First Internet Bancorp Reports Second Quarter 2021 Results

Highlights for the second quarter include:

  • Record net income of $13.1 million, an increase of 233.1% over the second quarter of 2020
  • Record diluted earnings per share of $1.31, an increase of 227.5% over the second quarter of 2020  
  • Adjusted net income of $11.1 million, or $1.11 per diluted share, when excluding a $2.5 million pre-tax gain on the sale of the Company’s corporate headquarters
  • Total revenue of $30.6 million, an increase of 57.6% over the second quarter of 2020
  • Adjusted revenue of $28.0 million, an increase of 44.6% over the second quarter of 2020
  • Net interest margin and fully-taxable equivalent net interest margin each increased 7 basis points (“bps”) from the first quarter of 2021, driven by a 13 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 second quarter of 2021. Net income for the second quarter of 2021 was $13.1 million, or $1.31 diluted earnings per share. This compares to net income of $10.5 million, or $1.05 diluted earnings per share, for the first quarter of 2021, and net income of $3.9 million, or $0.40 diluted earnings per share, for the second quarter of 2020.

“We produced strong operating results for the second quarter of 2021 driven by net interest margin expansion and disciplined expense management,” said David Becker, Chairman and Chief Executive Officer. “We also maintained excellent credit quality, as nonperforming loans declined during the quarter and delinquencies were at historically low levels. Additionally, our growing national SBA platform steadily gained momentum and drove higher gain-on-sale revenue. Looking forward, pipelines in SBA, as well as in other key lines of business, grew significantly during the quarter, leaving us well-positioned to capitalize on loan growth opportunities in the second half of 2021.

Mr. Becker concluded, “We continue to challenge ourselves to imagine more. First Internet Bank has fostered a workplace culture that promotes innovation, collaboration and customer focus. This is reflected in our being named one of the 'Top Workplaces in Central Indiana' for the eighth consecutive year. I would like to thank the entire First Internet Bank team for helping to deliver record earnings performance for the quarter.”

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2021 was $21.6 million, compared to $20.5 million for the first quarter of 2021 and $14.4 million for the second quarter of 2020. On a fully-taxable equivalent basis, net interest income for the second quarter of 2021 was $23.0 million, compared to $21.9 million for the first quarter of 2021 and $15.9 million for the second quarter of 2020.

Total interest income for the second quarter of 2021 was $33.4 million, an increase of 0.3% compared to the first quarter of 2021 and a decrease of 2.5% compared to the second quarter of 2020. On a fully-taxable equivalent basis, total interest income for the second quarter of 2021 was $34.8 million, an increase of 0.4% compared to the first quarter of 2021 and a decrease of 2.5% compared to the second quarter of 2020. The modest increase in total interest income compared to the first quarter of 2021 was driven primarily by a 0.7% increase in the average balance of interest-earning assets, which was partially offset by a 5 bp decrease in the yield on these assets. The yield on interest-earning assets for the second quarter of 2021 decreased to 3.26% from 3.31% in the prior quarter due primarily to changes in the earning asset mix. Average loan balances, including loans held for sale, decreased $62.8 million, or 2.0%, while the average balances of other earning assets and securities increased $63.7 million, or 14.3%, and $26.3 million, or 4.8%, respectively.

Total interest expense for the second quarter of 2021 was $11.8 million, a decrease of 7.7% compared to the first quarter of 2021 and a decrease of 40.5% compared to the second quarter of 2020. The decrease in total interest expense compared to the linked quarter was due primarily to a 13 bp decline in the cost of interest-bearing deposits as well as a slight decline of 0.2% in the average balance of these 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 a reduction in the average balance of certificates and brokered deposits.

During the second quarter of 2021, the cost of money market deposits remained stable compared to the linked quarter while the average balance of these deposits increased $46.8 million, or 3.4%. Furthermore, the cost of certificates and brokered deposits decreased by 21 bps and average balances decreased by $75.4 million, or 5.0%. During the second quarter of 2021, new certificates of deposit were originated at a weighted average cost of 44 bps while maturing certificates of deposit had a weighted average cost of 174 bps, a difference of 130 bps.

Net interest margin (“NIM”) improved to 2.11% for the second quarter of 2021, up from 2.04% for the first quarter of 2021 and 1.37% for the second quarter of 2020. Fully-taxable equivalent NIM (“FTE NIM”) increased to 2.25% for the second quarter of 2021, up from 2.18% for the first quarter of 2021 and 1.50% for the second quarter of 2020. The increases in NIM and FTE NIM compared to the linked quarter were driven primarily by lower interest-bearing deposit costs, partially offset by the change in the earning asset mix.

Noninterest Income

Noninterest income for the second quarter of 2021 was $9.0 million, compared to $8.4 million for the first quarter of 2021 and $5.0 million for the second quarter of 2020. The increase compared to the linked quarter was driven primarily by a gain on sale of premises and equipment and gain on sale of loans, partially offset by lower revenues from mortgage banking activities. During the second quarter of 2021, the Company completed the sale of its headquarters, resulting in a $2.5 million gain. Gain on sale of loans totaled $3.0 million for the quarter, increasing $1.3 million compared to the first quarter of 2021, due to an increase in the volume of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loan sales and an increase in secondary market premiums during the quarter. Mortgage banking revenue totaled $2.7 million for the second quarter of 2021, down $3.1 million from the linked quarter, due primarily to decreases in interest rate locks, sold loan volume and margins.

