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First Internet Bancorp Reports Third Quarter 2022 Results

Highlights for the third quarter include:

  • Quarterly net income of $8.4 million, compared to $9.5 million for the second quarter of 2022 and $12.1 million for the third quarter of 2021
  • Quarterly diluted earnings per share of $0.89, compared to $0.99 for the second quarter of 2022 and $1.21 for the third quarter of 2021
  • Quarterly adjusted net income of $8.5 million, or $0.90 adjusted diluted earnings per share, when excluding nonrecurring expenses
  • Loan growth of $173.8 million, a 5.6% increase from the second quarter of 2022 and a 10.9% increase from the third quarter of 2021
  • Net interest margin of 2.40% and fully-taxable equivalent net interest margin of 2.53%
  • Repurchased 120,000 shares at an average price of $36.56; aggregate purchase price under the authorized repurchase program has been increased to $35.0 million

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, 2022. Net income for the third quarter of 2022 was $8.4 million, or $0.89 diluted earnings per share. This compares to net income of $9.5 million, or $0.99 diluted earnings per share, for the second quarter of 2022, and net income of $12.1 million, or $1.21 diluted earnings per share, for the third quarter of 2021.

“Loan originations were up 47% over the prior quarter, demonstrating continued consumer and business confidence,” said David Becker, Chairman and Chief Executive Officer. “We continue to execute on our lending strategies, including our specialized areas of focus in commercial construction lending, SBA lending, franchise finance, and consumer lending. Given construction and SBA loans are typically variable rate products, and other fixed-rate product is coming on at higher rates, this growth sets the stage for future increases in average loan yields. We are taking a disciplined approach to capital deployment, maintaining our focus on the sound underwriting that has defined our bank for more than 20 years. Consequently, ongoing strong credit quality was a key contributor to our performance this quarter.

“We remain focused on our Fintech and Banking-as-a-Service initiatives as a way to grow lower cost deposit relationships and enhance noninterest income through payments processing. We have entered into agreements with two platforms and are piloting three Fintech partner programs. Altogether, we believe this strategy will drive stronger earnings and profitability while advancing our position as a premier technology-forward digital financial services provider.”

Mr. Becker concluded, “We continue to execute our strategies to bolster resilience in our balance sheet and earnings profile. I thank the entire First Internet team for their dedication to this pursuit and for partnering with our customers for mutual success.”

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2022 was $24.0 million, compared to $25.7 million for the second quarter of 2022, and $20.9 million for the third quarter of 2021. On a fully-taxable equivalent basis, net interest income for the third quarter of 2022 was $25.3 million, compared to $27.1 million for the second quarter of 2022, and up from $22.3 million for the third quarter of 2021.

Total interest income for the third quarter of 2022 was $39.1 million, an increase of 8.3% compared to the second quarter of 2022, and an increase of 18.4% compared to the third quarter of 2021. On a fully-taxable equivalent basis, total interest income for the third quarter of 2022 was $40.4 million, an increase of 7.7% compared to the second quarter of 2022, and an increase of 17.4% compared to the third quarter of 2021. The sequential increase was due primarily to growth in interest income earned on the commercial and consumer loan portfolios, the securities portfolio and other earning assets. The yield on average interest-earning assets for the third quarter of 2022 increased to 3.91% from 3.65% in the linked quarter due primarily to a 22 basis point (“bp”) increase in the yield earned on securities and a 167 bp increase in the yield earned on other earning assets. Compared to the linked quarter, average loan balances increased $163.7 million, or 5.5%, while the average balance of securities decreased $14.1 million, or 2.3%, and the average balance of other earning assets decreased $133.8 million, or 41.5%.

Interest income earned on commercial loans was positively impacted by higher rates in the variable rate small business lending, construction and commercial and industrial portfolios as well as strong growth in the franchise finance portfolio. This activity was partially offset by significantly lower prepayment fees in the healthcare finance and single tenant lease financing portfolios. In the consumer portfolio, interest income was up due to the combination of higher new origination yields and growth in the residential mortgage, trailers, RV and other consumer portfolios.

New funded portfolio origination yields increased 52 bps compared to the second quarter, and year-to-date 2022 have been approximately 87 bps higher than for the same period in 2021. Because of the fixed rate nature of certain larger portfolios, there is a lagging impact of the higher origination yields on the portfolio. Additionally, the yield earned on the loan portfolio was impacted by the timing of funded loans as over 50% of total funded originations occurred during September.

The Federal Reserve has increased the federal funds (“Fed Funds”) target rate 300 bps year-to-date, with half of the increase coming in the third quarter. To date, the Company has modestly increased the rate paid on consumer, small business and commercial interest-bearing demand deposits. While money market deposit pricing was relatively rational during the second quarter, competition in both the digital banking space and local markets intensified, and deposit betas increased as a result. The cost of the Company’s BaaS brokered deposits, which is tied to Fed Funds, contributed to the overall increase in interest expense as well. Furthermore, the combination of higher interest rates and industry dynamics, including the outflow of deposits from the overall banking system, drove higher pricing in the wholesale deposit market.

The Company also increased its use of advances from the Federal Home Loan Bank to supplement growth and manage long term interest rate risk, borrowing $100.0 million of longer term advances. Total interest expense was impacted by the costs related to other borrowed funds as the rates on these advances, which are now well below market, contributed to higher total funding costs.

As a result, total interest expense for the third quarter of 2022 was $15.1 million, an increase of 44.9% compared to the second quarter of 2022, and an increase of 24.7% compared to the third quarter of 2021.

During the third quarter of 2022, the average balance of interest-bearing deposits decreased $57.1 million, or 1.9%, compared to the second quarter of 2022 while the cost of these deposits increased 56 bps. The decrease in average interest-bearing deposit balances was due to a decline in average certificates and brokered deposit balances, which decreased $66.8 million, or 6.0%, during the quarter while the cost of these deposits increased 31 bps. Additionally, the average balance of money market accounts decreased $57.9 million, or 4.1%, compared to the second quarter of 2022 while the cost of these deposits increased 79 bps. These declines were partially offset by an increase of $82.7 million, or 116.1%, in the average balance of BaaS – brokered deposits.

Net interest margin (“NIM”) was 2.40% for the third quarter of 2022, down from 2.60% for the second quarter of 2022 and up from 2.00% for the third quarter of 2021. Fully-taxable equivalent NIM (“FTE NIM”) was 2.53% for the third quarter of 2022, down from 2.74% for the second quarter of 2022 and up from 2.13% for the third quarter of 2021. The decrease in FTE NIM compared to the linked quarter was driven primarily by the effect of higher interest-bearing deposit costs, partially offset by higher yields on securities, other earning assets and higher average loan balances.

