First Internet Bancorp (the “Company”) (Nasdaq: INBK), the
parent company of First Internet Bank (the “Bank”), announced today
financial and operational results for the third quarter ended
September 30, 2024.
Third Quarter 2024 Financial
Highlights
- Net income of $7.0 million, an increase of 21.0% from the
second quarter of 2024
- Diluted earnings per share of $0.80, an increase of 19.4%
from the second quarter of 2024
- Net interest income of $21.8 million and fully-taxable
equivalent net interest income1 of $22.9 million, increases of 2.1%
and 1.8%, respectively, from the second quarter of 2024
- Net interest margin of 1.62% and fully-taxable equivalent
net interest margin1 of 1.70%, compared to 1.67% and 1.76%,
respectively, for the second quarter of 2024
- Noninterest income of $12.0 million, a 9.0% increase from
the second quarter of 2024
- Loan growth of $74.7 million, a 1.9% increase from the
second quarter of 2024; Deposit growth of $523.8 million, a
12.3% increase from the second quarter of 2024; Loans to
deposits ratio of 84.1%
- Nonperforming loans to total loans of 0.56%; net charge-offs
to average loans of 0.15%; allowance for credit losses to total
loans of 1.13%
- Tangible common equity to tangible assets ratio1
of 6.54%, and 7.49% ex-AOCI and adjusted for normalized cash
balances1; CET1 ratio of 9.37%
- Tangible book value per share1 of $43.89, a 3.6% increase
from the second quarter of 2024, and a 10.9% increase from the
third quarter of 2023
“Our third quarter results demonstrated strong performance
virtually across the board,” said David Becker, Chairman and Chief
Executive Officer. “Growth in net interest income, driven by higher
earning asset yields and stable funding costs, along with record
gain-on-sale revenue from the continued expansion of our national
SBA platform, propelled an increase in operating revenues for the
fifth consecutive quarter, resulting in significant positive
operating leverage.
“Additionally, robust deposit growth and the ongoing strategic
shift in loan mix have increased balance sheet flexibility,
enhanced our interest rate risk profile, and improved our liquidity
position to its strongest level in recent history, as indicated by
our loans-to-deposits ratio.
“Looking ahead, we are well-positioned to deliver increased
earnings and profitability by continuing to execute our core
strategies of revenue diversification and balance sheet
optimization. Our balance sheet and capital position are solid, and
measures of asset quality remain sound. I want to thank our
employees for their dedication and hard work in driving increased
value for our stakeholders.”
Net Interest Income and Net Interest Margin
Net interest income for the third quarter of 2024 was $21.8
million, compared to $21.3 million for the second quarter of 2024,
and $17.4 million for the third quarter of 2023. On a fully-taxable
equivalent basis, net interest income for the third quarter of 2024
was $22.9 million, compared to $22.5 million for the second quarter
of 2024, and $18.6 million for the third quarter of 2023.
Total interest income for the third quarter of 2024 was $75.0
million, an increase of 5.7% compared to the second quarter of
2024, and an increase of 19.0% compared to the third quarter of
2023. On a fully- taxable equivalent basis, total interest income
for the third quarter of 2024 was $76.1 million, an increase of
5.5% compared to the second quarter of 2024, and an increase of
18.4% compared to the third quarter of 2023. The yield on average
interest-earning assets for the third quarter of 2024 increased to
5.58% from 5.54% for the second quarter of 2024, due to a 7 basis
point (“bp”) increase in the yield earned on loans, partially
offset by a 7 bp decrease in the yield earned on other earning
assets and a 1 bp decrease in the yield earned on securities.
Compared to the linked quarter, average loan balances, including
loans held-for-sale, increased $92.6 million, or 2.4%, while the
average balance of securities increased $47.9 million, or 6.4%, and
the average balance of other earning assets increased $57.3
million, or 12.2%.
Interest income earned on commercial loans was higher due
primarily to increased average balances within the investor
commercial real estate, construction and small business lending
portfolios. This was partially offset by lower average balances in
the commercial and industrial and public finance portfolios, both
of which were impacted by early payoffs which resulted in lower
interest income compared to the prior quarter. The continued shift
in the loan mix reflects the Company’s focus on higher-yielding
variable rate 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 higher average balances and continued strong new
origination yields in the trailers, RV and other consumer loan
portfolios.
The yield on funded portfolio loan originations was 8.85% in the
third quarter of 2024, a decrease of 3 bps compared to the second
quarter of 2024, and a decrease of 7 bps compared to the third
quarter of 2023.