Noninterest Expense

Noninterest expense for the second quarter of 2021 was $15.1 million, compared to $15.3 million for the first quarter of 2021 and $13.2 million for the second quarter of 2020. Noninterest expense decreased slightly on a linked-quarter basis, driven primarily by decreases of $0.3 million in salaries and employee benefits and $0.2 million in deposit insurance premium, which was partially offset by a $0.2 million increase in marketing, advertising and promotion expense. The decrease in salaries and employee benefits expense was due mainly to a decrease in medical claims expense in the second quarter of 2021. The decrease in deposit insurance premium was due to the decline in total assets year-over-year. The increase in marketing expenses was due to higher mortgage lead generation costs and sponsorship initiatives.

Income Taxes

The Company reported income tax expense of $2.4 million for the second quarter of 2021 and an effective tax rate of 15.4%, compared to income tax expense of $1.9 million and an effective tax rate of 15.1% for the first quarter of 2021 and an income tax benefit of $0.3 million for the second quarter of 2020.

Loans and Credit Quality

Total loans as of June 30, 2021 were $3.0 billion, a decrease of $101.1 million, or 3.3%, compared to March 31, 2021, and a decrease of $16.1 million, or 0.5%, compared to June 30, 2020. Total commercial loan balances were $2.4 billion as of June 30, 2021, a decrease of $85.1 million, or 3.4%, compared to March 31, 2021, and an increase of $48.3 million, or 2.0%, compared to June 30, 2020. Compared to the linked quarter, the decline in commercial loan balances was driven largely by net payoffs in healthcare finance, single tenant lease financing and public finance loans, which was partially offset by increases in commercial and industrial and investor commercial real estate loan balances.

Total consumer loan balances were $466.5 million as of June 30, 2021, a decrease of $11.9 million, or 2.5%, compared to March 31, 2021, and a decrease of $56.5 million, or 10.8%, compared to June 30, 2020. The decline in consumer loan balances from March 31, 2021 was due primarily to prepayment activity in the residential mortgage portfolio, partially offset by an increase in trailer balances.

Total delinquencies 30 days or more past due were 0.07% of total loans as of June 30, 2021, down from 0.23% as of March 31, 2021, and down from 0.25% as of June 30, 2020. Overall credit quality remained strong as nonperforming loans to total loans was 0.31% as of June 30, 2021, compared to 0.48% as of March 31, 2021, and 0.28% as of June 30, 2020. During the second quarter of 2021, nonperforming loans declined $5.4 million, or 36.8%, compared to the linked quarter due primarily to positive developments related to a single tenant lease financing relationship and a commercial and industrial relationship, both of which had been classified as nonaccrual. The single tenant lease financing relationship included two loans, one of which was paid off at net book value (unpaid principal balance less specific reserves) and the other was transferred to other real estate owned. The commercial and industrial relationship included four loans, two of which paid off during the quarter.

The allowance for loan losses as a percentage of total loans was 0.95% as of June 30, 2021, or 0.96% when excluding SBA Paycheck Protection Program (“PPP”) loans, compared to 1.00% and 1.02%, respectively, as of March 31, 2021, and 0.82% and 0.84%, respectively, as of June 30, 2020. The decline in the allowance for loan losses compared to the linked quarter was due primarily to the elimination of $2.9 million of specific reserves related to the loan relationships discussed above as well as the decrease in total loan balances, which included commercial loan portfolios with higher allowance coverage ratios. These items were partially offset by additional adjustments to the qualitative factors in the Company’s allowance model, resulting in a 6 bp increase to the allowance coverage ratio related to the general reserve on the Company’s commercial loan portfolio, which totaled 0.99% at quarter end.

Net charge-offs of $2.6 million were recognized during the second quarter of 2021, resulting in net charge-offs to average loans of 0.35%, compared to 0.02% for the first quarter of 2021 and 0.12% for the second quarter of 2020. The increase in net charge-offs is primarily due to the single tenant lease financing relationship discussed above as the loan payoff and the transfer to other real estate owned were recorded at net book value. The provision for loan losses in the second quarter of 2021 was $21,000, compared to $1.3 million for the first quarter of 2021 and $2.5 million for the second quarter of 2020. The decrease in provision for loan losses for the second quarter of 2021 was due primarily to the $101.1 million decrease in loan balances mentioned above.

Capital

As of June 30, 2021, total shareholders’ equity was $358.6 million, an increase of $14.1 million, or 4.1%, compared to March 31, 2021, and an increase of $50.9 million, or 16.6%, compared to June 30, 2020. The increase compared to the linked quarter was due primarily to net income earned during the quarter and a decrease in accumulated other comprehensive loss. Book value per common share increased to $36.39 as of June 30, 2021, up from $35.07 as of March 31, 2021, and $31.40 as of June 30, 2020. Tangible book value per share increased to $35.92, up from $34.60 and $30.92, 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 June 30, 2021.