Noninterest Income

Noninterest income for the third quarter of 2022 was $4.3 million, stable with the second quarter of 2022, and down from $7.8 million for the third quarter of 2021. Gain on sale of loans totaled $2.7 million for the third quarter of 2022, up $0.8 million, or 39.0% from the linked quarter. Gain on sale revenue in the quarter consisted entirely of gain on the sales of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans. The increase in revenue related to SBA loan sales was due to a higher volume of sales, partially offset by lower net gain on sale premiums. Mortgage banking revenue totaled $0.9 million for the third quarter of 2022, down $0.8 million, or 49.1%, from the linked quarter as the continued rise in interest rates negatively impacted interest rate lock and sold loan volume as well as gain on sale margins.

Noninterest Expense

Noninterest expense for the third quarter of 2022 was $18.0 million, stable with the second quarter of 2022 and up from $14.5 million for the third quarter of 2021. Consulting and professional fees and salaries and employee benefits declined from the linked quarter, while loan expenses and premises and equipment costs were higher. The decrease in consulting and professional fees was due primarily to the timing of third party loan review and stress testing. The lower salaries and employee benefits expense was due mainly to discretionary inflation bonuses paid to certain employees and accelerated equity compensation related to retirements in the second quarter and lower incentive compensation in the Company’s mortgage banking division, partially offset by increased headcount as well as higher incentive compensation in SBA and construction lending. The increase in loan expenses was driven primarily by higher servicing costs associated with the growth in our franchise finance loan portfolio as well as risk management vendor costs. The increase in premises and equipment costs was impacted by a $125,000 write-down of software as well as costs related to the buildout of the Company’s small business banking platform.

Income Taxes

The Company reported an income tax expense of $1.0 million for the third quarter of 2022 and an effective tax rate of 10.5%, compared to an income tax expense of $1.3 million and an effective tax rate of 11.8% for the second quarter of 2022 and an income tax expense of $2.2 million and an effective tax rate of 15.5% for the third quarter of 2021. The lower effective tax rate reflects a higher proportion of tax exempt income relative to total pre-tax income.

Loans and Credit Quality

Total loans as of September 30, 2022 were $3.3 billion, an increase of $173.8 million, or 5.6%, compared to June 30, 2022, and an increase of $319.8 million, or 10.9%, compared to September 30, 2021. Total commercial loan balances were $2.5 billion as of September 30, 2022, an increase of $97.3 million, or 4.0%, compared to June 30, 2022 and an increase of $129.6 million, or 5.4%, compared to September 30, 2021. Compared to the linked quarter, the increase in commercial loan balances was driven primarily by growth in franchise finance, investor commercial real estate and single tenant lease financing loan balances. These items were partially offset by net payoffs in healthcare finance and commercial and industrial.

Total consumer loan balances were $672.2 million as of September 30, 2022, an increase of $78.2 million, or 13.2%, compared to June 30, 2022, and an increase of $197.1 million, or 41.5%, compared to September 30, 2021. The increase compared to the linked quarter was due to higher balances in the residential mortgage, recreational vehicles and trailers loan portfolios.

Total delinquencies 30 days or more past due were 0.06% of total loans as of September 30, 2022, consistent with both June 30, 2022 and September 30, 2021. Overall credit quality remained strong during the quarter as nonperforming loans to total loans was 0.18% as of September 30, 2022, compared to 0.15% at June 30, 2022 and 0.27% as of September 30, 2021. Nonperforming loans totaled $6.0 million at quarter end, up from $4.5 million at June 30, 2022.

The allowance for loan losses as a percentage of total loans was 0.92% as of September 30, 2022, both in total and when excluding PPP loans, compared to 0.95% in both categories as of June 30, 2022 and 0.95% and 0.96%, respectively, as of September 30, 2021. The decline in the allowance coverage ratio reflects growth in certain portfolios with lower coverage ratios as well as the continued decline in healthcare finance balances that have a higher coverage ratio.

Net charge-offs of $0.2 million were recognized during the third quarter of 2022, resulting in net charge-offs to average loans of 0.02%, compared to net charge-offs to average loans of 0.04% for the second quarter of 2022 and net charge-offs to average loans of 0.01% for the third quarter of 2021.

The provision for loan losses in the third quarter of 2022 was $0.9 million, compared to a provision of $1.2 million for the second quarter of 2022 and a credit for loan losses of $29,000 for the third quarter of 2021. The provision for the quarter was driven by the overall growth in the loan portfolio, partially offset by reductions in specific reserves as there were positive developments on certain monitored loans.

Capital

As of September 30, 2022, total shareholders’ equity was $360.9 million, a decrease of $4.5 million, or 1.2%, compared to June 30, 2022 and a decrease of $9.6 million, or 2.6%, compared to September 30, 2021. The decline in shareholders’ equity during the third quarter of 2022 was due primarily to an increase in accumulated other comprehensive loss resulting from a decline in the value of the available-for-sale securities portfolio caused by the continued rise in interest rates during the quarter and stock repurchase activity. This was partially offset by the net income earned during the quarter and an increase in the value of interest rate swaps classified as cash flow hedges. Book value per common share increased to $38.84 as of September 30, 2022, relatively stable with June 30, 2022 and up from $37.59 as of September 30, 2021. Tangible book value per share was $38.34, also relatively stable with June 30, 2022 and up from $37.12 as of September 30, 2021.

In connection with its previously announced stock repurchase program, which has been increased to a total aggregate purchase price of $35.0 million, the Company repurchased 120,000 shares of its common stock during the third quarter of 2022 at an average price of $36.56 per share. Including shares repurchased since the fourth quarter of 2021, the Company has repurchased $25.1 million of stock under the total upsized authorization of $35.0 million.

The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of September 30, 2022.

As of September 30, 2022

Company

Bank

 

Total shareholders' equity to assets

8.46

%

10.14

%

Tangible common equity to tangible assets 1

8.36

%

10.04

%

Tier 1 leverage ratio 2

9.49

%

11.22

%

Common equity tier 1 capital ratio 2

11.72

%

13.87

%

Tier 1 capital ratio 2

11.72

%

13.87

%

Total risk-based capital ratio 2

15.73

%

14.77

%

 

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, October 20, 2022 to discuss its quarterly financial results. The call can be accessed via telephone at (844) 200-6205; access code: 136923. A recorded replay can be accessed through November 19, 2022 by dialing (866) 813-9403; access code: 630846.

