536
4,868
14,828
8,929
Other
1,854
702
293
2,556
663
Total noninterest income
11,033
8,347
5,871
19,380
11,317
Noninterest expense Salaries and employee benefits
12,462
11,796
10,706
24,258
22,500
Marketing, advertising and promotion
609
736
705
1,345
1,549
Consulting and professional fees
1,022
853
711
1,875
1,637
Data processing
606
564
520
1,170
1,179
Loan expenses
1,597
1,445
1,072
3,042
3,049
Premises and equipment
3,154
2,826
2,661
5,980
5,438
Deposit insurance premium
1,172
1,145
936
2,317
1,479
Other
1,714
1,658
1,359
3,372
2,793
Total noninterest expense
22,336
21,023
18,670
43,359
39,624
Income (loss) before income taxes
5,993
5,610
3,648
11,603
(1,701
)
Income tax provision (benefit)
218
429
(234
)
647
(2,566
)
Net income
$
5,775
$
5,181
$
3,882
$
10,956
$
865
Per common share data Earnings per share - basic
$
0.67
$
0.60
$
0.44
$
1.26
$
0.10
Earnings per share - diluted
$
0.67
$
0.59
$
0.44
$
1.25
$
0.10
Dividends declared per share
$
0.06
$
0.06
$
0.06
$
0.12
$
0.12
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 June 30,
2024 March 31, 2024 June 30, 2023
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
$
3,936,723
$
57,094
5.83
%
$
3,892,589
$
55,435
5.73
%
$
3,656,146
$
46,906
5.15
%
Securities - taxable
670,502
6,476
3.88
%
627,216
5,694
3.65
%
531,040
3,835
2.90
%
Securities - non-taxable
74,035
970
5.27
%
76,293
969
5.11
%
73,142
860
4.72
%
Other earning assets
469,045
6,421
5.51
%
434,118
6,067
5.62
%
511,295
6,521
5.12
%
Total interest-earning assets
5,150,305
70,961
5.54
%
5,030,216
68,165
5.45
%
4,771,623
58,122
4.89
%
Allowance for credit losses - loans
(41,362
)
(38,611
)
(36,671
)
Noninterest-earning assets
223,833
216,331
192,760
Total assets
$
5,332,776
$
5,207,936
$
4,927,712
Liabilities Interest-bearing liabilities
Interest-bearing demand deposits
$
474,124
$
2,567
2.18
%
$
415,106
$
2,091
2.03
%
$
359,969
$
1,509
1.68
%
Savings accounts
22,987
48
0.84
%
22,521
48
0.86
%
29,915
64
0.86
%
Money market accounts
1,243,011
13,075
4.23
%
1,217,966
12,671
4.18
%
1,274,453
12,314
3.88
%
BaaS - brokered deposits
119,662
1,299
4.37
%
85,366
931
4.39
%
22,918
230
4.03
%
Certificates and brokered deposits
2,313,192
27,506
4.78
%
2,246,050
26,388
4.73
%
2,025,831
20,559
4.07
%
Total interest-bearing deposits
4,172,976
44,495
4.29
%
3,987,009
42,129
4.25
%
3,713,086
34,676
3.75
%
Other borrowed funds
652,176
5,139
3.17
%
716,735
5,302
2.98
%
719,577
5,301
2.95
%
Total interest-bearing liabilities
4,825,152
49,634
4.14
%
4,703,744
47,431
4.06
%
4,432,663
39,977
3.62
%
Noninterest-bearing deposits
116,939
113,341
117,496
Other noninterest-bearing liabilities
20,860
21,480
19,241
Total liabilities
4,962,951
4,838,565
4,569,400
Shareholders' equity
369,825
369,371
358,312
Total liabilities and shareholders' equity
$
5,332,776
$
5,207,936
$
4,927,712
Net interest income
$
21,327
$
20,734
$
18,145
Interest rate spread
1.40
%
1.39
%
1.27
%
Net interest margin
1.67
%
1.66
%
1.53
%
Net interest margin - FTE 2,3
1.76
%
1.75
%
1.64
%
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
Six Months Ended June 30, 2024 June 30,
2023 Average Interest / Yield /
Average Interest / Yield / Balance
Dividends Cost Balance Dividends
Cost Assets Interest-earning assets Loans,
including loans held-for-sale 1
$
3,914,656
$
112,529
5.78
%
$
3,619,883
$
90,749
5.06
%
Securities - taxable
648,860
12,170
3.77
%
521,533
7,441
2.88
%
Securities - non-taxable
75,163
1,939
5.19
%
73,244
1,658
4.56
%
Other earning assets
451,582
12,488
5.56
%
421,793