As of June 30, 2021

Company

Bank

 

Total shareholders' equity to assets

8.53%

9.45%

Tangible common equity to tangible assets 1

8.43%

9.35%

Tier 1 leverage ratio 2

8.70%

9.61%

Common equity tier 1 capital ratio 2

12.23%

13.54%

Tier 1 capital ratio 2

12.23%

13.54%

Total risk-based capital ratio 2

15.51%

14.48%

 

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, July 22, 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 August 22, 2021, by dialing (877) 344-7529; passcode: 10158195.

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 $4.2 billion as of June 30, 2021. 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,” “designed,” “estimate,” “expect,” “intend,” “may,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “will,” “would” or other similar expressions. Such statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and are subject to certain risks and uncertainties including: the effects of the COVID-19 global pandemic and other adverse public health developments on the economy, 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 we own or that is the collateral for our loans; 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 revenue, 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 press 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,

2021

 

2021

 

2020

 

2021

 

2020

 
Net income

$

13,096

 

$

10,450

 

$

3,932

 

$

23,546

 

$

9,951

 

 
Per share and share information
Earnings per share - basic

$

1.32

 

$

1.06

 

$

0.40

 

$

2.37

 

$

1.02

 

Earnings per share - diluted

 

1.31

 

 

1.05

 

 

0.40

 

 

2.36

 

 

1.02

 

Dividends declared per share

 

0.06

 

 

0.06

 

 

0.06

 

 

0.12

 

 

0.12

 

Book value per common share

 

36.39

 

 

35.07

 

 

31.40

 

 

36.39

 

 

31.40

 

Tangible book value per common share 1

 

35.92

 

 

34.60

 

 

30.92

 

 

35.92

 

 

30.92

 

Common shares outstanding

 

9,854,153

 

 

9,823,831

 

 

9,799,047

 

 

9,854,153

 

 

9,799,047

 

Average common shares outstanding:
Basic

 

9,932,761

 

 

9,899,230

 

 

9,768,227

 

 

9,916,087

 

 

9,798,528

 

Diluted

 

9,981,422

 

 

9,963,036

 

 

9,768,227

 

 

9,970,147

 

 

9,802,427

 

Performance ratios
Return on average assets

 

1.25

%

 

1.02

%

 

0.37

%

 

1.13

%

 

0.47

%

Return on average shareholders' equity

 

14.88

%

 

12.61

%

 

5.15

%

 

13.78

%

 

6.48

%

Return on average tangible common equity 1

 

15.09

%

 

12.79

%

 

5.23

%

 

13.97

%

 

6.58

%

Net interest margin

 

2.11

%

 

2.04

%

 

1.37

%

 

2.08

%

 

1.43

%

Net interest margin - FTE 1,2

 

2.25

%

 

2.18

%

 

1.50

%

 

2.21

%

 

1.58

%

Capital ratios 3
Total shareholders' equity to assets

 

8.53

%

 

8.23

%

 

7.12

%

 

8.53

%

 

7.12

%

Tangible common equity to tangible assets 1

 

8.43

%

 

8.12

%

 

7.01

%

 

8.43

%

 

7.01

%

Tier 1 leverage ratio

 

8.70

%

 

8.46

%

 

7.49

%

 

8.70

%

 

7.49

%

Common equity tier 1 capital ratio

 

12.23

%

 

11.81

%

 

10.94

%

 

12.23

%

 

10.94

%

Tier 1 capital ratio

 

12.23

%

 

11.81

%

 

10.94

%

 

12.23

%

 

10.94

%

Total risk-based capital ratio

 

15.51

%

 

15.18

%

 

14.13

%

 

15.51

%

 

14.13

%

Asset quality
Nonperforming loans

$

9,264

 

$

14,649

 

$

8,195

 

$

9,264

 

$

8,195

 

Nonperforming assets

 

10,564

 

 

14,678

 

 

10,304

 

 

10,564

 

 

10,304

 

Nonperforming loans to loans

 

0.31

%

 

0.48

%

 

0.28

%

 

0.31

%

 

0.28

%

Nonperforming assets to total assets

 

0.25

%

 

0.35

%

 

0.24

%

 

0.25

%

 

0.24

%

Allowance for loan losses to:
Loans

 

0.95

%

 

1.00

%

 

0.82

%

 

0.95

%

 

0.82

%

Loans, excluding PPP loans 1

 

0.96

%

 

1.02

%

 

0.84

%

 

0.96

%

 

0.84

%

Nonperforming loans

 

303.0

%

 

209.2

%

 

298.5

%

 

303.0

%

 

298.5

%

Net charge-offs to average loans

 

0.35

%

 

0.02

%

 

0.12

%

 

0.18

%

 

0.09

%

Average balance sheet information
Loans

$

2,994,356

 

$

3,047,915

 

$

2,943,165

 

$

3,020,987

 

$

2,937,136

 

Total securities

 

574,684

 

 

548,429

 

 

657,622

 