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 financial holding company with assets of $4.3 billion as of September 30, 2022. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. The First Internet Bank provides consumer and small business deposit, SBA financing, franchise finance, residential mortgage loans, 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, 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 “ahead,” “anticipate,” “believe,” “capitalize,” “confidence in,” “continue,” “could,” “designed,” “effort,” “estimate,” “expect,” “growth,” “help,” “hope,” “intend,” “looking forward,” “may,” “opportunities,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “waiting on,” “well-positioned,” “will,” “working on,” “would” or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the information in the forward-looking statements. Such statements are subject to certain risks and uncertainties including: 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. Other factors that may cause such differences include: failures or breaches of or interruptions in the communications and information systems on which we rely to conduct our business; failure of our plans to grow our commercial real estate, commercial and industrial, public finance, SBA, and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; execution of pending and future acquisition, reorganization or disposition transactions, including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; fluctuations in interest rates; 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, adjusted total interest income - FTE, net interest income – FTE, adjusted net interest income, adjusted net interest income – FTE, net interest margin – FTE, adjusted net interest margin, adjusted net interest margin – FTE, provision (benefit) for loan losses, excluding tax refund advance loans, average loans, excluding tax refund advance loans, net (recoveries) charge-offs to average loans, excluding tax refund advance loans, allowance for loan losses to loans, excluding PPP loans, adjusted noninterest expense, 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, adjusted effective income tax rate, income before income taxes, excluding tax refund advance loans, income tax provision, excluding tax refund advance loans and net income, excluding tax refund advance loans 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,

2022

 

2022

 

2021

 

2022

 

2021

 
Net income

$

8,436

 

$

9,545

 

$

12,090

 

$

29,190

 

$

35,636

 

 
Per share and share information
Earnings per share - basic

$

0.89

 

$

0.99

 

$

1.22

 

$

3.04

 

$

3.59

 

Earnings per share - diluted

 

0.89

 

 

0.99

 

 

1.21

 

 

3.01

 

 

3.57

 

Dividends declared per share

 

0.06

 

 

0.06

 

 

0.06

 

 

0.18

 

 

0.18

 

Book value per common share

 

38.84

 

 

38.85

 

 

37.59

 

 

38.84

 

 

37.59

 

Tangible book value per common share 1

 

38.34

 

 

38.35

 

 

37.12

 

 

38.34

 

 

37.12

 

Common shares outstanding

 

9,290,885

 

 

9,404,000

 

 

9,854,153

 

 

9,290,885

 

 

9,854,153

 

Average common shares outstanding:
Basic

 

9,458,259

 

 

9,600,383

 

 

9,936,237

 

 

9,615,039

 

 

9,922,877

 

Diluted

 

9,525,855

 

 

9,658,689

 

 

9,988,102

 

 

9,681,742

 

 

9,974,071

 

Performance ratios
Return on average assets

 

0.82

%

 

0.93

%

 

1.12

%

 

0.94

%

 

1.13

%

Return on average shareholders' equity

 

9.01

%

 

10.23

%

 

13.10

%

 

10.40

%

 

13.54

%

Return on average tangible common equity 1

 

9.13

%

 

10.36

%

 

13.27

%

 

10.53

%

 

13.73

%

Net interest margin

 

2.40

%

 

2.60

%

 

2.00

%

 

2.52

%

 

2.05

%

Net interest margin - FTE 1,2

 

2.53

%

 

2.74

%

 

2.13

%

 

2.65

%

 

2.19

%

Capital ratios 3
Total shareholders' equity to assets

 

8.46

%

 

8.91

%

 

8.71

%

 

8.46

%

 

8.71

%

Tangible common equity to tangible assets 1

 

8.36

%

 

8.81

%

 

8.61

%

 

8.36

%

 

8.61

%

Tier 1 leverage ratio

 

9.49

%

 

9.45

%

 

8.86

%

 

9.49

%

 

8.86

%

Common equity tier 1 capital ratio 11.72

%

 

12.46

%

 

12.62

%

11.72

%

 

12.62

%

Tier 1 capital ratio

11.72

%

 

12.46

%

 

12.62

%

11.72

%

 

12.62

%

Total risk-based capital ratio

15.73

%

 

16.74

%

 

17.04

%

15.73

%

 

17.04

%

Asset quality
Nonperforming loans

$

6,006

 

$

4,527

 

$

7,851

 

$

6,006

 

$

7,851

 

Nonperforming assets

 

6,006

 

 

4,550

 

 

9,039

 

 

6,006

 

 

9,039

 

Nonperforming loans to loans

 

0.18

%

 

0.15

%

 

0.27

%

 

0.18

%

 

0.27

%

Nonperforming assets to total assets

 

0.14

%

 

0.11

%

 

0.21

%

 

0.14

%

 

0.21

%

Allowance for loan losses to:
Loans

 

0.92

%

 

0.95

%

 

0.95

%

 

0.92

%

 

0.95

%

Loans, excluding PPP loans 1

 

0.92

%

 

0.95

%

 

0.96

%

 

0.92

%

 

0.96

%

Nonperforming loans

 

497.3

%

 

644.0

%

 

356.6

%

 

497.3

%

 

356.6

%

Net charge-offs to average loans

 

0.02

%

 

0.04

%

 

0.01

%

 

0.04

%

 

0.12

%

Average balance sheet information
Loans

$

3,161,850

 

$

2,998,144

 

$

2,933,654

 

$

3,036,532

 

$

2,991,556

 

Total securities

 

606,329

 

 

620,396

 

 

713,342

 

 

624,995

 

 

612,755

 

Other earning assets

 

188,467

 

 

322,302

 

 

479,051

 

 

321,262

 

 

478,399

 

Total interest-earning assets

 

3,970,650

 

 

3,962,589

 

 

4,148,726

 

 

4,004,025

 

 

4,107,971

 

Total assets

 

4,105,688

 

 

4,097,865

 

 

4,265,189

 

 

4,138,866

 

 

4,215,479

 

Noninterest-bearing deposits

 

124,067

 

 

108,980

 

 

104,161

 

 

115,142

 

 

97,760

 

Interest-bearing deposits

 

2,961,327

 

 

3,018,422

 

 

3,137,728

 

 

3,016,652

 

 

3,121,039

 

Total deposits

 

3,085,394

 

 

3,127,402

 

 

3,241,889

 

 

3,131,794

 

 

3,218,799

 

Shareholders' equity

 

371,303

 

 

374,274

 

 

366,187

 

 

375,190

 

 

351,794

 

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,

2022

 

2022

 

2021

 
Assets
Cash and due from banks

$

14,743

 

$

6,155

 

$

4,932

 

Interest-bearing deposits

 

206,309

 

 

201,798

 

 

402,583

 

Securities available-for-sale, at fair value

 

393,565

 

 

425,489

 

 

634,007

 

Securities held-to-maturity, at amortized cost

 

191,057

 

 

185,113

 

 

62,129

 

Loans held-for-sale

 

23,103

 

 

31,580

 

 

43,970

 

Loans

 

3,255,906

 

 

3,082,127

 

 

2,936,148

 

Allowance for loan losses

 

(29,866

)

 

(29,153

)

 

(28,000

)

Net loans

 

3,226,040

 

 

3,052,974

 

 

2,908,148

 

Accrued interest receivable

 

16,918

 

 

17,466

 

 

14,866

 

Federal Home Loan Bank of Indianapolis stock

 

28,350

 

 

25,219

 

 

25,650

 

Cash surrender value of bank-owned life insurance

 

39,612

 

 

39,369

 

 

38,660

 

Premises and equipment, net

 

70,747

 

 

70,288

 

 

52,700

 

Goodwill

 

4,687

 

 

4,687

 

 

4,687

 

Servicing asset

 

5,795

 

 

5,345

 

 

4,412

 

Other real estate owned

 

-

 

 

-

 

 

1,188

 

Accrued income and other assets

 

43,498

 

 

34,323

 

 