10,307
4.93
%
Total interest-earning assets
5,090,261
139,126
5.50
%
4,636,453
110,155
4.79
%
Allowance for credit losses
(39,986
)
(35,877
)
Noninterest-earning assets
220,081
187,633
Total assets
$
5,270,356
$
4,788,209
Liabilities Interest-bearing liabilities
Interest-bearing demand deposits
$
444,615
$
4,658
2.11
%
$
346,878
$
2,409
1.40
%
Savings accounts
22,754
96
0.85
%
34,175
145
0.86
%
Money market accounts
1,230,488
25,746
4.21
%
1,325,741
24,614
3.74
%
BaaS - brokered deposits
102,514
2,230
4.37
%
18,852
368
3.94
%
Certificates and brokered deposits
2,279,621
53,894
4.75
%
1,837,713
34,410
3.78
%
Total interest-bearing deposits
4,079,992
86,624
4.27
%
3,563,359
61,946
3.51
%
Other borrowed funds
684,456
10,441
3.07
%
719,538
10,490
2.94
%
Total interest-bearing liabilities
4,764,448
97,065
4.10
%
4,282,897
72,436
3.41
%
Noninterest-bearing deposits
115,140
126,194
Other noninterest-bearing liabilities
21,170
18,339
Total liabilities
4,900,758
4,427,430
Shareholders' equity
369,598
360,779
Total liabilities and shareholders' equity
$
5,270,356
$
4,788,209
Net interest income
$
42,061
$
37,719
Interest rate spread
1.40
%
1.38
%
Net interest margin
1.67
%
1.64
%
Net interest margin - FTE 2,3
1.76
%
1.76
%
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
June
30, 2024 March 31, 2024 June 30, 2023
Amount Percent Amount Percent
Amount Percent Commercial loans
Commercial and industrial
$
115,585
2.9
%
$
133,897
3.4
%
$
112,423
3.1
%
Owner-occupied commercial real estate
58,089
1.5
%
57,787
1.5
%
59,564
1.6
%
Investor commercial real estate
188,409
4.8
%
128,276
3.3
%
137,504
3.8
%
Construction
328,922
8.3
%
325,597
8.3
%
192,453
5.3
%
Single tenant lease financing
927,462
23.4
%
941,597
24.1
%
947,466
25.9
%
Public finance
486,200
12.3
%
498,262
12.7
%
575,541
15.8
%
Healthcare finance
202,079
5.1
%
213,332
5.5
%
245,072
6.7
%
Small business lending
270,129
6.8
%
239,263
6.1
%
170,550
4.7
%
Franchise finance
551,133
13.9
%
543,122
13.9
%
390,479
10.6
%
Total commercial loans
3,128,008
79.0
%
3,081,133
78.8
%
2,831,052
77.5
%
Consumer loans Residential mortgage
382,549
9.7
%
390,009
10.0
%
396,154
10.9
%
Home equity
21,405
0.5
%
22,753
0.6
%
24,375
0.7
%
Trailers
197,738
5.0
%
191,353
4.9
%
178,035
4.9
%
Recreational vehicles
150,151
3.8
%
145,475
3.7
%
133,283
3.7
%
Other consumer loans
48,638
1.2
%
43,847
1.1
%
40,806
1.1
%
Total consumer loans
800,481
20.2
%
793,437
20.3
%
772,653
21.3
%
Net deferred loan fees, premiums, discounts and other 1
32,657
0.8
%
35,234
0.9
%
43,127
1.2
%
Total loans
$
3,961,146
100.0
%
$
3,909,804
100.0
%
$
3,646,832
100.0
%
June 30, 2024 March 31, 2024 June 30,
2023 Amount Percent Amount Percent
Amount Percent Deposits
Noninterest-bearing deposits
$
126,438
3.0
%
$
130,760
3.1
%
$
119,291
3.1
%
Interest-bearing demand deposits
480,141
11.2
%
423,529
9.9
%
398,899
10.3
%
Savings accounts
22,619
0.5
%
23,554
0.6
%
28,239
0.7
%
Money market accounts
1,222,197
28.6
%
1,251,230
29.2
%
1,232,719
32.0
%
BaaS - brokered deposits
140,180
3.3
%
107,911
2.5
%
25,549
0.7
%
Certificates of deposits
1,829,644
42.8
%
1,738,996
40.7
%
1,366,409
35.5
%
Brokered deposits
452,703
10.6
%
597,788
14.0
%
683,202
17.7
%
Total deposits
$
4,273,922
100.0
%
$
4,273,768
100.0
%
$
3,854,308
100.0
%
1 Includes carrying value adjustments of $25.6 million, $26.9
million and $30.5 million related to terminated interest rate swaps
associated with public finance loans as of June 30, 2024, March 31,
2024 and June 30, 2023, respectively.