 

561,630

 

 

644,251

 

Other earning assets

 

509,735

 

 

446,045

 

 

594,296

 

 

478,065

 

 

505,111

 

Total interest-earning assets

 

4,100,749

 

 

4,073,604

 

 

4,241,690

 

 

4,087,255

 

 

4,133,245

 

Total assets

 

4,206,966

 

 

4,173,273

 

 

4,330,174

 

 

4,190,212

 

 

4,215,053

 

Noninterest-bearing deposits

 

98,207

 

 

90,764

 

 

73,758

 

 

94,506

 

 

67,107

 

Interest-bearing deposits

 

3,109,165

 

 

3,115,987

 

 

3,270,720

 

 

3,112,557

 

 

3,179,882

 

Total deposits

 

3,207,372

 

 

3,206,751

 

 

3,344,478

 

 

3,207,063

 

 

3,246,989

 

Shareholders' equity

 

352,894

 

 

335,968

 

 

306,868

 

 

344,478

 

 

308,937

 

 
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,

2021

 

2021

 

2020

 
Assets
Cash and due from banks

$

4,347

 

$

4,440

 

$

7,016

 

Interest-bearing deposits

 

324,450

 

 

411,765

 

 

491,603

 

Securities available-for-sale, at fair value

 

663,519

 

 

462,376

 

 

589,017

 

Securities held-to-maturity, at amortized cost

 

65,659

 

 

68,190

 

 

68,295

 

Loans held-for-sale

 

27,587

 

 

30,235

 

 

38,813

 

Loans

 

2,957,608

 

 

3,058,694

 

 

2,973,674

 

Allowance for loan losses

 

(28,066

)

 

(30,642

)

 

(24,465

)

Net loans

 

2,929,542

 

 

3,028,052

 

 

2,949,209

 

Accrued interest receivable

 

16,345

 

 

16,433

 

 

21,093

 

Federal Home Loan Bank of Indianapolis stock

 

25,650

 

 

25,650

 

 

25,650

 

Cash surrender value of bank-owned life insurance

 

38,421

 

 

38,185

 

 

37,474

 

Premises and equipment, net

 

44,249

 

 

42,381

 

 

23,939

 

Goodwill

 

4,687

 

 

4,687

 

 

4,687

 

Servicing asset

 

4,120

 

 

3,817

 

 

2,522

 

Other real estate owned

 

1,300

 

 

-

 

 

2,065

 

Accrued income and other assets

 

54,766

 

 

52,359

 

 

63,217

 

Total assets

$

4,204,642

 

$

4,188,570

 

$

4,324,600

 

 
Liabilities
Noninterest-bearing deposits

$

113,996

 

$

100,700

 

$

82,864

 

Interest-bearing deposits

 

3,092,151

 

 

3,116,903

 

 

3,297,925

 

Total deposits

 

3,206,147

 

 

3,217,603

 

 

3,380,789

 

Advances from Federal Home Loan Bank

 

514,919

 

 

514,917

 

 

514,913

 

Subordinated debt

 

69,871

 

 

69,794

 

 

69,681

 

Accrued interest payable

 

1,132

 

 

1,418

 

 

1,073

 

Accrued expenses and other liabilities

 

53,932

 

 

40,272

 

 

50,433

 

Total liabilities

 

3,846,001

 

 

3,844,004

 

 

4,016,889

 

Shareholders' equity
Voting common stock

 

222,486

 

 

221,911

 

 

220,418

 

Retained earnings

 

149,066

 

 

136,575

 

 

108,431

 

Accumulated other comprehensive loss

 

(12,911

)

 

(13,920

)

 

(21,138

)

Total shareholders' equity

 

358,641

 

 

344,566

 

 

307,711

 

Total liabilities and shareholders' equity

$

4,204,642

 

$

4,188,570

 

$

4,324,600

 

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,

2021

 

2021

 

2020

 

2021

 

2020

 
Interest income
Loans

$

30,835

 

$

30,885

 

$

29,730

 

$

61,720

 

$

60,138

 

Securities - taxable

 

1,921

 

 

1,779

 

 

3,276

 

 

3,700

 

 

6,895

 

Securities - non-taxable

 

259

 

 

281

 

 

457

 

 

540

 

 

1,029

 

Other earning assets

 

362

 

 

335

 

 

759

 

 

697

 

 

2,404

 

Total interest income

 

33,377

 

 

33,280

 

 

34,222

 

 

66,657

 

 

70,466

 

Interest expense
Deposits

 

7,705

 

 

8,628

 

 

15,763

 

 

16,333

 

 

32,971

 

Other borrowed funds

 

4,065

 

 

4,127

 

 

4,033

 

 

8,192

 

 

8,051

 

Total interest expense

 

11,770

 

 

12,755

 

 

19,796

 

 

24,525

 

 

41,022

 

Net interest income

 

21,607

 

 

20,525

 

 

14,426

 

 

42,132

 

 

29,444

 

Provision for loan losses

 

21

 

 

1,276

 

 

2,491

 

 

1,297

 

 

3,952

 

Net interest income after provision for loan losses

 