54,360

 

Total assets

$

4,264,424

 

$

4,099,806

 

$

4,252,292

 

 
Liabilities
Noninterest-bearing deposits

$

142,875

 

$

126,153

 

$

110,117

 

Interest-bearing deposits

 

3,049,769

 

 

3,025,948

 

 

3,114,478

 

Total deposits

 

3,192,644

 

 

3,152,101

 

 

3,224,595

 

Advances from Federal Home Loan Bank

 

589,926

 

 

464,925

 

 

514,920

 

Subordinated debt

 

104,456

 

 

104,381

 

 

104,156

 

Accrued interest payable

 

1,887

 

 

2,005

 

 

1,568

 

Accrued expenses and other liabilities

 

14,654

 

 

11,062

 

 

36,611

 

Total liabilities

 

3,903,567

 

 

3,734,474

 

 

3,881,850

 

Shareholders' equity
Voting common stock

 

200,123

 

 

204,071

 

 

223,059

 

Retained earnings

 

199,877

 

 

192,011

 

 

160,551

 

Accumulated other comprehensive loss

 

(39,143

)

 

(30,750

)

 

(13,168

)

Total shareholders' equity

 

360,857

 

 

365,332

 

 

370,442

 

Total liabilities and shareholders' equity

$

4,264,424

 

$

4,099,806

 

$

4,252,292

 

 
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,

2022

 

2022

 

2021

 

2022

 

2021

 
Interest income
Loans

$

34,643

 

$

32,415

 

$

30,126

 

$

100,246

 

$

91,846

 

Securities - taxable

 

2,701

 

 

2,567

 

 

2,297

 

 

7,489

 

 

5,997

 

Securities - non-taxable

 

491

 

 

328

 

 

241

 

 

1,068

 

 

781

 

Other earning assets

 

1,264

 

 

796

 

 

370

 

 

2,436

 

 

1,067

 

Total interest income

 

39,099

 

 

36,106

 

 

33,034

 

 

111,239

 

 

99,691

 

Interest expense
Deposits

 

10,520

 

 

6,408

 

 

7,090

 

 

23,025

 

 

23,423

 

Other borrowed funds

 

4,585

 

 

4,018

 

 

5,025

 

 

12,790

 

 

13,217

 

Total interest expense

 

15,105

 

 

10,426

 

 

12,115

 

 

35,815

 

 

36,640

 

Net interest income

 

23,994

 

 

25,680

 

 

20,919

 

 

75,424

 

 

63,051

 

Provision for loan losses

 

892

 

 

1,185

 

 

(29

)

 

2,868

 

 

1,268

 

Net interest income after provision
for loan losses

 

23,102

 

 

24,495

 

 

20,948

 

 

72,556

 

 

61,783

 

Noninterest income
Service charges and fees

 

248

 

 

281

 

 

276

 

 

845

 

 

822

 

Loan servicing revenue

 

653

 

 

620

 

 

511

 

 

1,858

 

 

1,390

 

Loan servicing asset revaluation

 

(333

)

 

(470

)

 

(274

)

 

(1,100

)

 

(669

)

Mortgage banking activities

 

871

 

 

1,710

 

 

3,850

 

 

4,454

 

 

12,274

 

Gain on sale of loans

 

2,713

 

 

1,952

 

 

2,719

 

 

8,510

 

 

7,461

 

Gain on sale of premises and equipment

 

-

 

 

-

 

 

-

 

 

-

 

 

2,523

 

Other

 

164

 

 

221

 

 

731

 

 

883

 

 

1,349

 

Total noninterest income

 

4,316

 

 

4,314

 

 

7,813

 

 

15,450

 

 

25,150

 

Noninterest expense
Salaries and employee benefits

 

10,439

 

 

10,832

 

 

9,316

 

 

31,149

 

 

28,040

 

Marketing, advertising and promotion

 

1,041

 

 

920

 

 

813

 

 

2,717

 

 

2,365

 

Consulting and professional fees

 

790

 

 

1,197

 

 

728

 

 

3,912

 

 

2,792

 

Data processing

 

483

 

 

490

 

 

380

 

 

1,422

 

 

1,224

 

Loan expenses

 

1,142

 

 

693

 

 

383

 

 

3,417

 

 

1,458

 

Premises and equipment

 

2,808

 

 

2,419

 

 

1,687

 

 

7,767

 

 

4,875

 

Deposit insurance premium

 

229

 

 

287

 

 

230

 

 

797

 

 

930

 

Other

 

1,063

 

 

1,147

 

 

914

 

 

3,579

 

 

3,159

 

Total noninterest expense

 

17,995

 

 

17,985

 

 

14,451

 

 

54,760

 

 

44,843

 

Income before income taxes

 

9,423

 

 

10,824

 

 

14,310

 

 

33,246

 

 

42,090

 

Income tax provision

 

987

 

 

1,279

 

 

2,220

 

 

4,056

 

 

6,454

 

Net income

$

8,436

 

$

9,545

 

$

12,090

 

$

29,190

 

$

35,636

 

 
Per common share data
Earnings per share - basic

$

0.89

 

$

0.99

 

$

1.22

 

$

3.04

 

$

3.59

 

Earnings per share - diluted

$

0.89

 

$

0.99

 

$

1.21

 

$

3.01

 

$

3.57

 

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, 2022 June 30, 2022 September 30, 2021
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

$

3,175,854

 

$

34,643

4.33

%

$

3,019,891

 

$

32,415

4.31

%

$

2,956,333

 

$

30,126

4.04

%

Securities - taxable

 

532,470

 

 

2,701

2.01

%

 

543,422

 

 

2,567

1.89

%

 

629,101

 

 

2,297

1.45

%

Securities - non-taxable

 

73,859

 

 

491

2.64

%

 

76,974

 

 

328

1.71

%

 

84,241

 

 

241

1.14

%

Other earning assets

 

188,467

 

 

1,264

2.66

%

 

322,302

 

 

796

0.99

%

 

479,051

 

 

370

0.31

%

Total interest-earning assets

 

3,970,650

 

 

39,099

3.91

%

 

3,962,589

 

 

36,106

3.65

%

 

4,148,726

 

 

33,034

3.16

%

 
Allowance for loan losses

 

(29,423

)

 

(28,599

)

 

(28,127

)

Noninterest-earning assets

 

164,461

 

 

163,875

 

 

144,590

 

Total assets

$

4,105,688

 

$

4,097,865

 

$

4,265,189

 

 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits

$

342,116

 

$

551

0.64

%

$

348,274

 

$

466

0.54

%

$

198,637

 

$

150

0.30

%

Savings accounts

 

57,700

 

 

111

0.76

%

 

66,657

 

 

68

0.41

%

 

62,195

 

 

56

0.36

%

Money market accounts

 

1,369,783

 

 

4,581

1.33

%

 

1,427,665

 

 

1,921

0.54

%

 

1,498,218

 

 

1,532

0.41

%

BaaS - brokered deposits

 

153,936

 

 

859

2.21

%

 

71,234

 