Interest income earned on securities during the third quarter of
2024 increased $0.5 million, or 7.4%, compared to the second
quarter of 2024, driven primarily by new purchases and relatively
stable yields on the portfolio. Interest income earned on other
earning asset balances increased $0.8 million, or 12.2%, in the
third quarter of 2024 compared to the linked quarter, due primarily
to higher average cash balances.
Total interest expense for the third quarter of 2024 was $53.2
million, an increase of $3.6 million, or 7.2%, compared to the
linked quarter as short-term rates remained stable throughout most
of the quarter while average interest-bearing deposits balances
increased $211.1 million, or 5.1%. Interest expense related to
interest-bearing deposits increased $2.9 million, or 6.6%, driven
primarily by higher balances of certificates of deposits (“CDs”),
interest-bearing demand deposits, fintech – brokered deposits and
brokered deposits. The cost of interest-bearing deposits was
relatively stable during the quarter at 4.30%, compared to 4.29%
for the second quarter of 2024.
Average CD balances increased $137.7 million, or 7.7%, compared
to the linked quarter, driven by strong consumer demand, while the
cost of funds decreased 3 bps. CD pricing reached its inflection
point during the third quarter of 2024 as the weighted average cost
of new CDs was 4.77%, or 28 bps lower than the cost of maturing
CDs. As interest rates across the yield curve began falling ahead
of the expected cut in the Fed Funds rate in September, the Company
lowered CD rates significantly during the second half of the
quarter. As a result, the weighted average cost of CD production
during the month of September was 4.48%, or almost 30 bps lower
than the average cost of new CDs for the quarter, and is 53 bps
lower than the rates on CDs maturing in the fourth quarter of
2024.
The average balance of interest-bearing demand deposits
increased $37.3 million, or 7.9%, due to growth in fintech
partnership deposits, and the cost of funds increased 6 bps. The
average balance of fintech – brokered deposits increased $33.3
million, or 27.9%, due to higher payments volumes, while the cost
of funds remained flat. The average balance of brokered deposits
increased $21.3 million, or 4.1%, compared to the linked quarter,
and the cost of funds increased 19 bps.
Interest expense was also impacted by the cost of other borrowed
funds. The average balance of FHLB advances declined during the
third quarter of 2024; however, the cost of funds increased as
lower-cost advances matured. Additionally, one of the Company’s
subordinated debt issuances converted from fixed to floating rate
early in the third quarter of 2024. As a result, the cost of other
borrowed funds increased 56 bps.
Net interest margin (“NIM”) was 1.62% for the third quarter of
2024, down from 1.67% for the second quarter of 2024 and up from
1.39% for the third quarter of 2023. Fully-taxable equivalent NIM
(“FTE NIM”) was 1.70% for the third quarter of 2024, down from
1.76% for the second quarter of 2024 and up from 1.49% for the
third quarter of 2023. NIM and FTE NIM performance for the third
quarter was affected by carrying higher cash balances, which are
estimated to have had a negative impact of 6 bps. Furthermore, the
early loan payoff activity discussed above also had a negative
impact of 6 bps.
Noninterest Income
Noninterest income for the third quarter of 2024 was $12.0
million, compared to $11.0 million for the second quarter of 2024,
and $7.4 million for the third quarter of 2023. Gain on sale of
loans totaled $9.9 million in the third quarter of 2024, increasing
$1.6 million, or 19.8%, 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
third quarter of 2024. Loan sale volume was up 22.1% while net
premiums decreased 65 bps compared to the linked quarter. Other
income decreased $0.7 million during the quarter due primarily to
lower distributions from fund investments. Net loan servicing
revenue increased by $0.1 million due to the growth in the
servicing portfolio, partially offset by the fair value adjustment
to the loan servicing asset.
Noninterest Expense
Noninterest expense totaled $22.8 million for the third quarter
of 2024, compared to $22.3 million for the second quarter of 2024,
and $19.8 million for the third quarter of 2023, representing
increases of 2.1% and 15.4%, respectively. Excluding non-recurring
costs of almost $0.6 million recognized in the second quarter of
2024, noninterest expense increased $1.0 million, or 4.7%, in the
third quarter of 2024 from the linked quarter. The increase was
driven mainly by higher salaries and employee benefits due to
higher small business lending incentive compensation as well as
staff additions in small business lending and risk management.
Income Taxes
The Company recorded income tax expense of $0.6 million and an
effective tax rate of 8.1% for the third quarter of 2024, compared
to income tax expense of $0.2 million and an effective tax rate of
3.6% for the second quarter of 2024, and an income tax benefit of
$0.4 million for the third quarter of 2023.
