Market Overview

First Internet Bancorp Reports Annual Net Income Up 35%

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FISHERS, Ind.--(BUSINESS WIRE)--

First Internet Bancorp (the "Company") (NASDAQ: INBK), the parent company of First Internet Bank (www.firstib.com), announced today record quarterly net income and diluted earnings per share for the fourth quarter and record annual net income and diluted earnings per share for the twelve month period ended December 31, 2016.

"Growing our loans by 31% in one year is evidence our teams deliver high caliber performances and work in concert with one another. Our loan growth fueled a continued increase in interest income, and we had a strong finish to 2016: fourth quarter results represent our best period of the year – and in our seventeen-year history. Our consistent execution gives us confidence in our asset-generating capabilities as we move into 2017," said David Becker, Chairman, President and Chief Executive Officer.

"Throughout the year, we've worked to communicate our differentiated model and value proposition to the market. In 2016, we strengthened our capital base and our balance sheet is well-positioned to support continued growth. We are very pleased to post these results to the investors who have cheered for our sustained success," Becker concluded.

Fourth quarter net income was a record $3.7 million and diluted earnings per share were a record $0.64. This compares with third quarter net income of $3.1 million and diluted earnings per share of $0.55 and fourth quarter 2015 net income of $2.3 million and diluted earnings per share of $0.50. For the twelve month period ended December 31, 2016, net income was a record $12.1 million and diluted earnings per share were a record $2.30 compared to net income of $8.9 million and diluted earnings per share of $1.96 for the twelve month period ended December 31, 2015.

Highlights for the fourth quarter 2016 include:

  • Diluted earnings per share of $0.64, increasing $0.09, or 16.4%, compared to the linked quarter and increasing $0.14, or 28.0%, compared to the fourth quarter 2015
  • Improved quarterly performance
    • Return on average assets of 0.81%
    • Return on average shareholders' equity of 10.85%
    • Return on average tangible common equity of 11.24%
  • Total loan growth of $51.9 million, or 4.3%, compared to September 30, 2016 and $296.9 million, or 31.1%, compared to December 31, 2015
  • Net interest income of $10.9 million, increasing $0.6 million, or 5.5%, compared to the linked quarter and $2.3 million, or 27.3%, compared to the fourth quarter 2015
  • Enhanced capital levels following an equity offering
    • Tangible common equity to tangible assets of 8.07%
    • Tier 1 leverage ratio of 8.65%
    • Common equity tier 1 capital ratio of 11.54%
    • Tier 1 capital ratio of 11.54%
    • Total risk-based capital ratio of 15.01%
  • Strong asset quality
    • Nonperforming loans to total loans of 0.09% as of December 31, 2016
    • Net recoveries to average loans of 0.05%

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter was $10.9 million compared to $10.3 million for the third quarter and $8.6 million for the fourth quarter 2015. Total interest income for the fourth quarter was $16.8 million, increasing $1.3 million, or 8.4%, compared to the third quarter and $5.2 million, or 44.6%, compared to the fourth quarter 2015. The increase in total interest income compared to the linked quarter was driven by a $64.2 million, or 5.6%, increase in average loan balances and a $21.9 million, or 4.8%, increase in average investment balances. The growth in average loan balances was supplemented by an increase of 15 bps in the yield earned on the loan portfolio to 4.36% for the fourth quarter from 4.21% for the third quarter. Additionally, the yield earned on the investment portfolio increased 3 bps to 2.45% for the fourth quarter from 2.42% for the third quarter. In total, the Company's yield on interest-earning assets increased 11 bps during the fourth quarter to 3.73% from 3.62% for the third quarter.