21,586

 

 

19,249

 

 

11,935

 

 

40,835

 

 

25,492

 

Noninterest income
Service charges and fees

 

280

 

 

266

 

 

182

 

 

546

 

 

394

 

Loan servicing revenue

 

457

 

 

422

 

 

255

 

 

879

 

 

506

 

Loan servicing asset revaluation

 

(240

)

 

(155

)

 

(90

)

 

(395

)

 

(269

)

Mortgage banking activities

 

2,674

 

 

5,750

 

 

3,408

 

 

8,424

 

 

7,076

 

Gain on sale of loans

 

3,019

 

 

1,723

 

 

762

 

 

4,742

 

 

2,563

 

Gain on sale of securities

 

-

 

 

-

 

 

-

 

 

-

 

 

41

 

Gain on sale of premises and equipment

 

2,523

 

 

-

 

 

-

 

 

2,523

 

 

-

 

Other

 

249

 

 

369

 

 

456

 

 

618

 

 

873

 

Total noninterest income

 

8,962

 

 

8,375

 

 

4,973

 

 

17,337

 

 

11,184

 

Noninterest expense
Salaries and employee benefits

 

9,232

 

 

9,492

 

 

7,789

 

 

18,724

 

 

15,563

 

Marketing, advertising and promotion

 

872

 

 

680

 

 

411

 

 

1,552

 

 

786

 

Consulting and professional fees

 

1,078

 

 

986

 

 

932

 

 

2,064

 

 

2,109

 

Data processing

 

382

 

 

462

 

 

339

 

 

844

 

 

714

 

Loan expenses

 

541

 

 

534

 

 

399

 

 

1,075

 

 

998

 

Premises and equipment

 

1,587

 

 

1,601

 

 

1,602

 

 

3,188

 

 

3,227

 

Deposit insurance premium

 

275

 

 

425

 

 

435

 

 

700

 

 

920

 

Other

 

1,108

 

 

1,137

 

 

1,337

 

 

2,245

 

 

2,413

 

Total noninterest expense

 

15,075

 

 

15,317

 

 

13,244

 

 

30,392

 

 

26,730

 

Income before income taxes

 

15,473

 

 

12,307

 

 

3,664

 

 

27,780

 

 

9,946

 

Income tax provision (benefit)

 

2,377

 

 

1,857

 

 

(268

)

 

4,234

 

 

(5

)

Net income

$

13,096

 

$

10,450

 

$

3,932

 

$

23,546

 

$

9,951

 

 
Per common share data
Earnings per share - basic

$

1.32

 

$

1.06

 

$

0.40

 

$

2.37

 

$

1.02

 

Earnings per share - diluted

$

1.31

 

$

1.05

 

$

0.40

 

$

2.36

 

$

1.02

 

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, 2021 March 31, 2021 June 30, 2020
 
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

$

3,016,330

 

$

30,835

4.10

%

$

3,079,130

 

$

30,885

4.07

%

$

2,989,772

 

$

29,730

4.00

%

Securities - taxable

 

490,634

 

 

1,921

1.57

%

 

461,300

 

 

1,779

1.56

%

 

560,947

 

3,276

2.35

%

Securities - non-taxable

 

84,050

 

 

259

1.24

%

 

87,129

 

 

281

1.31

%

 

96,675

 

457

1.90

%

Other earning assets

 

509,735

 

 

362

0.28

%

 

446,045

 

 

335

0.30

%

 

594,296

 

759

0.51

%

Total interest-earning assets

 

4,100,749

 

 

33,377

3.26

%

 

4,073,604

 

 

33,280

3.31

%

 

4,241,690

 

 

34,222

3.24

%

 
Allowance for loan losses

 

(30,348

)

 

(29,884

)

 

(23,388

)

Noninterest-earning assets

 

136,565

 

 

129,553

 

 

111,872

 

Total assets

$

4,206,966

 

$

4,173,273

 

$

4,330,174

 

 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits

$

192,777

 

$

143

0.30

%

$

180,746

 

$

133

0.30

%

$

137,487

 

$

237

0.69

%

Savings accounts

 

55,811

 

 

49

0.35

%

 

46,035

 

 

40

0.35

%

 

37,204

 

 

92

0.99

%

Money market accounts

 

1,416,406

 

 

1,462

0.41

%

 

1,369,626

 

 

1,391

0.41

%

 

1,089,063

 

 

3,541

1.31

%

Certificates and brokered deposits

 

1,444,171

 

 

6,051

1.68

%

 

1,519,580

 

 

7,064

1.89

%

 

2,006,966

 

 

11,893

2.38

%

Total interest-bearing deposits

 

3,109,165

 

 

7,705

0.99

%

 

3,115,987

 

 

8,628

1.12

%

 

3,270,720

 

 

15,763

1.94

%

Other borrowed funds

 

584,751

 

 

4,065

2.79

%

 

583,780

 

 

4,127

2.87

%

 

584,543

 

 

4,033

2.77

%

Total interest-bearing liabilities

 

3,693,916

 

 

11,770

1.28

%

 

3,699,767

 

 