Loans and Credit Quality
Total loans as of September 30, 2024, were $4.0 billion, an
increase of $74.7 million, or 1.9%, compared to June 30, 2024, and
an increase of $300.8 million, or 8.1%, compared to September 30,
2023. Total commercial loan balances were $3.2 billion as of
September 30, 2024, an increase of $75.5 million, or 2.4%, compared
to June 30, 2024, and an increase of $295.2 million, or 10.2%,
compared to September 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
construction balances. These items were partially offset by
decreases in the public finance, healthcare finance and commercial
and industrial portfolios. Quarter-end balances in the commercial
and industrial and public finance portfolios were impacted by early
payoffs. The increase in investor commercial real estate balances
included loans with strong variable rate pricing that converted
from construction loans upon project completion.
Total consumer loan balances were $803.4 million as of September
30, 2024, an increase of $2.9 million, or 0.4%, compared to June
30, 2024, and an increase of $16.9 million, or 2.1%, compared to
September 30, 2023. The increase compared to the linked quarter was
due primarily to a higher balance in the trailers portfolio,
partially offset by declines in the residential mortgage and home
equity portfolios.
Total delinquencies 30 days or more past due were 0.75% of total
loans as of September 30, 2024, compared to 0.56% at June 30, 2024,
and 0.22% as of September 30, 2023. The increase compared to the
linked quarter was due primarily to an increase in delinquencies in
franchise finance and small business lending loans. Nonperforming
loans were 0.56% of total loans as of September 30, 2024, up from
0.33% as of June 30, 2024, and 0.16% as of September 30, 2023.
Nonperforming loans totaled $22.5 million as of September 30, 2024,
up from $13.0 million as of June 30, 2024, and up from $5.9 million
as of September 30, 2023. The increase in nonperforming loans at
the end of the third quarter of 2024 was due primarily to franchise
finance and small business lending loans that were placed on
nonaccrual during the quarter. At quarter end, there were $10.1
million of specific reserves held against the balance of
nonperforming loans.
The allowance for credit losses (“ACL”) as a percentage of total
loans was 1.13% as of September 30, 2024, compared to 1.10% as of
June 30, 2024, and 0.98% as of September 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 and franchise finance, partially offset by the
positive impact of economic data on forecasted loss rates and
qualitative factors on other portfolios.
Net charge-offs of $1.5 million were recognized during the third
quarter of 2024, resulting in net charge-offs to average loans of
0.15%, compared to $1.4 million, or 0.14%, for the second quarter
of 2024, and $1.5 million, or 0.16%, for the third quarter of 2023.
Net charge-offs in the third quarter of 2024 were driven primarily
by small business lending.
The provision for credit losses in the third quarter of 2024 was
$3.4 million, compared to $4.0 million for the second quarter of
2024 and $1.9 million for the third quarter of 2023. The provision
for the third quarter of 2024 was driven primarily by growth and
changes in the loan composition, net charge-offs and an increase in
reserves related to franchise finance and small business lending,
partially offset by the positive impact of economic forecasts and
adjustments to qualitative factors on other portfolios.
Capital
As of September 30, 2024, total shareholders’ equity was $385.1
million, an increase of $13.2 million, or 3.5%, compared to June
30, 2024, and an increase of $37.4 million, or 10.8%, compared to
September 30, 2023. The increase in total shareholders’ equity
during the third quarter compared to the linked quarter was 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 $44.43 as of September 30, 2024, up from
$42.91 as of June 30, 2024, and $40.11 as of September 30, 2023.
Tangible book value per share was $43.89 as of September 30, 2024,
up from $42.37 as of June 30, 2024, and $39.57 as of September 30,
2023.
The following table presents the Company’s and the Bank’s
regulatory and other capital ratios as of September 30, 2024.
As of September 30, 2024
Company
Bank
Total shareholders' equity to assets
6.61%
7.95%
Tangible common equity to tangible assets
1
6.54%
7.87%
Tier 1 leverage ratio 2
7.13%
8.53%
Common equity tier 1 capital ratio 2
9.37%
11.22%
Tier 1 capital ratio 2
9.37%
11.22%
Total risk-based capital ratio 2
12.79%
12.34%
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, October 24, 2024, to discuss its
quarterly financial results. The call can be accessed via telephone
at (888) 259-6580; access code: 59135394. A recorded replay can be
accessed through November 24, 2024, by dialing (877) 674-7070;
access code: 135394#.