Total interest expense for the fourth quarter was $5.9 million, increasing $0.7 million, or 14.2%, compared to the third quarter and $2.8 million, or 93.7%, compared to the fourth quarter 2015. The increase in interest expense compared to the linked quarter was due primarily to the cost of the subordinated debt issued late in the third quarter. Additionally, average interest-bearing deposit balances increased $60.3 million, or 4.3%, compared to the linked quarter with the related cost of funds increasing 3 bps from 1.25% in the third quarter to 1.28% in the fourth quarter. The average interest-bearing deposit balance growth was driven by an increase in average certificates of deposit balances of $72.3 million, or 8.1%, compared to the linked quarter, partially offset by a decline in average money market account balances of $8.9 million, or 2.4%, due primarily to seasonal factors. Overall, the total cost of interest-bearing liabilities increased 10 bps during the fourth quarter to 1.41% from 1.31% for the third quarter.

Net interest margin was 2.42% for the fourth quarter, consistent with the third quarter and compared to 2.85% for the fourth quarter 2015.

Noninterest Income

Noninterest income for the fourth quarter was $2.9 million compared to $4.9 million for the third quarter and $2.1 million for the fourth quarter 2015. The decrease of $2.0 million, or 41.0%, compared to the linked quarter was driven by a decrease of $2.0 million, or 45.8%, in mortgage banking revenue due to declines in mortgage originations and sales as well as lower gain on sale margins.

Noninterest Expense

Noninterest expense for the fourth quarter was $8.2 million compared to $8.4 million for the third quarter and $6.5 million for the fourth quarter 2015. The decrease of $0.3 million, or 3.0%, compared to the linked quarter was due primarily to lower consulting and professional fees.

Income Taxes

Income tax expense was $1.7 million for the fourth quarter, resulting in an effective tax rate of 31.1%, compared to $1.5 million and an effective tax rate of 32.9% for the linked quarter and $1.2 million and an effective tax rate of 34.4% for the fourth quarter 2015.

Loans and Credit Quality

Total loans as of December 31, 2016 were $1.3 billion, increasing $51.9 million, or 4.3%, compared to September 30, 2016 and $296.9 million, or 31.1%, compared to December 31, 2015. Total commercial loan balances were $833.1 million as of December 31, 2016, increasing $39.2 million, or 4.9%, compared to September 30, 2016 and $250.3 million, or 42.9%, compared to December 31, 2015. The growth in commercial loan balances was due primarily to production in single tenant lease financing as balances increased $34.6 million, or 6.0%, compared to September 30, 2016 and $232.2 million, or 62.0%, compared to December 31, 2015. Commercial and industrial and owner-occupied commercial real estate balances increased $7.3 million on a combined basis, or 4.8%, compared to September 30, 2016 and $13.6 million, or 9.3%, compared to December 31, 2015. Construction balances decreased $3.1 million, or 5.5%, compared to September 30, 2016 but increased $7.4 million, or 16.1%, compared to December 31, 2015.

Total consumer loan balances were $414.0 million as of December 31, 2016, increasing $12.1 million, or 3.0%, compared to September 30, 2016 and $47.9 million, or 13.1%, compared to December 31, 2015. Residential mortgage balances increased $4.7 million, or 2.3%, compared to September 30, 2016, due primarily to adjustable rate originations, but decreased $9.0 million, or 4.2%, compared to December 31, 2015. Other consumer loan balances increased $4.4 million, or 12.5%, compared to September 30, 2016 and $37.5 million, or 1,570.7%, compared to December 31, 2015, due mainly to the Company's recent initiative in financing home improvement loans. Recreational vehicle balances increased $3.1 million, or 6.2%, compared to September 30, 2016 and $13.8 million, or 35.6%, compared to December 31, 2015. Additionally, trailer portfolio balances increased $2.8 million, or 3.5%, compared to September 30, 2016 and $13.9 million, or 20.6%, compared to December 31, 2015.

Credit quality continued to remain strong as total delinquencies 30 days or more past due were 0.13% of total loans as of December 31, 2016, consistent with September 30, 2016 and up from 0.06% as of December 31, 2015. Nonperforming loans to total loans was 0.09% as of December 31, 2016, consistent with September 30, 2016 and up from 0.02% as of December 31, 2015. Nonperforming assets to total assets was 0.31% as of December 31, 2016, consistent with September 30, 2016 and down from 0.37% as of December 31, 2015.