 

154

0.87

%

 

-

 

 

-

0.00

%

Certificates and brokered deposits

 

1,037,792

 

 

4,418

1.69

%

 

1,104,592

 

 

3,799

1.38

%

 

1,378,678

 

 

5,352

1.54

%

Total interest-bearing deposits

 

2,961,327

 

 

10,520

1.41

%

 

3,018,422

 

 

6,408

0.85

%

 

3,137,728

 

 

7,090

0.90

%

Other borrowed funds

 

637,877

 

 

4,585

2.85

%

 

583,553

 

 

4,018

2.76

%

 

611,975

 

 

5,025

3.26

%

Total interest-bearing liabilities

 

3,599,204

 

 

15,105

1.67

%

 

3,601,975

 

 

10,426

1.16

%

 

3,749,703

 

 

12,115

1.28

%

 
Noninterest-bearing deposits

 

124,067

 

 

108,980

 

 

104,161

 

Other noninterest-bearing liabilities

 

11,114

 

 

12,636

 

 

45,138

 

Total liabilities

 

3,734,385

 

 

3,723,591

 

 

3,899,002

 

 
Shareholders' equity

 

371,303

 

 

374,274

 

 

366,187

 

Total liabilities and shareholders' equity

$

4,105,688

 

$

4,097,865

 

$

4,265,189

 

 
Net interest income

$

23,994

$

25,680

$

20,919

 
Interest rate spread

2.24

%

2.49

%

1.88

%

 
Net interest margin

2.40

%

2.60

%

2.00

%

 
Net interest margin - FTE 2,3

2.53

%

2.74

%

2.13

%

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, 2022 September 30, 2021
Average Interest / Yield / Average Interest / Yield /
Balance Dividends Cost Balance Dividends Cost
 
Assets
Interest-earning assets
Loans, including loans held-for-sale 1

$

3,057,768

 

$

100,246

4.38

%

$

3,016,817

 

$

91,846

4.07

%

Securities - taxable

 

547,759

 

 

7,489

1.83

%

 

527,625

 

 

5,997

1.52

%

Securities - non-taxable

 

77,236

 

 

1,068

1.85

%

 

85,130

 

 

781

1.23

%

Other earning assets

 

321,262

 

 

2,436

1.01

%

 

478,399

 

 

1,067

0.30

%

Total interest-earning assets

 

4,004,025

 

 

111,239

3.71

%

 

4,107,971

 

 

99,691

3.24

%

 

 

Allowance for loan losses

 

(28,671

)

 

(29,446

)

Noninterest-earning assets

 

163,512

 

 

136,954

 

Total assets

$

4,138,866

 

$

4,215,479

 

 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits

$

336,311

 

$

1,429

0.57

%

$

190,785

 

$

425

0.30

%

Savings accounts

 

61,647

 

 

232

0.50

%

 

54,740

 

 

145

0.35

%

Money market accounts

 

1,416,984

 

 

8,006

0.76

%

 

1,428,554

 

 

4,385

0.41

%

BaaS - brokered deposits

 

79,613

 

 

1,019

1.71

%

 

-

 

 

-

0.00

%

Certificates and brokered deposits

 

1,122,097

 

 

12,339

1.47

%

 

1,446,960

 

 

18,468

1.71

%

Total interest-bearing deposits

 

3,016,652

 

 

23,025

1.02

%

 

3,121,039

 

 

23,423

1.00

%

Other borrowed funds

 

613,609

 

 

12,790

2.79

%

 

593,605

 

 

13,217

2.98

%

Total interest-bearing liabilities

 

3,630,261

 

 

35,815

1.32

%

 

3,714,644

 

 

36,640

1.32

%

 
Noninterest-bearing deposits

 

115,142

 

 

97,760

 

Other noninterest-bearing liabilities

 

18,273

 

 

51,281

 

Total liabilities

 

3,763,676

 

 

3,863,685

 

 
Shareholders' equity

 

375,190

 

 

351,794

 

Total liabilities and shareholders' equity

$

4,138,866

 

$

4,215,479

 

 
Net interest income

$

75,424

$

63,051

 
Interest rate spread

2.39

%

1.92

%

 
Net interest margin

2.52

%

2.05

%

 
Net interest margin - FTE 2,3

2.65

%

2.19

%

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, 2022 June 30, 2022 September 30, 2021
Amount Percent Amount Percent Amount Percent
 
Commercial loans
Commercial and industrial

$

104,780

3.2

%

$

110,540

3.6

%

$

107,142

3.6

%

Owner-occupied commercial real estate

 

58,615

1.8

%

 

61,277

2.0

%

 

84,819

2.9

%

Investor commercial real estate

 

91,021

2.8

%

 

52,648

1.7

%

 

28,505

1.0

%

Construction

 

139,509

4.3

%

 

143,475

4.7

%

 

115,414

3.9

%

Single tenant lease financing

 

895,302

27.4

%

 

867,181

28.1

%

 

921,998

31.5

%

Public finance

 

614,139

18.9

%

 

613,759

19.9

%

 

601,738

20.5

%

Healthcare finance

 

293,686

9.0

%

 

317,180

10.3

%

 

417,388

14.2

%

Small business lending

 

113,001

3.5

%

 

102,724

3.3

%

 

102,889

3.5

%

Franchise finance

 

225,012

6.8

%

 

168,942

5.5

%

 

25,598

0.9

%

Total commercial loans

 

2,535,065

77.7

%

 

2,437,726

79.1

%

 

2,405,491

82.0

%

 
Consumer loans
Residential mortgage

 

337,565

10.4

%

 

281,124

9.1

%

 

188,750

6.4

%

Home equity

 

22,114

0.7

%

 

19,928

0.6

%

 

17,960

0.6

%

Trailers

 

162,161

5.0

%

 

154,555

5.0

%

 

147,806

5.0

%

Recreational vehicles

 

115,694

3.6

%

 

105,876

3.4

%

 

90,192

3.1

%

Other consumer loans

 

34,657

1.1

%

 

32,524

1.2

%

 

30,398

1.0

%

Total consumer loans

 

672,191

20.8

%

 

594,007

19.3

%

 

475,106

16.1

%

 
Net deferred loan fees, premiums, discounts and other 1

 

48,650

1.5

%

 

50,394

1.6

%

 

55,551

1.9

%

 
Total loans

$

3,255,906

100.0

%

$

3,082,127

100.0

%

$

2,936,148

100.0

%

 
 
September 30, 2022 June 30, 2022 September 30, 2021
Amount Percent Amount Percent Amount Percent
 
Deposits
Noninterest-bearing deposits

$

142,635

4.5

%

$

126,153

4.0

%

$

110,117

3.4

%

Interest-bearing demand deposits

 

337,765

10.6

%

 

350,551

11.1

%

 

201,557

6.3

%

Savings accounts

 

52,228

1.6

%

 

65,365

2.1

%

 

66,762

2.1

%

Money market accounts

 

1,378,087

43.2

%

 

1,363,424

43.3

%

 