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
$5.8 billion as of September 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,” “enhance,” “estimate,” “expanding,” “expect,” “going
forward,” “growth,” ”improve,” “increase,” “may,” “ongoing,”
“opportunities,” “pending,” “plan,” “position,” “preliminary,”
“remain,” “should,” “stable,” “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
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Net income
$
6,990
$
5,775
$
3,409
$
17,946
$
4,274
Per share and share information Earnings per share -
basic
$
0.80
$
0.67
$
0.39
$
2.07
$
0.48
Earnings per share - diluted
0.80
0.67
0.39
2.05
0.48
Dividends declared per share
0.06
0.06
0.06
0.18
0.18
Book value per common share
44.43
42.91
40.11
44.43
40.11
Tangible book value per common share 1
43.89
42.37
39.57
43.89
39.57
Common shares outstanding
8,667,894
8,667,894
8,669,673
8,667,894
8,669,673
Average common shares outstanding: Basic
8,696,634
8,594,315
8,744,385
8,688,304
8,889,532
Diluted
8,768,731
8,656,215
8,767,217
8,756,544
8,907,748
Performance ratios Return on average assets
0.50
%
0.44
%
0.26
%
0.45
%
0.12
%
Return on average shareholders' equity
7.32
%
6.28
%
3.79
%
6.42
%
1.59
%
Return on average tangible common equity 1
7.41
%
6.36
%
3.84
%
6.51
%
1.61
%
Net interest margin
1.62
%
1.67
%
1.39
%
1.65
%
1.55
%
Net interest margin - FTE 1,2
1.70
%
1.76
%
1.49
%
1.74
%
1.66
%
Capital ratios 3 Total shareholders' equity to assets
6.61
%
6.96
%
6.73
%
6.61
%
6.73
%
Tangible common equity to tangible assets 1
6.54
%
6.88
%
6.64
%
6.54
%
6.64
%
Tier 1 leverage ratio
7.13
%
7.24
%
7.32
%
7.13
%
7.32
%
Common equity tier 1 capital ratio
9.37
%
9.47
%
9.56
%
9.37
%
9.56
%
Tier 1 capital ratio
9.37
%
9.47
%
9.56
%
9.37
%
9.56
%
Total risk-based capital ratio
12.79
%
13.13
%
13.13
%
12.79
%
13.13
%
Asset quality Nonperforming loans
$
22,478
$
12,978
$
5,885
$
22,478
$
5,885
Nonperforming assets
22,944
13,055
6,069
22,944
6,069
Nonperforming loans to loans
0.56
%
0.33
%
0.16
%
0.56
%
0.16
%
Nonperforming assets to total assets
0.39
%
0.24
%
0.12
%
0.39
%
0.12
%
Allowance for credit losses - loans to: Loans
1.13
%
1.10
%
0.98
%
1.13
%
0.98
%
Nonperforming loans
203.4
%
334.5
%
619.4
%
203.4
%
619.4
%
Net charge-offs to average loans
0.15
%
0.14
%
0.16
%
0.12
%
0.38
%
Average balance sheet information Loans
$
4,022,196
$
3,930,976
$
3,700,410
$
3,947,885
$
3,643,156
Total securities
792,409
744,537
622,220
746,985
604,026
Other earning assets
526,384
469,045
653,375
476,697
499,835
Total interest-earning assets
5,348,153
5,150,305
4,976,667
5,176,852
4,751,104
Total assets
5,523,910
5,332,776
5,137,474
5,355,491
4,905,910
Noninterest-bearing deposits
113,009
116,939
127,540
114,425
126,647
Interest-bearing deposits
4,384,078
4,172,976
3,911,696
4,182,094
3,680,746
Total deposits
4,497,087
4,289,915
4,039,236
4,296,519
3,807,393
Shareholders' equity
380,061
369,825
356,701
373,111
359,405
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
September 30,
June 30,
September 30,
2024
2024
2023
Assets Cash and due from banks
$
6,539
$
6,162
$
3,595
Interest-bearing deposits
705,940
390,624
517,610
Securities available-for-sale, at fair value
575,257
488,572
450,827
Securities held-to-maturity, at amortized cost, net of allowance
for credit losses
263,320
270,349
231,928
Loans held-for-sale
32,996
19,384
31,669
Loans
4,035,880
3,961,146
3,735,068
Allowance for credit losses - loans
(45,721
)
(43,405
)
(36,452
)
Net loans
3,990,159
3,917,741
3,698,616
Accrued interest receivable
27,750
28,118
23,761
Federal Home Loan Bank of Indianapolis stock
28,350
28,350
28,350
Cash surrender value of bank-owned life insurance