The allowance for loan losses was $11.0 million as of December 31, 2016 compared to $10.6 million as of September 30, 2016 and $8.4 million as of December 31, 2015. The allowance as a percentage of total nonperforming loans increased to 1,013.9% as of December 31, 2016 from 932.1% as of September 30, 2016 but decreased from 5,000.6% as of December 31, 2015. The allowance as a percentage of total loans was 0.88% as of December 31, 2016, which was consistent with both September 30, 2016 and December 31, 2015.

Net recoveries of $0.2 million were recognized during the fourth quarter, resulting in net recoveries to average loans of 0.05% compared to net charge-offs to average loans of 0.57% for the third quarter and 0.03% for the fourth quarter 2015. During the third quarter, the Company charged-off the full balance of a commercial and industrial loan it placed on nonaccrual status during the second quarter. Prior to the charge-off, the outstanding balance of the loan was $1.6 million and an associated specific allowance was $0.5 million. Net recoveries in the fourth quarter were due primarily to approximately $0.2 million of recoveries related to this credit. The provision for loan losses in the fourth quarter was $0.3 million compared to $2.2 million for the third quarter and $0.7 million for the fourth quarter 2015. The provision in the third quarter includes $1.1 million related to the charged-off loan discussed above.

Capital

During the fourth quarter, total shareholders' equity increased $16.8 million, due primarily to an underwritten offering of 945,000 shares of common stock that resulted in approximately $23.5 million of net proceeds to the Company. Net income earned during the quarter also contributed to the total increase in shareholders' equity. These were partially offset by the change in the unrealized gain/loss related to the investment portfolio classified as available-for-sale and reported at fair value, which reduced shareholders' equity by $10.2 million as the rapid increase in interest rates during the quarter negatively impacted the market value of that portfolio.

As of December 31, 2016, the Company's tier 1 leverage, common equity tier 1, tier 1 and total risk-based capital ratios were 8.65%, 11.54%, 11.54% and 15.01% compared to 7.62%, 10.07%, 10.07% and 13.67% as of September 30, 2016, respectively. The increases in regulatory capital ratios were primarily due to the common stock offering, partially offset by continued average asset and risk-weighted asset growth. Tangible common equity to tangible assets increased 79 bps during the fourth quarter to 8.07%, primarily due to the common stock offering but partially offset by the change in the unrealized gain/loss related to securities available-for-sale and continued balance sheet growth. Tangible book value per share decreased to $23.04 as of December 31, 2016 from $23.94 as of September 30, 2016 but increased from $22.24 as of December 31, 2015.

About First Internet Bancorp

First Internet Bancorp is a bank holding company with assets of $1.9 billion as of December 31, 2016. 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 now 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 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.

Safe Harbor Statement

This press release may contain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" 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. Factors that may cause such differences include: failures 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 and commercial and industrial 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, return on average tangible common equity and tangible common equity to tangible assets are used by the Company's management to measure the strength of its capital and its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures provide 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)
Amounts in thousands, except per share data
                           
 
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016   2015
 
Net income $ 3,710 $ 3,098 $ 2,278 $ 12,074 $ 8,929
 
Per share and share information
Earnings per share - basic $ 0.65 $ 0.55 $ 0.50 $ 2.32 $ 1.97
Earnings per share - diluted 0.64 0.55 0.50 2.30 1.96
Dividends declared per share 0.06 0.06 0.06 0.24 0.24
Book value per common share 23.76 24.79 23.28 23.76 23.28
Tangible book value per common share 23.04 23.94 22.24 23.04 22.24
Common shares outstanding 6,478,050 5,533,050 4,481,347 6,478,050 4,481,347
Average common shares outstanding:
Basic 5,722,615 5,597,867 4,534,910 5,211,209 4,528,528
Diluted 5,761,931 5,622,181 4,580,353 5,239,082 4,554,219
Performance ratios
Return on average assets 0.81 % 0.71 % 0.74 % 0.74 % 0.81 %
Return on average shareholders' equity 10.85 % 9.08 % 8.73 % 9.74 % 8.89 %
Return on average tangible common equity 11.24 % 9.41 % 9.14 % 10.12 % 9.33 %
Net interest margin 2.42 % 2.42 %