1,479,358

45.8

%

BaaS - brokered deposits

 

96,287

3.0

%

 

194,133

6.2

%

 

-

0.0

%

Certificates of deposits

 

773,040

24.2

%

 

800,598

25.3

%

 

1,043,898

32.4

%

Brokered deposits

 

412,602

12.9

%

 

251,877

8.0

%

 

322,903

10.0

%

 
Total deposits

$

3,192,644

100.0

%

$

3,152,101

100.0

%

$

3,224,595

100.0

%

1 Includes carrying value adjustments of $33.9 million, $35.4 million and $38.9 million related to terminated interest rate swaps associated with public finance loans as of September 30, 2022, June 30, 2022 and September 30, 2021, 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,

2022

 

2022

 

2021

 

2022

 

2021

 
Total equity - GAAP

$

360,857

 

$

365,332

 

$

370,442

 

$

360,857

 

$

370,442

 

Adjustments:
Goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

Tangible common equity

$

356,170

 

$

360,645

 

$

365,755

 

$

356,170

 

$

365,755

 

 
Total assets - GAAP

$

4,264,424

 

$

4,099,806

 

$

4,252,292

 

$

4,264,424

 

$

4,252,292

 

Adjustments:
Goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

Tangible assets

$

4,259,737

 

$

4,095,119

 

$

4,247,605

 

$

4,259,737

 

$

4,247,605

 

 
Common shares outstanding

 

9,290,885

 

 

9,404,000

 

 

9,854,153

 

 

9,290,885

 

 

9,854,153

 

 
Book value per common share

$

38.84

 

$

38.85

 

$

37.59

 

$

38.84

 

$

37.59

 

Effect of goodwill

 

(0.50

)

 

(0.50

)

 

(0.47

)

 

(0.50

)

 

(0.47

)

Tangible book value per common share

$

38.34

 

$

38.35

 

$

37.12

 

$

38.34

 

$

37.12

 

 
Total shareholders' equity to assets

 

8.46

%

 

8.91

%

 

8.71

%

 

8.46

%

 

8.71

%

Effect of goodwill

 

(0.10

%)

 

(0.10

%)

 

(0.10

%)

 

(0.10

%)

 

(0.10

%)

Tangible common equity to tangible assets

 

8.36

%

 

8.81

%

 

8.61

%

 

8.36

%

 

8.61

%

 
Total average equity - GAAP

$

371,303

 

$

374,274

 

$

366,187

 

$

375,190

 

$

351,794

 

Adjustments:
Average goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

 

(4,687

)

Average tangible common equity

$

366,616

 

$

369,587

 

$

361,500

 

$

370,503

 

$

347,107

 

 
Return on average shareholders' equity

 

9.01

%

 

10.23

%

 

13.10

%

 

10.40

%

 

13.54

%

Effect of goodwill

 

0.12

%

 

0.13

%

 

0.17

%

 

0.13

%

 

0.19

%

Return on average tangible common equity

 

9.13

%

 

10.36

%

 

13.27

%

 

10.53

%

 

13.73

%

 
Total interest income

$

39,099

 

$

36,106

 

$

33,034

 

$

111,239

 

$

99,691

 

Adjustments:
Fully-taxable equivalent adjustments 1

 

1,280

 

 

1,377

 

 

1,356

 

 

3,971

 

 

4,105

 

Total interest income - FTE

$

40,379

 

$

37,483

 

$

34,390

 

$

115,210

 

$

103,796

 

 
Total interest income - FTE

$

40,379

 

$

37,483

 

$

34,390

 

$

115,210

 

$

103,796

 

Adjustments:
Income from tax refund advance loans

 

-

 

 

(149

)

 

-

 

 

(3,013

)

 

-

 

Adjusted total interest income - FTE

$

40,379

 

$

37,334

 

$

34,390

 

$

112,197

 

$

103,796

 

 
Net interest income

$

23,994

 

$

25,680

 

$

20,919

 

$

75,424

 

$

63,051

 

Adjustments:
Fully-taxable equivalent adjustments 1

 

1,280

 

 

1,377

 

 

1,356

 

 

3,971

 

 

4,105

 

Net interest income - FTE

$

25,274

 

$

27,057

 

$

22,275

 

$

79,395

 

$

67,156

 

 
Net interest income

$

23,994

 

$

25,680

 

$

20,919

 

$

75,424

 

$

63,051

 

Adjustments:
Subordinated debt redemption cost

 

-

 

 

-

 

 

810

 

 

-

 

 

810

 

Income from tax refund advance loans

 

-

 

 

(149

)

 

-

 

 

(3,013

)

 

-

 

Adjusted net interest income

$

23,994

 

$

25,531

 

$

21,729

 

$

72,411

 

$

63,861

 

 
Net interest income

$

23,994

 

$

25,680

 

$

20,919

 

$

75,424

 

$

63,051

 

Adjustments:
Fully-taxable equivalent adjustments 1

 

1,280

 

 

1,377

 

 

1,356

 

 

3,971

 

 

4,105

 

Subordinated debt redemption cost

 

-

 

 

-

 

 

810

 

 

-

 

 

810

 

Income from tax refund advance loans

 

-

 

 

(149

)

 

-

 

 

(3,013

)

 

-

 

Adjusted net interest income - FTE

$

25,274

 

$

26,908

 

$

23,085

 

$

76,382

 

$

67,966

 

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,

2022

 

2022

 

2021

 

2022

 

2021

 
Net interest margin

 

2.40

%

 

2.60

%

 

2.00

%

 

2.52

%

 

2.05

%

Effect of fully-taxable equivalent adjustments 1

 

0.13

%

 

0.14

%

 

0.13

%

 

0.13

%

 

0.14

%

Net interest margin - FTE

 

2.53

%

 

2.74

%

 

2.13

%

 

2.65

%

 

2.19

%

 
Net interest margin

 

2.40

%

 

2.60

%

 

2.00

%

 

2.52

%

 

2.05

%

Effect of subordinated debt redemption cost

 

0.00

%

 

0.00

%

 

0.08

%

 

0.00

%

 

0.02

%

Effect of income from tax refund advance loans

 

0.00

%

 

(0.02

%)

 

0.00

%

 

(0.10

%)

 

0.00

%

Adjusted net interest margin

 

2.40

%

 

2.58

%

 

2.08

%

 

2.42

%

 

2.07

%

 
Net interest margin

 

2.40

%

 

2.60

%

 

2.00

%

 

2.52

%

 

2.05

%

Effect of fully-taxable equivalent adjustments 1

 

0.13

%

 

0.14

%

 

0.13

%

 

0.13

%

 

0.14

%

Effect of subordinated debt redemption cost

 

0.00

%

 

0.00

%

 

0.08

%

 

0.00

%

 

0.02

%

Effect of income from tax refund advance loans

 

0.00

%

 

(0.02

%)

 

0.00

%

 

(0.10

%)

 

0.00

%

Adjusted net interest margin - FTE

 

2.53

%

 

2.72

%

 

2.21

%

 

2.55

%

 