First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures Dollar amounts
in thousands, except per share data
Three Months
Ended Six Months Ended June 30, March 31,
June 30, June 30, June 30,
2024
2024
2023
2024
2023
Total equity - GAAP
$
371,953
$
366,739
$
354,332
$
371,953
$
354,332
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible common equity
$
367,266
$
362,052
$
349,645
$
367,266
$
349,645
Total assets - GAAP
$
5,343,302
$
5,340,667
$
4,947,049
$
5,343,302
$
4,947,049
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible assets
$
5,338,615
$
5,335,980
$
4,942,362
$
5,338,615
$
4,942,362
Common shares outstanding
8,667,894
8,655,854
8,774,507
8,667,894
8,774,507
Book value per common share
$
42.91
$
42.37
$
40.38
$
42.91
$
40.38
Effect of goodwill
(0.54
)
(0.54
)
(0.53
)
(0.54
)
(0.53
)
Tangible book value per common share
$
42.37
$
41.83
$
39.85
$
42.37
$
39.85
Total shareholders' equity to assets
6.96
%
6.87
%
7.16
%
6.96
%
7.16
%
Effect of goodwill
(0.08
%)
(0.08
%)
(0.09
%)
(0.08
%)
(0.09
%)
Tangible common equity to tangible assets
6.88
%
6.79
%
7.07
%
6.88
%
7.07
%
Total average equity - GAAP
$
369,825
$
369,371
$
358,312
$
369,598
$
360,779
Adjustments: Average goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Average tangible common equity
$
365,138
$
364,684
$
353,625
$
364,911
$
356,092
Return on average shareholders' equity
6.28
%
5.64
%
4.35
%
5.96
%
0.48
%
Effect of goodwill
0.08
%
0.07
%
0.05
%
0.08
%
0.01
%
Return on average tangible common equity
6.36
%
5.71
%
4.40
%
6.04
%
0.49
%
Total interest income
$
70,961
$
68,165
$
58,122
$
139,126
$
110,155
Adjustments: Fully-taxable equivalent adjustments 1
1,175
1,190
1,347
2,365
2,731
Total interest income - FTE
$
72,136
$
69,355
$
59,469
$
141,491
$
112,886
Net interest income
$
21,327
$
20,734
$
18,145
$
42,061
$
37,719
Adjustments: Fully-taxable equivalent adjustments 1
1,175
1,190
1,347
2,365
2,731
Net interest income - FTE
$
22,502
$
21,924
$
19,492
$
44,426
$
40,450
Net interest margin
1.67
%
1.66
%
1.53
%
1.67
%
1.64
%
Effect of fully-taxable equivalent adjustments 1
0.09
%
0.09
%
0.11
%
0.09
%
0.12
%
Net interest margin - FTE
1.76
%
1.75
%
1.64
%
1.76
%
1.76
%
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 Six Months Ended June 30, March 31,
June 30, June 30, June 30,
2024
2024
2023
2024
2023
Total revenue - GAAP
$
32,360
$
29,081
$
24,016
$
61,441
$
49,036
Adjustments: Mortgage-related revenue
-
-
-
-
(65
)
Adjusted total revenue
$
32,360
$
29,081
$
24,016
$
61,441
$
48,971
Noninterest income - GAAP
$
11,033
$
8,347
$
5,871
$
19,380
$
11,317
Adjustments: Mortgage-related revenue
-
-
-
-
(65
)
Adjusted noninterest income
$
11,033
$
8,347
$
5,871
$
19,380
$
11,252
Noninterest expense - GAAP
$
22,336
$
21,023
$
18,670
$
43,359
$
39,624
Adjustments: Mortgage-related costs
-
-
-
-
(3,052
)
IT Termination fees
(452
)
-
-
(452
)
-
Anniversary expenses
(120
)
-
-
(120
)
-
Adjusted noninterest expense
$
21,764
$
21,023
$
18,670
$
42,787
$
36,572
Income (loss) before income taxes - GAAP
$
5,993
$
5,610
$
3,648
$
11,603
$
(1,701
)
Adjustments:1 Mortgage-related revenue
-
-
-
-
(65
)
Mortgage-related costs
-
-
-
-
3,052
Partial charge-off of C&I participation loan
-
-
-
-
6,914
IT Termination fees
452
-
-
452
-
Anniversary expenses
120
-
-
120
-
Adjusted income before income taxes
$
6,565
$
5,610
$
3,648
$
12,175
$
8,200