41,111
40,834
40,619
Premises and equipment, net
72,150
72,516
74,197
Goodwill
4,687
4,687
4,687
Servicing asset
14,662
13,009
9,579
Other real estate owned
251
-
106
Accrued income and other assets
60,087
62,956
53,479
Total assets
$
5,823,259
$
5,343,302
$
5,169,023
Liabilities Noninterest-bearing deposits
$
111,591
$
126,438
$
125,265
Interest-bearing deposits
4,686,119
4,147,484
3,958,280
Total deposits
4,797,710
4,273,922
4,083,545
Advances from Federal Home Loan Bank
515,000
575,000
614,933
Subordinated debt
105,071
104,993
104,761
Accrued interest payable
2,808
3,419
2,968
Accrued expenses and other liabilities
17,541
14,015
15,072
Total liabilities
5,438,130
4,971,349
4,821,279
Shareholders' equity Voting common stock
185,631
185,175
185,085
Retained earnings
223,824
217,365
203,856
Accumulated other comprehensive loss
(24,326
)
(30,587
)
(41,197
)
Total shareholders' equity
385,129
371,953
347,744
Total liabilities and shareholders' equity
$
5,823,259
$
5,343,302
$
5,169,023
First Internet Bancorp Condensed Consolidated
Statements of Income (unaudited) Dollar amounts in thousands,
except per share data
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Interest income Loans
$
59,792
$
57,094
$
48,898
$
172,321
$
139,647
Securities - taxable
6,953
6,476
4,301
19,123
11,742
Securities - non-taxable
1,042
970
912
2,981
2,570
Other earning assets
7,203
6,421
8,904
19,691
19,211
Total interest income
74,990
70,961
63,015
214,116
173,170
Interest expense Deposits
47,415
44,495
40,339
134,039
102,285
Other borrowed funds
5,810
5,139
5,298
16,251
15,788
Total interest expense
53,225
49,634
45,637
150,290
118,073
Net interest income
21,765
21,327
17,378
63,826
55,097
Provision for credit losses
3,390
4,031
1,946
9,869
13,059
Net interest income after provision for credit losses
18,375
17,296
15,432
53,957
42,038
Noninterest income Service charges and fees
245
246
208
711
635
Loan servicing revenue
1,570
1,470
1,064
4,363
2,699
Loan servicing asset revaluation
(846
)
(829
)
(257
)
(2,109
)
(670
)
Mortgage banking activities
-
-
-
-
76
Gain on sale of loans
9,933
8,292
5,569
24,761
14,498
Other
1,127
1,854
823
3,683
1,486
Total noninterest income
12,029
11,033
7,407
31,409
18,724
Noninterest expense Salaries and employee benefits
13,456
12,462
11,767
37,714
34,267
Marketing, advertising and promotion
548
609
500
1,893
2,049
Consulting and professional fees
902
1,022
552
2,777
2,189
Data processing
675
606
701
1,845
1,880
Loan expenses
1,524
1,597
1,336
4,566
4,385
Premises and equipment
2,918
3,154
2,315
8,898
7,753
Deposit insurance premium
1,219
1,172
1,067
3,536
2,546
Other
1,552
1,714
1,518
4,924
4,311
Total noninterest expense
22,794
22,336
19,756
66,153
59,380
Income before income taxes
7,610
5,993
3,083
19,213
1,382
Income tax provision (benefit)
620
218
(326
)
1,267
(2,892
)
Net income
$
6,990
$
5,775
$
3,409
$
17,946
$
4,274
Per common share data Earnings per share - basic
$
0.80
$
0.67
$
0.39
$
2.07
$
0.48
Earnings per share - diluted
$
0.80
$
0.67
$
0.39
$
2.05
$
0.48
Dividends declared per share
$
0.06
$
0.06
$
0.06
$
0.18
$
0.18
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
September 30, 2024
June 30, 2024
September 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
$
4,029,360
$
59,792
5.90
%
$
3,936,723
$
57,094
5.83
%
$
3,701,072
$
48,898
5.24
%
Securities - taxable
713,992
6,953
3.87
%
670,502
6,476
3.88
%
550,208
4,301
3.10
%
Securities - non-taxable
78,417
1,042
5.29
%
74,035
970
5.27
%
72,012
912
5.02
%
Other earning assets
526,384
7,203
5.44
%
469,045
6,421
5.51
%
653,375
8,904
5.41
%
Total interest-earning assets
5,348,153
74,990
5.58
%
5,150,305
70,961
5.54
%
4,976,667