2.21

%

 
Provision for loan losses

$

892

 

$

1,185

 

$

(29

)

$

2,868

 

$

1,268

 

Adjustments:
Provision for tax refund advance loans losses

 

-

 

 

(18

)

 

-

 

 

(1,860

)

 

-

 

Provision (benefit) for loan losses, excluding tax refund advance loans

$

892

 

$

1,167

 

$

(29

)

$

1,008

 

$

1,268

 

 
Average loans

$

3,161,850

 

$

2,998,144

 

$

2,933,654

 

$

3,036,532

 

$

2,991,556

 

Adjustments:
Average tax refund advance loans

 

-

 

 

(3,185

)

 

-

 

 

(20,996

)

 

-

 

Average loans, excluding tax refund advance loans

$

3,161,850

 

$

2,994,959

 

$

2,933,654

 

$

3,015,536

 

$

2,991,556

 

 
Net charge-offs to average loans

 

0.02

%

 

0.04

%

 

0.01

%

 

0.04

%

 

0.12

%

Adjustments:
Effect of tax refund advance lending net charge-offs to average loans

 

0.00

%

 

(0.05

%)

 

0.00

%

 

(0.08

%)

 

0.00

%

Net (recoveries) charge-offs to average loans, excluding tax refund advance loans

 

0.02

%

 

(0.01

%)

 

0.01

%

 

(0.04

%)

 

0.12

%

 
Allowance for loan losses

$

29,866

 

$

29,153

 

$

28,000

 

$

29,866

 

$

28,000

 

 
Loans

$

3,255,906

 

$

3,082,127

 

$

2,936,148

 

$

3,255,906

 

$

2,936,148

 

Adjustments:
PPP loans

 

-

 

 

(194

)

 

(14,981

)

 

-

 

 

(14,981

)

Loans, excluding PPP loans

$

3,255,906

 

$

3,081,933

 

$

2,921,167

 

$

3,255,906

 

$

2,921,167

 

 
Allowance for loan losses to loans

 

0.92

%

 

0.95

%

 

0.95

%

 

0.92

%

 

0.95

%

Effect of PPP loans

 

0.00

%

 

0.00

%

 

0.01

%

 

0.00

%

 

0.01

%

Allowance for loan losses to loans, excluding PPP loans

 

0.92

%

 

0.95

%

 

0.96

%

 

0.92

%

 

0.96

%

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,

2022

 

2022

 

2021

 

2022

 

2021

Noninterest expense - GAAP

$

17,995

 

$

17,985

 

$

14,451

 

$

54,760

 

$

44,843

 

Adjustments:
Acquisition-related expenses

 

-

 

 

(103

)

 

-

 

 

(273

)

 

-

 

Write-down of software

 

(125

)

 

-

 

 

-

 

 

(125

)

 

-

 

Nonrecurring consulting fee

 

-

 

 

-

 

 

-

 

 

(875

)

 

-

 

Discretionary inflation bonus

 

-

 

 

(531

)

 

-

 

 

(531

)

 

-

 

Accelerated equity compensation

 

-

 

 

(289

)

 

-

 

 

(289

)

 

-

 

Adjusted noninterest expense

$

17,870

 

$

17,062

 

$

14,451

 

$

52,667

 

$

44,843

 

 
Income before income taxes - GAAP

$

9,423

 

$

10,824

 

$

14,310

 

$

33,246

 

$

42,090

 

Adjustments:
Gain on sale of premises and equipment

 

-

 

 

-

 

 

-

 

 

-

 

 

(2,523

)

Acquisition-related expenses

 

-

 

 

103

 

 

-

 

 

273

 

 

-

 

Write-down of software

 

125

 

 

-

 

 

-

 

 

125

 

 

-

 

Subordinated debt redemption cost

 

-

 

 

-

 

 

810

 

 

-

 

 

810

 

Nonrecurring consulting fee

 

-

 

 

-

 

 

-

 

 

875

 

 

-

 

Discretionary inflation bonus

 

-

 

 

531

 

 

-

 

 

531

 

 

-

 

Accelerated equity compensation

 

-

 

 

289

 

 

-

 

 

289

 

 

-

 

Adjusted income before income taxes

$

9,548

 

$

11,747

 

$

15,120

 

$

35,339

 

$

40,377

 

 
Income tax provision - GAAP

$

987

 

$

1,279

 

$

2,220

 

$

4,056

 

$

6,454

 

Adjustments:1
Gain on sale of premises and equipment

 

-

 

 

-

 

 

-

 

 

-

 

 

(530

)

Acquisition-related expenses

 

-

 

 

21

 

 

-

 

 

57

 

 

-

 

Write-down of software

 

26

 

 

-

 

 

-

 

 

26

 

 

-

 

Subordinated debt redemption cost

 

-

 

 

-

 

 

170

 

 

-

 

 

170

 

Nonrecurring consulting fee

 

-

 

 

-

 

 

-

 

 

184

 

 

-

 

Discretionary inflation bonus

 

-

 

 

112

 

 

-

 

 

112

 

 

-

 

Accelerated equity compensation

 

-

 

 

61

 

 

-

 

 

61

 

 

-

 

Adjusted income tax provision

$

1,013

 

$

1,473

 

$

2,390

 

$

4,496

 

$

6,094

 

 
Net income - GAAP

$

8,436

 

$

9,545

 

$

12,090

 

$

29,190

 

$

35,636

 

Adjustments:
Gain on sale of premises and equipment

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,993

)

Acquisition-related expenses

 

-

 

 

82

 

 

-

 

 

216

 

 

-

 

Write-down of software

 

99

 

 

-

 

 

-

 

 

99

 

 

-

 

Subordinated debt redemption cost

 

-

 

 

-

 

 

640

 

 

-

 

 

640

 

Nonrecurring consulting fee

 

-

 

 

-

 

 

-

 

 

691

 

 

-

 

Discretionary inflation bonus

 

-

 

 

419

 

 

-

 

 

419

 

 

-

 

Accelerated equity compensation

 

-

 

 

228

 

 

-

 

 

228

 

 

-

 

Adjusted net income

$

8,535

 

$

10,274

 

$

12,730

 

$

30,843

 

$

34,283

 

 
Diluted average common shares outstanding

 

9,525,855

 

 

9,658,689

 

 

9,988,102

 

 

9,681,742

 

 

9,974,071

 

 
Diluted earnings per share - GAAP

$

0.89

 

$

0.99

 

$

1.21

 

$

3.01

 

$

3.57

 

Adjustments:
Effect of gain on sale of premises and equipment

 

-

 

 

-

 

 

-

 

 

-

 

 

(0.19

)

Effect of acquisition-related expenses

 

-

 

 

0.01

 

 

-

 

 

0.02

 

 

-

 

Effect of write-down of software

 

0.01

 

 

-

 

 

-

 

 

0.01

 

 

-

 

Effect of nonrecurring consulting fee

 

-

 

 

-

 

 

-

 

 

0.07

 

 

-

 

Effect of subordinated debt redemption cost

 

-

 

 