12,755

1.40

%

 

3,855,263

 

 

19,796

2.07

%

 
Noninterest-bearing deposits

 

98,207

 

 

90,764

 

 

73,758

 

Other noninterest-bearing liabilities

 

61,949

 

 

46,774

 

 

94,285

 

Total liabilities

 

3,854,072

 

 

3,837,305

 

 

4,023,306

 

 
Shareholders' equity

 

352,894

 

 

335,968

 

 

306,868

 

Total liabilities and shareholders' equity

$

4,206,966

 

$

4,173,273

 

$

4,330,174

 

 
Net interest income

$

21,607

$

20,525

$

14,426

 
Interest rate spread

1.98

%

1.91

%

1.17

%

 
Net interest margin

2.11

%

2.04

%

1.37

%

 
Net interest margin - FTE 2,3

2.25

%

2.18

%

1.50

%

 
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, 2021

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

Average

 

Interest /

 

Yield /

 

Average

 

Interest /

 

Yield /

Balance

 

Dividends

 

Cost

 

Balance

 

Dividends

 

Cost

 
Assets
Interest-earning assets
Loans, including loans held-for-sale 1

$

3,047,560

 

$

61,720

4.08

%

$

2,983,883

 

$

60,138

4.05

%

Securities - taxable

 

476,049

 

 

3,700

1.57

%

 

545,997

 

 

6,895

2.54

%

Securities - non-taxable

 

85,581

 

 

540

1.27

%

 

98,254

 

 

1,029

2.11

%

Other earning assets

 

478,065

 

 

697

0.29

%

 

505,111

 

 

2,404

0.96

%

Total interest-earning assets

 

4,087,255

 

 

66,657

3.29

%

 

4,133,245

 

 

70,466

3.43

%

 
Allowance for loan losses

 

(30,117

)

 

(22,724

)

Noninterest-earning assets

 

133,074

 

 

104,532

 

Total assets

$

4,190,212

 

$

4,215,053

 

 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits

$

186,795

 

$

276

0.30

%

$

130,206

 

$

456

0.70

%

Savings accounts

 

50,950

 

 

89

0.35

%

 

33,774

 

 

170

1.01

%

Money market accounts

 

1,393,145

 

 

2,853

0.41

%

 

977,834

 

 

7,284

1.50

%

Certificates and brokered deposits

 

1,481,667

 

 

13,115

1.78

%

 

2,038,068

 

 

25,061

2.47

%

Total interest-bearing deposits

 

3,112,557

 

 

16,333

1.06

%

 

3,179,882

 

 

32,971

2.09

%

Other borrowed funds

 

584,268

 

 

8,192

2.83

%

 

584,504

 

 

8,051

2.77

%

Total interest-bearing liabilities

 

3,696,825

 

 

24,525

1.34

%

 

3,764,386

 

 

41,022

2.19

%

 
Noninterest-bearing deposits

 

94,506

 

 

67,107

 

Other noninterest-bearing liabilities

 

54,403

 

 

74,623

 

Total liabilities

 

3,845,734

 

 

3,906,116

 

 
Shareholders' equity

 

344,478

 

 

308,937

 

Total liabilities and shareholders' equity

$

4,190,212

 

$

4,215,053

 

 
Net interest income

$

42,132

$

29,444

 
Interest rate spread

1.95

%

1.24

%

 
Net interest margin

2.08

%

1.43

%

 
Net interest margin - FTE 2,3

2.21

%

1.58

%

 
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, 2021

 

March 31, 2021

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

Amount

 

Percent

 

Amount

 

Percent

 

Amount

 

Percent

 
Commercial loans
Commercial and industrial

$

96,203

3.3

%

$

71,835

2.3

%

$

81,687

2.7

%

Owner-occupied commercial real estate

 

87,136

2.9

%

 

87,930

2.9

%

 

86,897

2.9

%

Investor commercial real estate

 

28,871

1.0

%

 

14,832

0.5

%

 

13,286

0.4

%

Construction

 

117,970

4.0

%

 

123,483

4.0

%

 

77,591

2.6

%

Single tenant lease financing

 

913,115

30.9

%

 

941,322

30.8

%

 

980,292

33.0

%

Public finance

 

612,138

20.7

%

 

637,600

20.8

%

 

647,107

21.8

%

Healthcare finance

 

455,890

15.3

%

 

510,237

16.8

%

 

380,956

12.8

%

Small business lending

 

123,293

4.2

%

 

132,490

4.3

%

 

118,526

4.0

%

Total commercial loans

 

2,434,616

82.3

%

 

2,519,729

82.4

%

 

2,386,342

80.2

%

 
Consumer loans
Residential mortgage

 

177,148

6.0

%

 

190,148

6.2

%

 

208,728

7.0

%

Home equity

 

17,510

0.6

%

 

17,949

0.6

%

 

22,640

0.8

%

Trailers

 

148,795

5.0

%

 

143,454

4.7

%

 

147,326

5.0

%

Recreational vehicles

 

91,030

3.1

%

 

92,221

3.0

%

 

102,088

3.4

%

Other consumer loans

 