Income tax provision (benefit) - GAAP
$
218
$
429
$
(234
)
$
647
$
(2,566
)
Adjustments:1 Mortgage-related revenue
-
-
-
-
(14
)
Mortgage-related costs
-
-
-
-
641
Partial charge-off of C&I participation loan
-
-
-
-
1,452
IT Termination fees
95
-
-
95
-
Anniversary expenses
25
-
-
25
-
Adjusted income tax provision (benefit)
$
338
$
429
$
(234
)
$
767
$
(487
)
Net income - GAAP
$
5,775
$
5,181
$
3,882
$
10,956
$
865
Adjustments: Mortgage-related revenue
-
-
-
-
(51
)
Mortgage-related costs
-
-
-
-
2,411
Partial charge-off of C&I participation loan
-
-
-
-
5,462
IT Termination fees
357
-
-
357
-
Anniversary expenses
95
-
-
95
-
Adjusted net income
$
6,227
$
5,181
$
3,882
$
11,408
$
8,687
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 Six Months Ended June 30, March 31,
June 30, June 30, June 30,
2024
2024
2023
2024
2023
Diluted average common shares outstanding
8,656,215
8,750,297
8,908,180
8,750,017
8,980,262
Diluted earnings per share - GAAP
$
0.67
$
0.59
$
0.44
$
1.25
$
0.10
Adjustments: Effect of mortgage-related revenue
-
-
-
-
(0.01
)
Effect of mortgage-related costs
-
-
-
-
0.27
Effect of partial charge-off of C&I participation loan
-
-
-
-
0.61
Effect of IT termination fees
0.04
-
-
0.04
-
Effect of anniversary expenses
0.01
-
-
0.01
-
Adjusted diluted earnings per share
$
0.72
$
0.59
$
0.44
$
1.30
$
0.97
Return on average assets
0.44
%
0.40
%
0.32
%
0.42
%
0.04
%
Effect of mortgage-related revenue
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
Effect of mortgage-related costs
0.00
%
0.00
%
0.00
%
0.00
%
0.10
%
Effect of partial charge-off of C&I participation loan
0.00
%
0.00
%
0.00
%
0.00
%
0.23
%
Effect of IT termination fees
0.03
%
0.00
%
0.00
%
0.01
%
0.00
%
Effect of anniversary expenses
0.01
%
0.00
%
0.00
%
0.00
%
0.00
%
Adjusted return on average assets
0.48
%
0.40
%
0.32
%
0.43
%
0.37
%
Return on average shareholders' equity
6.28
%
5.64
%
4.35
%
5.96
%
0.48
%
Effect of mortgage-related revenue
0.00
%
0.00
%
0.00
%
0.00
%
(0.03
%)
Effect of mortgage-related costs
0.00
%
0.00
%
0.00
%
0.00
%
1.35
%
Effect of partial charge-off of C&I participation loan
0.00
%
0.00
%
0.00
%
0.00
%
3.05
%
Effect of IT termination fees
0.39
%
0.00
%
0.00
%
0.19
%
0.00
%
Effect of anniversary expenses
0.10
%
0.00
%
0.00
%
0.05
%
0.00
%
Adjusted return on average shareholders' equity
6.77
%
5.64
%
4.35
%
6.20
%
4.85
%
Return on average tangible common equity
6.36
%
5.71
%
4.40
%
6.04
%
0.49
%
Effect of mortgage-related revenue
0.00
%
0.00
%
0.00
%
0.00
%
(0.03
%)
Effect of mortgage-related costs
0.00
%
0.00
%
0.00
%
0.00
%
1.37
%
Effect of partial charge-off of C&I participation loan
0.00
%
0.00
%
0.00
%
0.00
%
3.09
%
Effect of IT termination fees
0.39
%
0.00
%
0.00
%
0.20
%
0.00
%
Effect of anniversary expenses
0.10
%
0.00
%
0.00
%
0.05
%
0.00
%
Adjusted return on average tangible common equity
6.85
%
5.71
%
4.40
%
6.29
%
4.92
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240722098263/en/
Investors/Analysts Paula Deemer
Director of Corporate Administration (317) 428-4628
investors@firstib.com
Media BLASTmedia for First Internet
Bank Zach Weismiller firstib@blastmedia.com
First Internet Bancorp (NASDAQ:INBK)
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From Nov 2024 to Dec 2024
First Internet Bancorp (NASDAQ:INBK)
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From Dec 2023 to Dec 2024