 

2.85 % 2.49 % 2.85 %
Capital ratios 1
Tangible common equity to tangible assets 8.07 % 7.28 % 7.88 % 8.07 % 7.88 %
Tier 1 leverage ratio 8.65 % 7.62 % 8.28 % 8.65 % 8.28 %
Common equity tier 1 capital ratio

11.54

%

10.07 % 10.11 %

11.54

%

10.11 %
Tier 1 capital ratio

11.54

%

10.07 % 10.11 %

11.54

%

10.11 %
Total risk-based capital ratio

15.01

%

13.67 % 12.25 %

15.01

%

12.25 %
Asset quality
Nonperforming loans $ 1,083 $ 1,133 $ 167 $ 1,083 $ 167
Nonperforming assets 5,701 5,735 4,740 5,701 4,740
Nonperforming loans to loans 0.09 % 0.09 % 0.02 % 0.09 % 0.02 %
Nonperforming assets to total assets 0.31 % 0.31 % 0.37 % 0.31 % 0.37 %
Allowance for loan losses to:
Loans 0.88 % 0.88 % 0.88 % 0.88 % 0.88 %
Nonperforming loans 1,013.9 % 932.1 % 5,000.6 % 1,013.9 % 5,000.6 %

Net charge-offs (recoveries) to average loans

(0.05 %) 0.57 % 0.03 % 0.15 % (0.07 %)
Average balance sheet information
Loans $ 1,219,966 $ 1,155,749 $ 912,233 $ 1,110,483 $ 820,741
Total securities 479,330 457,407 207,848 380,560 181,845
Other earning assets 57,081 51,779 41,274 71,140 42,375
Total interest-earning assets 1,790,167 1,702,002 1,191,923 1,596,387 1,078,216
Total assets 1,831,549 1,734,943 1,221,517 1,629,800 1,107,222
Noninterest-bearing deposits 30,336 32,897 25,198 28,472 22,866
Interest-bearing deposits 1,445,737 1,385,487 916,006 1,288,031 839,353
Total deposits 1,476,073 1,418,384 941,204 1,316,503 862,219
Shareholders' equity 135,974 135,666 103,583 124,023 100,428

1 Regulatory capital ratios are preliminary pending filing of the Company's regulatory reports

             
First Internet Bancorp
Condensed Consolidated Balance Sheets (unaudited, except for December 31, 2015)
Amounts in thousands
   
 
December 31, September 30, December 31,
2016 2016 2015
 
Assets
Cash and due from banks $ 2,282 $ 2,314 $ 1,063
Interest-bearing demand deposits 37,170 65,511 24,089
Interest-bearing time deposits 250 250 1,000
Securities available-for-sale, at fair value 456,700 470,978 213,698
Securities held-to-maturity, at amortized cost 16,671 5,500 -
Loans held-for-sale 27,101 32,471 36,518
Loans 1,250,789 1,198,932 953,859
Allowance for loan losses   (10,981 )   (10,561 )   (8,351 )
Net loans 1,239,808 1,188,371 945,508
Accrued interest receivable 6,708 5,848 4,105
Federal Home Loan Bank of Indianapolis stock 8,910 8,595 8,595
Cash surrender value of bank-owned life insurance 24,195 18,044 12,727
Premises and equipment, net 10,044 10,116 8,521
Goodwill 4,687 4,687 4,687
Other real estate owned 4,533 4,533 4,488
Accrued income and other assets   15,276     6,978     4,871  
Total assets $ 1,854,335   $ 1,824,196   $ 1,269,870  
 
Liabilities
Noninterest-bearing deposits $ 31,166 $ 32,938 $ 23,700
Interest-bearing deposits   1,431,701     1,460,663     932,354  
Total deposits 1,462,867 1,493,601 956,054
Advances from Federal Home Loan Bank 189,981 147,978 190,957
Subordinated debt 36,578 36,541 12,724
Accrued interest payable 112 125 117
Accrued expenses and other liabilities   10,855     8,797     5,688  
Total liabilities   1,700,393     1,687,042     1,165,540  
Shareholders' equity
Voting common stock 119,506 95,839 72,559
Retained earnings 43,704 40,389 32,980
Accumulated other comprehensive income (loss)   (9,268 )   926     (1,209 )
Total shareholders' equity   153,942     137,154     104,330  
Total liabilities and shareholders' equity $ 1,854,335   $ 1,824,196   $ 1,269,870  
 