63,015
5.02
%
Allowance for credit losses - loans
(44,572
)
(41,362
)
(35,601
)
Noninterest-earning assets
220,329
223,833
196,408
Total assets
$
5,523,910
$
5,332,776
$
5,137,474
Liabilities Interest-bearing liabilities
Interest-bearing demand deposits
$
511,446
$
2,880
2.24
%
$
474,124
$
2,567
2.18
%
$
387,517
$
2,131
2.18
%
Savings accounts
22,774
48
0.84
%
22,987
48
0.84
%
26,221
56
0.85
%
Money market accounts
1,224,680
12,980
4.22
%
1,243,011
13,075
4.23
%
1,230,746
12,537
4.04
%
Fintech - brokered deposits
153,012
1,682
4.37
%
119,662
1,299
4.37
%
31,891
348
4.33
%
Certificates and brokered deposits
2,472,166
29,825
4.80
%
2,313,192
27,506
4.78
%
2,235,321
25,267
4.48
%
Total interest-bearing deposits
4,384,078
47,415
4.30
%
4,172,976
44,495
4.29
%
3,911,696
40,339
4.09
%
Other borrowed funds
620,032
5,810
3.73
%
652,176
5,139
3.17
%
719,655
5,298
2.92
%
Total interest-bearing liabilities
5,004,110
53,225
4.23
%
4,825,152
49,634
4.14
%
4,631,351
45,637
3.91
%
Noninterest-bearing deposits
113,009
116,939
127,540
Other noninterest-bearing liabilities
26,730
20,860
21,882
Total liabilities
5,143,849
4,962,951
4,780,773
Shareholders' equity
380,061
369,825
356,701
Total liabilities and shareholders' equity
$
5,523,910
$
5,332,776
$
5,137,474
Net interest income
$
21,765
$
21,327
$
17,378
Interest rate spread
1.35
%
1.40
%
1.11
%
Net interest margin
1.62
%
1.67
%
1.39
%
Net interest margin - FTE 2,3
1.70
%
1.76
%
1.49
%
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
Nine Months Ended
September 30, 2024
September 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
$
3,953,170
$
172,321
5.82
%
$
3,647,243
$
139,647
5.12
%
Securities - taxable
670,728
19,123
3.81
%
531,197
11,742
2.96
%
Securities - non-taxable
76,257
2,981
5.22
%
72,829
2,570
4.72
%
Other earning assets
476,697
19,691
5.52
%
499,835
19,211
5.14
%
Total interest-earning assets
5,176,852
214,116
5.52
%
4,751,104
173,170
4.87
%
-
Allowance for credit losses - loans
(41,526
)
(35,784
)
Noninterest-earning assets
220,165
190,590
Total assets
$
5,355,491
$
4,905,910
Liabilities Interest-bearing liabilities
Interest-bearing demand deposits
$
467,054
$
7,538
2.16
%
$
360,573
$
4,540
1.68
%
Savings accounts
22,760
144
0.85
%
31,494
202
0.86
%
Money market accounts
1,228,538
38,727
4.21
%
1,293,728
37,151
3.84
%
Fintech - brokered deposits
119,470
3,912
4.37
%
23,246
716
4.12
%
Certificates and brokered deposits
2,344,272
83,718
4.77
%
1,971,705
59,676
4.05
%
Total interest-bearing deposits
4,182,094
134,039
4.28
%
3,680,746
102,285
3.72
%
Other borrowed funds
662,824
16,251
3.28
%
719,577
15,788
2.93
%
Total interest-bearing liabilities
4,844,918
150,290
4.14
%
4,400,323
118,073
3.59
%
Noninterest-bearing deposits
114,425
126,647
Other noninterest-bearing liabilities
23,037
19,535
Total liabilities
4,982,380
4,546,505
Shareholders' equity
373,111
359,405
Total liabilities and shareholders' equity
$
5,355,491
$
4,905,910
Net interest income
$
63,826
$
55,097
Interest rate spread
1.38
%
1.28
%
Net interest margin
1.65
%
1.55
%
Net interest margin - FTE 2,3
1.74
%
1.66
%
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
September 30, 2024 June 30, 2024
September 30, 2023 Amount Percent
Amount Percent Amount Percent
Commercial loans Commercial and industrial
$
111,199
2.8
%
$
115,585
2.9
%
$
114,265
3.1
%
Owner-occupied commercial real estate
56,461
1.4
%
58,089
1.5
%
58,486
1.6
%
Investor commercial real estate
260,614
6.5
%
188,409
4.8
%
129,831
3.5
%
Construction
340,954
8.4
%
328,922
8.3
%
252,105
6.7
%
Single tenant lease financing
932,148
23.1
%
927,462
23.4
%
933,873
25.0
%
Public finance
462,730
11.5
%
486,200
12.3
%
535,960