-

 

 

0.06

 

 

-

 

 

0.06

 

Effect of discretionary inflation bonus

 

-

 

 

0.04

 

 

-

 

 

0.04

 

 

-

 

Effect of accelerated equity compensation

 

-

 

 

0.02

 

 

-

 

 

0.02

 

 

-

 

Adjusted diluted earnings per share

$

0.90

 

$

1.06

 

$

1.27

 

$

3.17

 

$

3.44

 

 
Return on average assets

 

0.82

%

 

0.93

%

 

1.12

%

 

0.94

%

 

1.13

%

Effect of gain on sale of premises and equipment

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

(0.06

%)

Effect of acquisition-related expenses

 

0.00

%

 

0.01

%

 

0.00

%

 

0.01

%

 

0.00

%

Effect of write-down of software

 

0.01

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

Effect of nonrecurring consulting fee

 

0.00

%

 

0.00

%

 

0.00

%

 

0.02

%

 

0.00

%

Effect of subordinated debt redemption cost

 

0.00

%

 

0.00

%

 

0.06

%

 

0.00

%

 

0.02

%

Effect of discretionary inflation bonus

 

0.00

%

 

0.04

%

 

0.00

%

 

0.01

%

 

0.00

%

Effect of accelerated equity compensation

 

0.00

%

 

0.02

%

 

0.00

%

 

0.01

%

 

0.00

%

Adjusted return on average assets

 

0.83

%

 

1.00

%

 

1.18

%

 

0.99

%

 

1.09

%

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,

2022

 

2022

 

2021

 

2022

 

2021

 
Return on average shareholders' equity

 

9.01

%

 

10.23

%

 

13.10

%

 

10.40

%

 

13.54

%

Effect of gain on sale of premises and equipment

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

(0.75

%)

Effect of acquisition-related expenses

 

0.00

%

 

0.09

%

 

0.00

%

 

0.08

%

 

0.00

%

Effect of write-down of software

 

0.11

%

 

0.00

%

 

0.00

%

 

0.04

%

 

0.00

%

Effect of nonrecurring consulting fee

 

0.00

%

 

0.00

%

 

0.00

%

 

0.25

%

 

0.00

%

Effect of subordinated debt redemption cost

 

0.00

%

 

0.00

%

 

0.69

%

 

0.00

%

 

0.24

%

Effect of discretionary inflation bonus

 

0.00

%

 

0.45

%

 

0.00

%

 

0.15

%

 

0.00

%

Effect of accelerated equity compensation

 

0.00

%

 

0.24

%

 

0.00

%

 

0.08

%

 

0.00

%

Adjusted return on average shareholders' equity

 

9.12

%

 

11.01

%

 

13.79

%

 

11.00

%

 

13.03

%

 
Return on average tangible common equity

 

9.13

%

 

10.36

%

 

13.27

%

 

10.53

%

 

13.73

%

Effect of gain on sale of premises and equipment

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

(0.77

%)

Effect of acquisition-related expenses

 

0.00

%

 

0.09

%

 

0.00

%

 

0.08

%

 

0.00

%

Effect of write-down of software

 

0.11

%

 

0.00

%

 

0.00

%

 

0.04

%

 

0.00

%

Effect of nonrecurring consulting fee

 

0.00

%

 

0.00

%

 

0.00

%

 

0.25

%

 

0.00

%

Effect of subordinated debt redemption cost

 

0.00

%

 

0.00

%

 

0.70

%

 

0.00

%

 

0.25

%

Effect of discretionary inflation bonus

 

0.00

%

 

0.45

%

 

0.00

%

 

0.15

%

 

0.00

%

Effect of accelerated equity compensation

 

0.00

%

 

0.25

%

 

0.00

%

 

0.08

%

 

0.00

%

Adjusted return on average tangible common equity

 

9.24

%

 

11.15

%

 

13.97

%

 

11.13

%

 

13.21

%

 
Effective income tax rate

 

10.5

%

 

11.8

%

 

15.5

%

 

12.2

%

 

15.3

%

Effect of gain on sale of premises and equipment

 

0.0

%

 

0.0

%

 

0.0

%

 

0.0

%

 

(0.6

%)

Effect of acquisition-related expenses

 

0.0

%

 

0.2

%

 

0.0

%

 

0.2

%

 

0.0

%

Effect of write-down of software

 

0.3

%

 

0.0

%

 

0.0

%

 

0.1

%

 

0.0

%

Effect of nonrecurring consulting fee

 

0.0

%

 

0.0

%

 

0.0

%

 

0.5

%

 

0.0

%

Effect of subordinated debt redemption cost

 

0.0

%

 

0.0

%

 

0.3

%

 

0.0

%

 

0.4

%

Effect of discretionary inflation bonus

 

0.0

%

 

1.0

%

 

0.0

%

 

0.3

%

 

0.0

%

Effect of accelerated equity compensation

 

0.0

%

 

0.6

%

 

0.0

%

 

0.2

%

 

0.0

%

Adjusted effective income tax rate

 

10.8

%

 

13.6

%

 

15.8

%

 

13.5

%

 

15.1

%

 
Income before income taxes - GAAP

$

9,423

 

$

10,824

 

$

14,310

 

$

33,246

 

$

42,090

 

Adjustments:
Income from tax refund advance lending

 

-

 

 

(149

)

 

-

 

 

(3,013

)

 

-

 

Provision for tax refund advance lending losses

 

-

 

 

18

 

 

-

 

 

1,860

 

 

-

 

Tax refund advance lending servicing fee

 

-

 

 

9

 

 

-

 

 

930

 

 

-

 

Income before income taxes, excluding tax refund advance loans

$

9,423

 

$

10,702

 

$

14,310

 

$

33,023

 

$

42,090

 

 
Income tax provision - GAAP

$

987

 

$

1,279

 

$

2,220

 

$

4,056

 

$

6,454

 

Adjustments:1
Income from tax refund advance lending

 

-

 

 

(31

)

 

-

 

 

(633

)

 

-

 

Provision for tax refund advance lending losses

 

-

 

 

4

 

 

-

 

 

391

 

 

-

 

Tax refund advance lending servicing fee

 

-

 

 

2

 

 

-

 

 

195

 

 

-

 

Income tax provision, excluding tax refund advance loans

$

987

 

$

1,254

 

$

2,220

 

$

4,009

 

$

6,454

 

 
Net income - GAAP

$

8,436

 

$

9,545

 

$

12,090

 

$

29,190

 

$

35,636

 

Adjustments:
Income from tax refund advance lending

 

-

 

 

(118

)

 

-

 

 

(2,380

)

 

-

 

Provision for tax refund advance lending losses

 

-

 

 

14

 

 

-

 

 

1,469

 

 

-

 

Tax refund advance lending servicing fee

 

-

 

 

7

 

 

-

 

 

735

 

 

-

 

Net income, excluding tax refund advance loans

$

8,436

 

$

9,448

 

$

12,090

 

$

29,014

 

$

35,636

 

1 Assuming a 21% tax rate

 

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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