         
First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited, except for the twelve months ended December 31, 2015)
Amounts in thousands, except per share data
     
 
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
 
Interest income
Loans $ 13,660 $ 12,544 $ 10,290 $ 49,054 $ 37,049
Securities - taxable 2,262 2,148 1,067 7,326 3,728
Securities - non-taxable 686 637 137 1,856 312
Other earning assets   156     142   100   663     358  
Total interest income   16,764     15,471   11,594   58,899     41,447  
Interest expense
Deposits 4,667 4,368 2,405 15,853 8,755
Other borrowed funds   1,193     765   621   3,357     1,939  
Total interest expense   5,860     5,133   3,026   19,210     10,694  
Net interest income 10,904 10,338 8,568 39,689 30,753
Provision for loan losses   256     2,204   746   4,330     1,946  

Net interest income after provision for loan losses

  10,648     8,134   7,822   35,359     28,807  
Noninterest income
Service charges and fees 196 207 193 818 764
Mortgage banking activities 2,407 4,442 1,805 12,398 9,000
Gain on sale of securities - - - 177 -
Gain (loss) on asset disposals (4 ) 5 40 (63 ) (34 )
Other   292     244   105   747     411  
Total noninterest income   2,891     4,898   2,143   14,077     10,141  
Noninterest expense
Salaries and employee benefits 4,610 4,550 3,460 17,387 14,271
Marketing, advertising and promotion 471 454 426 1,823 1,756
Consulting and professional fees 709 901 674 3,143 2,374
Data processing 292 286 287 1,127 1,016
Loan expenses 267 240 172 891 631
Premises and equipment 955 983 759 3,699 2,768
Deposit insurance premium 344 420 170 1,159 643
Other   510     579   544   2,222     1,824  
Total noninterest expense   8,158     8,413   6,492   31,451     25,283  
Income before income taxes 5,381 4,619 3,473 17,985 13,665
Income tax provision   1,671     1,521   1,195   5,911     4,736  
Net income $ 3,710   $ 3,098 $ 2,278 $ 12,074   $ 8,929  
 
Per common share data
Earnings per share - basic $ 0.65 $ 0.55 $ 0.50 $ 2.32 $ 1.97
Earnings per share - diluted $ 0.64 $ 0.55 $ 0.50 $ 2.30 $ 1.96
Dividends declared per share $ 0.06 $ 0.06 $ 0.06 $ 0.24 $ 0.24
 

All periods presented have been reclassified to conform to the current period classification.

                                     
First Internet Bancorp
Average Balances and Rates (unaudited)
Amounts in thousands
     
 
Three Months Ended
December 31, 2016 September 30, 2016 December 31, 2015
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 $ 1,253,756 $ 13,660 4.33% $ 1,192,816 $ 12,544 4.18% $ 942,801 $ 10,290 4.33%
Securities - taxable 384,286 2,262 2.34% 366,810 2,148 2.33% 189,447 1,067 2.23%
Securities - non-taxable 95,044 686 2.87% 90,597 637 2.80% 18,401 137 2.95%
Other earning assets   57,081   156 1.09%   51,779   142 1.09%   41,274   100 0.96%
Total interest-earning assets 1,790,167 16,764 3.73% 1,702,002 15,471 3.62% 1,191,923 11,594 3.86%
 