14.3
%
Healthcare finance
190,287
4.7
%
202,079
5.1
%
235,622
6.3
%
Small business lending
298,645
7.4
%
270,129
6.8
%
192,996
5.2
%
Franchise finance
550,442
13.6
%
551,133
13.9
%
455,094
12.2
%
Total commercial loans
3,203,480
79.4
%
3,128,008
79.0
%
2,908,232
77.9
%
Consumer loans Residential mortgage
378,701
9.4
%
382,549
9.7
%
393,501
10.5
%
Home equity
20,264
0.5
%
21,405
0.5
%
23,544
0.6
%
Trailers
205,230
5.1
%
197,738
5.0
%
186,424
5.0
%
Recreational vehicles
150,378
3.7
%
150,151
3.8
%
140,205
3.8
%
Other consumer loans
48,780
1.2
%
48,638
1.2
%
42,822
1.1
%
Total consumer loans
803,353
19.9
%
800,481
20.2
%
786,496
21.0
%
Net deferred loan fees, premiums, discounts and other 1
29,047
0.7
%
32,657
0.8
%
40,340
1.1
%
Total loans
$
4,035,880
100.0
%
$
3,961,146
100.0
%
$
3,735,068
100.0
%
September 30, 2024 June 30, 2024
September 30, 2023 Amount Percent
Amount Percent Amount Percent
Deposits Noninterest-bearing deposits
$
111,591
2.3
%
$
126,438
3.0
%
$
125,265
3.1
%
Interest-bearing demand deposits
538,484
11.2
%
480,141
11.2
%
374,915
9.2
%
Savings accounts
21,712
0.5
%
22,619
0.5
%
23,811
0.6
%
Money market accounts
1,230,707
25.7
%
1,222,197
28.6
%
1,222,511
29.9
%
Fintech - brokered deposits
211,814
4.4
%
140,180
3.3
%
41,884
1.0
%
Certificates of deposits
2,110,618
44.0
%
1,829,644
42.8
%
1,624,447
39.8
%
Brokered deposits
572,784
11.9
%
452,703
10.6
%
670,712
16.4
%
Total deposits
$
4,797,710
100.0
%
$
4,273,922
100.0
%
$
4,083,545
100.0
%
1 Includes carrying value adjustments of $24.1 million,
$25.6 million and $29.0 million related to terminated interest rate
swaps associated with public finance loans as of September 30,
2024, June 30, 2024 and September 30, 2023, respectively.
First
Internet Bancorp Reconciliation of Non-GAAP Financial
Measures Dollar amounts in thousands, except per share data
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Total equity - GAAP
$
385,129
$
371,953
$
347,744
$
385,129
$
347,744
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible common equity
$
380,442
$
367,266
$
343,057
$
380,442
$
343,057
Total assets - GAAP
$
5,823,259
$
5,343,302
$
5,169,023
$
5,823,259
$
5,169,023
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible assets
$
5,818,572
$
5,338,615
$
5,164,336
$
5,818,572
$
5,164,336
Common shares outstanding
8,667,894
8,667,894
8,669,673
8,667,894
8,669,673
Book value per common share
$
44.43
$
42.91
$
40.11
$
44.43
$
40.11
Effect of goodwill
(0.54
)
(0.54
)
(0.54
)
(0.54
)
(0.54
)
Tangible book value per common share
$
43.89
$
42.37
$
39.57
$
43.89
$
39.57
Total shareholders' equity to assets
6.61
%
6.96
%
6.73
%
6.61
%
6.73
%
Effect of goodwill
(0.07
%)
(0.08
%)
(0.09
%)
(0.07
%)
(0.09
%)
Tangible common equity to tangible assets
6.54
%
6.88
%
6.64
%
6.54
%
6.64
%
Total average equity - GAAP
$
380,061
$
369,825
$
356,701
$
373,111
$
359,405
Adjustments: Average goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Average tangible common equity
$
375,374
$
365,138
$
352,014
$
368,424
$
354,718
Return on average shareholders' equity
7.32
%
6.28
%
3.79
%
6.42
%
1.59
%
Effect of goodwill
0.09
%
0.08
%
0.05
%
0.09
%
0.02
%
Return on average tangible common equity
7.41
%
6.36
%
3.84
%
6.51
%
1.61
%
Total interest income
$
74,990
$
70,961
$
63,015
$
214,116
$
173,170
Adjustments: Fully-taxable equivalent adjustments 1
1,133
1,175
1,265
3,498
3,995
Total interest income - FTE
$
76,123
$
72,136
$
64,280
$
217,614
$
177,165
Net interest income
$
21,765
$
21,327
$
17,378
$
63,826
$
55,097
Adjustments: Fully-taxable equivalent adjustments 1
1,133
1,175
1,265
3,498
3,995
Net interest income - FTE
$
22,898
$
22,502
$
18,643
$
67,324
$
59,092