31,971

1.1

%

 

34,534

1.1

%

 

42,218

1.4

%

Total consumer loans

 

466,454

15.8

%

 

478,306

15.6

%

 

523,000

17.6

%

 
Net deferred loan fees, premiums, discounts and other 1

 

56,538

1.9

%

 

60,659

2.0

%

 

64,332

2.2

%

 
Total loans

$

2,957,608

100.0

%

$

3,058,694

100.0

%

$

2,973,674

100.0

%

 
 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

Amount

 

Percent

 

Amount

 

Percent

 

Amount

 

Percent

 
Deposits
Noninterest-bearing deposits

$

113,996

3.6

%

$

100,700

3.1

%

$

82,864

2.5

%

Interest-bearing demand deposits

$

196,841

6.1

%

 

186,015

5.8

%

 

152,391

4.5

%

Savings accounts

$

56,298

1.8

%

 

51,251

1.6

%

 

43,366

1.3

%

Money market accounts

$

1,432,355

44.6

%

 

1,397,449

43.4

%

 

1,241,874

36.7

%

Certificates of deposits

$

1,087,350

33.9

%

 

1,174,764

36.5

%

 

1,470,905

43.5

%

Brokered deposits

$

319,307

10.0

%

 

307,424

9.6

%

 

389,389

11.5

%

Total deposits

$

3,206,147

100.0

%

$

3,217,603

100.0

%

$

3,380,789

100.0

%

 
1 Includes carrying value adjustments of $40.4 million, $41.6 million and $46.0 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2021, March 31, 2021 and June 30, 2020, 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,

2021

 

2021

 

2020

 

2021

 

2020

 
Total equity - GAAP

$

358,641

 

$

344,566

 

$

307,711

 

$

358,641

 

$

307,711

 

Adjustments:
Goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

Tangible common equity

$

353,954

 

$

339,879

 

$

303,024

 

$

353,954

 

$

303,024

 

 
Total assets - GAAP

$

4,204,642

 

$

4,188,570

 

$

4,324,600

 

$

4,204,642

 

$

4,324,600

 

Adjustments:
Goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

Tangible assets

$

4,199,955

 

$

4,183,883

 

$

4,319,913

 

$

4,199,955

 

$

4,319,913

 

 
Common shares outstanding

 

9,854,153

 

 

9,823,831

 

 

9,799,047

 

 

9,854,153

 

 

9,799,047

 

 
Book value per common share

$

36.39

 

$

35.07

 

$

31.40

 

$

36.39

 

$

31.40

 

Effect of goodwill

 

(0.47

)

 

(0.47

)

 

(0.48

)

 

(0.47

)

 

(0.48

)

Tangible book value per common share

$

35.92

 

$

34.60

 

$

30.92

 

$

35.92

 

$

30.92

 

 
Total shareholders' equity to assets

 

8.53

%

 

8.23

%

 

7.12

%

 

8.53

%

 

7.12

%

Effect of goodwill

 

(0.10

%)

 

(0.11

%)

 

(0.11

%)

 

(0.10

%)

 

(0.11

%)

Tangible common equity to tangible assets

 

8.43

%

 

8.12

%

 

7.01

%

 

8.43

%

 

7.01

%

 
Total average equity - GAAP

$

352,894

 

$

335,968

 

$

306,868

 

$

344,478

 

$

308,937

 

Adjustments:
Average goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

Average tangible common equity

$

348,207

 

$

331,281

 

$

302,181

 

$

339,791

 

$

304,250

 

 
Return on average shareholders' equity

 

14.88

%

 

12.61

%

 

5.15

%

 

13.78

%

 

6.48

%

Effect of goodwill

 

0.21

%

 

0.18

%

 

0.08

%

 

0.19

%

 

0.10

%

Return on average tangible common equity

 

15.09

%

 

12.79

%

 

5.23

%

 

13.97

%

 

6.58

%

 
Total interest income

$

33,377

 

$

33,280

 

$

34,222

 

$

66,657

 

$

70,466

 

Adjustments:
Fully-taxable equivalent adjustments 1

 

1,394

 

 

1,356

 

 

1,437

 

 

2,750

 

 

2,972

 

Total interest income - FTE

$

34,771

 

$

34,636

 

$

35,659

 

$

69,407

 

$

73,438

 

 
Net interest income

$

21,607

 

$

20,525

 

$

14,426

 

$

42,132

 

$

29,444

 

Adjustments:
Fully-taxable equivalent adjustments 1

 

1,394

 

 

1,356

 

 

1,437

 

 

2,750

 

 

2,972

 

Net interest income - FTE

$

23,001

 

$

21,881

 

$

15,863

 

$

44,882

 

$

32,416

 

 
Net interest margin

 

2.11

%

 

2.04

%

 

1.37

%

 

2.08

%

 

1.43

%

Effect of fully-taxable equivalent adjustments 1

 

0.14

%

 

0.14

%

 

0.13

%

 

0.13

%

 

0.15

%

Net interest margin - FTE

 

2.25

%

 

2.18

%

 

1.50

%

 

2.21

%

 