Allowance for loan losses (10,711) (10,378) (7,947)
Noninterest-earning assets   52,093   43,319   37,541
Total assets $ 1,831,549 $ 1,734,943 $ 1,221,517
 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits $ 83,930 $ 116 0.55% $ 81,151 $ 112 0.55% $ 77,096 $ 107 0.55%
Regular savings accounts 28,157 41 0.58% 27,479 40 0.58% 26,239 38 0.57%
Money market accounts 360,166 648 0.72% 369,082 658 0.71% 345,337 608 0.70%
Certificates and brokered deposits   973,484   3,862 1.58%   907,775   3,558 1.56%   467,334   1,652 1.40%
Total interest-bearing deposits 1,445,737 4,667 1.28% 1,385,487 4,368 1.25% 916,006 2,405 1.04%
Other borrowed funds   213,109   1,193 2.23%   173,568   765 1.75%   171,169   621 1.44%
Total interest-bearing liabilities 1,658,846 5,860 1.41% 1,559,055 5,133 1.31% 1,087,175 3,026 1.10%
 
Noninterest-bearing deposits 30,336 32,897 25,198
Other noninterest-bearing liabilities   6,393   7,325   5,561
Total liabilities 1,695,575 1,599,277 1,117,934
 
Shareholders' equity   135,974   135,666   103,583
Total liabilities and shareholders' equity $ 1,831,549 $ 1,734,943 $ 1,221,517
     
Net interest income $ 10,904 $ 10,338 $ 8,568
 
Interest rate spread 2.32% 2.31% 2.76%
 
Net interest margin 2.42% 2.42% 2.85%
 
                         
First Internet Bancorp
Average Balances and Rates (unaudited)
Amounts in thousands
     
 
Twelve Months Ended
December 31, 2016 December 31, 2015
Average Interest / Yield / Average Interest / Yield /
Balance Dividends Cost Balance Dividends Cost
 
Assets
Interest-earning assets
Loans, including loans held-for-sale $ 1,144,687 $ 49,054 4.29% $ 853,996 $ 37,049 4.34%
Securities - taxable 315,661 7,326 2.32% 171,502 3,728 2.17%
Securities - non-taxable 64,899 1,856 2.86% 10,343 312 3.02%
Other earning assets   71,140   663 0.93%   42,375   358 0.84%
Total interest-earning assets 1,596,387 58,899 3.69% 1,078,216 41,447 3.84%
 
Allowance for loan losses (9,808) (6,906)
Noninterest-earning assets   43,221   35,912
Total assets $ 1,629,800 $ 1,107,222
 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits $ 82,533 $ 452 0.55% $ 76,145 $ 418 0.55%
Regular savings accounts 27,174 158 0.58% 24,442 142 0.58%
Money market accounts 360,976 2,563 0.71% 299,990 2,136 0.71%
Certificates and brokered deposits   817,348   12,680 1.55%   438,776   6,059 1.38%
Total interest-bearing deposits 1,288,031 15,853 1.23% 839,353 8,755 1.04%
Other borrowed funds   183,410   3,357 1.83%   139,695   1,939 1.39%
Total interest-bearing liabilities 1,471,441 19,210 1.31% 979,048 10,694 1.09%
 
Noninterest-bearing deposits 28,472 22,866
Other noninterest-bearing liabilities   5,864   4,880
Total liabilities 1,505,777 1,006,794
 
Shareholders' equity   124,023   100,428
Total liabilities and shareholders' equity $ 1,629,800 $ 1,107,222
   
Net interest income $ 39,689 $ 30,753
 
Interest rate spread 2.38% 2.75%
 
Net interest margin 2.49% 2.85%
 
                         
First Internet Bancorp
Loans and Deposits (unaudited)
Amounts in thousands
     
 
December 31, 2016 September 30, 2016 December 31, 2015
Amount Percent Amount Percent Amount Percent
 
Commercial loans
Commercial and industrial $ 102,437 8.2 % $ 107,250 8.9 % $ 102,000 10.7 %
Owner-occupied commercial real estate 57,668 4.6 % 45,540 3.8 % 44,462 4.7 %
Investor commercial real estate 13,181 1.0 % 12,752 1.1 % 16,184 1.7 %
Construction 53,291 4.3 % 56,391 4.7 % 45,898 4.8 %
Single tenant lease financing   606,568 48.5 %   571,972 47.7 %   374,344 39.2 %
Total commercial loans 833,145 66.6 % 793,905 66.2 % 582,888 61.1 %
 