Net interest margin
1.62
%
1.67
%
1.39
%
1.65
%
1.55
%
Effect of fully-taxable equivalent adjustments 1
0.08
%
0.09
%
0.10
%
0.09
%
0.11
%
Net interest margin - FTE
1.70
%
1.76
%
1.49
%
1.74
%
1.66
%
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
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Total revenue - GAAP
$
33,794
$
32,360
$
24,785
$
95,235
$
73,821
Adjustments: Mortgage-related revenue
-
-
-
-
(65
)
Adjusted total revenue
$
33,794
$
32,360
$
24,785
$
95,235
$
73,756
Noninterest income - GAAP
$
12,029
$
11,033
$
7,407
$
31,409
$
18,724
Adjustments: Mortgage-related revenue
-
-
-
-
(65
)
Adjusted noninterest income
$
12,029
$
11,033
$
7,407
$
31,409
$
18,659
Noninterest expense - GAAP
$
22,794
$
22,336
$
19,756
$
66,153
$
59,380
Adjustments: Mortgage-related costs
-
-
-
-
(3,052
)
IT termination fees
-
(452
)
-
(452
)
-
Anniversary expenses
-
(120
)
-
(120
)
-
Adjusted noninterest expense
$
22,794
$
21,764
$
19,756
$
65,581
$
56,328
Income before income taxes - GAAP
$
7,610
$
5,993
$
3,083
$
19,213
$
1,382
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
$
7,610
$
6,565
$
3,083
$
19,785
$
11,283
Income tax provision (benefit) - GAAP
$
620
$
218
$
(326
)
$
1,267
$
(2,892
)
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)
$
620
$
338
$
(326
)
$
1,387
$
(813
)
Net income - GAAP
$
6,990
$
5,775
$
3,409
$
17,946
$
4,274
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
$
6,990
$
6,227
$
3,409
$
18,398
$
12,096
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
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Diluted average common shares outstanding
8,768,731
8,656,215
8,767,217
8,756,544
8,907,748
Diluted earnings per share - GAAP
$
0.80
$
0.67
$
0.39
$
2.05
$
0.48
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
$
0.80
$
0.72
$
0.39
$
2.10
$
1.35
Return on average assets
0.50
%
0.44
%
0.26
%
0.45
%
0.12
%
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
%
0.07
%
Effect of partial charge-off of C&I participation loan
0.00
%
0.00
%
0.00
%
0.00
%
0.15
%
Effect of IT termination fees
0.00
%
0.03
%
0.00
%
0.01
%
0.00
%
Effect of anniversary expenses
0.00
%
0.01
%
0.00
%
0.00
%
0.00
%
Adjusted return on average assets
0.50
%
0.48
%
0.26
%
0.46
%
0.34
%
Return on average shareholders' equity
7.32
%
6.28
%
3.79
%
6.42
%
1.59
%
Effect of mortgage-related revenue
0.00
%
0.00
%
0.00
%
0.00
%
(0.02
%)
Effect of mortgage-related costs
0.00
%
0.00
%
0.00
%
0.00
%
0.90
%
Effect of partial charge-off of C&I participation loan
0.00
%
0.00
%
0.00
%
0.00
%
2.03
%
Effect of IT termination fees
0.00
%
0.39
%
0.00
%
0.13
%
0.00
%
Effect of anniversary expenses
0.00
%
0.10
%
0.00
%
0.03
%
0.00
%
Adjusted return on average shareholders' equity
7.32
%
6.77
%
3.79
%
6.58
%
4.50
%
Return on average tangible common equity
7.41
%
6.36
%
3.84
%
6.51
%
1.61
%
Effect of mortgage-related revenue
0.00
%
0.00
%
0.00
%
0.00
%
(0.02
%)
Effect of mortgage-related costs
0.00
%
0.00
%
0.00
%
0.00
%
0.91
%
Effect of partial charge-off of C&I participation loan
0.00
%
0.00
%
0.00
%
0.00
%
2.06
%
Effect of IT termination fees
0.00
%
0.39
%
0.00
%
0.13
%
0.00
%
Effect of anniversary expenses
0.00
%
0.10
%
0.00
%
0.03
%
0.00
%
Adjusted return on average tangible common equity
7.41
%
6.85
%
3.84
%
6.67
%
4.56
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241022889835/en/
Investors/Analysts Paula Deemer
Director of Corporate Administration (317) 428-4628
investors@firstib.com
Media PANBlast Zach Weismiller
firstib@panblastpr.com
First Internet Bancorp (NASDAQ:INBK)
Historical Stock Chart
From Nov 2024 to Dec 2024
First Internet Bancorp (NASDAQ:INBK)
Historical Stock Chart
From Dec 2023 to Dec 2024