1.58

%

 
Allowance for loan losses

$

28,066

 

$

30,642

 

$

24,465

 

$

28,066

 

$

24,465

 

 
Loans

$

2,957,608

 

$

3,058,694

 

$

2,973,674

 

$

2,957,608

 

$

2,973,674

 

Adjustments:
PPP loans

 

(39,682

)

 

(53,365

)

 

(58,948

)

 

(39,682

)

 

(58,948

)

Loans, excluding PPP loans

$

2,917,926

 

$

3,005,329

 

$

2,914,726

 

$

2,917,926

 

$

2,914,726

 

 
Allowance for loan losses to loans

 

0.95

%

 

1.00

%

 

0.82

%

 

0.95

%

 

0.82

%

Effect of PPP loans

 

0.01

%

 

0.02

%

 

0.02

%

 

0.01

%

 

0.02

%

Allowance for loan losses to loans, excluding PPP loans

 

0.96

%

 

1.02

%

 

0.84

%

 

0.96

%

 

0.84

%

 
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,

2021

 

2021

 

2020

 

2021

 

2020

 
Total revenue - GAAP

$

30,569

$

28,900

$

19,399

$

59,469

$

40,628

Adjustments:
Gain on sale of premises and equipment

(2,523

)

-

-

(2,523

)

-

Adjusted revenue

$

28,046

$

28,900

$

19,399

$

56,946

$

40,628

 
Income before income taxes - GAAP

$

15,473

 

$

12,307

 

$

3,664

 

$

27,780

 

$

9,946

 

Adjustments:
Gain on sale of premises and equipment

 

(2,523

)

 

-

 

 

-

 

 

(2,523

)

 

-

 

Adjusted income before income taxes

$

12,950

 

$

12,307

 

$

3,664

 

$

25,257

 

$

9,946

 

 
Income tax provision - GAAP

$

2,377

 

$

1,857

 

$

(268

)

$

4,234

 

$

(5

)

Adjustments:
Gain on sale of premises and equipment

 

(530

)

 

-

 

 

-

 

 

(530

)

 

-

 

Adjusted income tax provision

$

1,847

 

$

1,857

 

$

(268

)

$

3,704

 

$

(5

)

 
Net income - GAAP

$

13,096

 

$

10,450

 

$

3,932

 

$

23,546

 

$

9,951

 

Adjustments:
Gain on sale of premises and equipment

 

(1,993

)

 

-

 

 

-

 

 

(1,993

)

 

-

 

Adjusted net income

$

11,103

 

$

10,450

 

$

3,932

 

$

21,553

 

$

9,951

 

 
Diluted average common shares outstanding

 

9,981,422

 

 

9,963,036

 

 

9,768,227

 

 

9,970,147

 

 

9,802,427

 

 
Diluted earnings per share - GAAP

$

1.31

 

$

1.05

 

$

0.40

 

$

2.36

 

$

1.02

 

Adjustments:
Effect of gain on sale of premises and equipment

 

(0.20

)

 

-

 

 

-

 

 

(0.20

)

 

-

 

Adjusted diluted earnings per share

$

1.11

 

$

1.05

 

$

0.40

 

$

2.16

 

$

1.02

 

 
Return on average assets

 

1.25

%

 

1.02

%

 

0.37

%

 

1.13

%

 

0.47

%

Effect of gain on sale of premises and equipment

 

(0.19

%)

 

0.00

%

 

0.00

%

 

(0.09

%)

 

0.00

%

Adjusted return on average assets

 

1.06

%

 

1.02

%

 

0.37

%

 

1.04

%

 

0.47

%

 
Return on average shareholders' equity

 

14.88

%

 

12.61

%

 

5.15

%

 

13.78

%

 

6.48

%

Effect of gain on sale of premises and equipment

 

(2.26

%)

 

0.00

%

 

0.00

%

 

(1.16

%)

 

0.00

%

Adjusted return on average shareholders' equity

 

12.62

%

 

12.61

%

 

5.15

%

 

12.62

%

 

6.48

%

 
Return on average tangible common equity

 

15.09

%

 

12.79

%

 

5.23

%

 

13.97

%

 

6.58

%

Effect of gain on sale of premises and equipment

 

(2.30

%)

 

0.00

%

 

0.00

%

 

(1.18

%)

 

0.00

%

Adjusted return on average tangible common equity

 

12.79

%

 

12.79

%

 

5.23

%

 

12.79

%

 

6.58

%

 
Effective income tax rate

 

15.4

%

 

15.1

%

 

(7.3

%)

 

15.2

%

 

(0.1

%)

Effect of gain on sale of premises and equipment

 

(1.1

%)

 

0.0

%

 

0.0

%

 

(0.5

%)

 

0.0

%

Adjusted effective income tax rate

 

14.3

%

 

15.1

%

 

(7.3

%)

 

14.7

%

 

(0.1

%)

 

Contacts

Investors/Analysts

Paula Deemer

Director of Corporate Administration

(317) 428-4628

investors@firstib.com

Media

Nicole Lorch

President & Chief Operating Officer

(317) 532-7906

nlorch@firstib.com

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