Consumer loans
Residential mortgage 205,554 16.4 % 200,889 16.7 % 214,559 22.5 %
Home equity 35,036 2.8 % 37,849 3.2 % 43,279 4.5 %
Trailers 81,186 6.5 % 78,419 6.5 % 67,326 7.1 %
Recreational vehicles 52,350 4.2 % 49,275 4.1 % 38,597 4.0 %
Other consumer loans   39,913 3.2 %   35,464 3.0 %   2,389 0.3 %
Total consumer loans 414,039 33.1 % 401,896 33.5 % 366,150 38.4 %
 
Net deferred loan fees, premiums and discounts 3,605 0.3 % 3,131 0.3 % 4,821 0.5 %
           
Total loans $ 1,250,789 100.0 % $ 1,198,932 100.0 % $ 953,859 100.0 %
 
 
December 31, 2016 September 30, 2016 December 31, 2015
Amount Percent Amount Percent Amount Percent
 
Deposits
Noninterest-bearing deposits $ 31,166 2.1 % $ 32,938 2.2 % $ 23,700 2.5 %
Interest-bearing demand deposits 93,074 6.4 % 84,939 5.7 % 84,241 8.8 %
Regular savings accounts 27,955 1.9 % 27,661 1.8 % 22,808 2.4 %
Money market accounts 340,240 23.3 % 364,517 24.4 % 341,732 35.7 %
Certificates of deposits 964,819 65.9 % 970,684 65.0 % 470,736 49.2 %
Brokered deposits 5,613 0.4 % 12,862 0.9 % 12,837 1.4 %
           
Total deposits $ 1,462,867 100.0 % $ 1,493,601 100.0 % $ 956,054 100.0 %
 
             
First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Amounts in thousands, except per share data
 
 
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
 
Total equity - GAAP $ 153,942 $ 137,154 $ 104,330 $ 153,942 $ 104,330
Adjustments:
Goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Tangible common equity $ 149,255   $ 132,467   $ 99,643   $ 149,255   $ 99,643  
 
Total assets - GAAP $ 1,854,335 $ 1,824,196 $ 1,269,870 $ 1,854,335 $ 1,269,870
Adjustments:
Goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Tangible assets $ 1,849,648   $ 1,819,509   $ 1,265,183   $ 1,849,648   $ 1,265,183  
 
Common shares outstanding 6,478,050 5,533,050 4,481,347 6,478,050 4,481,347
 
Book value per common share $ 23.76 $ 24.79 $ 23.28 $ 23.76 $ 23.28
Effect of goodwill   (0.72 )   (0.85 )   (1.04 )   (0.72 )   (1.04 )
Tangible book value per common share $ 23.04   $ 23.94   $ 22.24   $ 23.04   $ 22.24  
 
Total shareholders' equity to assets ratio 8.30 % 7.52 % 8.22 % 8.30 % 8.22 %
Effect of goodwill   (0.23 %)   (0.24 %)   (0.34 %)   (0.23 %)   (0.34 %)
Tangible common equity to tangible assets ratio   8.07 %   7.28 %   7.88 %   8.07 %   7.88 %
 
Total average equity - GAAP $ 135,974 $ 135,666 $ 103,583 $ 124,023 $ 100,428
Adjustments:
Average goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Average tangible common equity $ 131,287   $ 130,979   $ 98,896   $ 119,336   $ 95,741  
 
Return on average shareholders' equity 10.85 % 9.08 % 8.73 % 9.74 % 8.89 %
Effect of goodwill   0.39 %   0.33 %   0.41 %   0.38 %   0.44 %

Return on average tangible common equity

  11.24 %   9.41 %   9.14 %   10.12 %   9.33 %
 

First Internet Bancorp
Investors/Analysts
Paula Deemer, 317-428-4628
Investor Relations
investors@firstib.com
or
Media
Nicole Lorch, 317-532-7906
Senior Vice President, Retail Banking
nlorch@firstib.com

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