Market Overview

First Internet Bancorp Reports Record Quarterly Diluted EPS

Share:

Record quarterly net income up 22% over prior quarter and up 58%
year-over-year

First Internet Bancorp (the "Company") (NASDAQ:INBK), the parent
company of First Internet Bank (the "Bank") (www.firstib.com),
announced today financial and operational results for the third quarter
2017.

David Becker, Chairman, President and Chief Executive Officer,
commented, "Our record quarterly net income and diluted earnings per
share are the result of our continued execution of our business. Strong
loan growth across our diverse lines of business contributed to interest
income growth.

"Even after the effects of loan sales during the quarter, the rate at
which we have successfully grown our loan portfolio is impressive – up
$618 million, or over 49%, year-to-date. Our commercial real estate and
public finance businesses performed extremely well, and we're pleased
with the early results of our recently announced relationship with
California-based Lendeavor. We remain confident in our outlook for
continued strong loan production. This optimism was the primary driver
behind the equity offering completed during the quarter, which
strengthened our capital levels and leaves us well positioned to
capitalize on further opportunities."

Third quarter net income was a record $4.9 million and diluted earnings
per share were a record $0.71. This compares with second quarter net
income of $4.0 million and diluted earnings per share of $0.61 and third
quarter 2016 net income of $3.1 million and diluted earnings per share
of $0.55.

The Company completed its first sale of portfolio mortgage loans during
the third quarter, supplementing its conventional held-for-sale mortgage
production. The sale, totaling $26.4 million in the aggregate, consisted
of jumbo fixed and adjustable rate mortgages originated during 2017. As
consumer demand remains strong for these products, the Company may
pursue additional portfolio mortgage sales in subsequent periods.
Furthermore, the Company is in the process of executing its first sale
of single tenant lease financing loans. Approximately $26.3 million of
these loans were transferred to loans held-for-sale as of September 30,
2017 in anticipation of this transaction closing during the fourth
quarter. The loan sales provide the Company an additional strategy to
manage balance sheet growth and capital while providing additional
liquidity and further diversifying revenue channels.

Highlights for the third quarter include:

  • Record diluted earnings per share of $0.71, increasing $0.10, or
    16.4%, compared to the linked quarter and $0.16, or 29.1%, compared to
    third quarter 2016
  • Total loan growth of $170.1 million, or 10.0%, compared to June 30,
    2017 and $669.6 million, or 55.8%, compared to September 30, 2016
  • Total deposit growth of $264.9 million, or 15.3% compared to June 30,
    2017 and $503.4 million, or 33.7%, compared to September 30, 2016
  • Net interest income of $14.2 million, increasing $1.2 million, or
    9.4%, compared to the linked quarter and $3.9 million, or 37.3%,
    compared to the third quarter 2016
  • Strengthened capital levels and holding company liquidity following an
    equity offering
 
      Company       Bank
 
Total shareholders' equity to assets 8.39% 8.31%
Tangible common equity to tangible assets 8.22% 8.15%
Tier 1 leverage ratio 8.86% 8.78%
Common equity tier 1 capital ratio 11.93% 11.83%
Tier 1 capital ratio 11.93% 11.83%
Total risk-based capital ratio 14.67% 12.59%
 
  • Asset quality remained strong
    • Nonperforming loans to total loans of 0.14%
    • Nonperforming assets to total assets of 0.30%

Net Interest Income and Net Interest Margin

Net interest income for the third quarter was $14.2 million compared to
$13.0 million for the second quarter and $10.3 million for the third
quarter 2016. Total interest income for the third quarter was $22.7
million, increasing $2.7 million, or 13.6%, compared to the second
quarter and $7.2 million, or 46.7%, compared to the third quarter 2016.
The increase in total interest income compared to the linked quarter was
driven primarily by a $242.7 million, or 15.6%, increase in average loan
balances, partially offset by a decline of 6 bps in the yield earned on
the loan portfolio to 4.13% in the third quarter from 4.19% for the
second quarter. The yield earned on the loan portfolio was impacted by a
decline in yields on residential mortgage loans which were partially due
to accelerated premium amortization related to prepayments of purchased
mortgages. Growth in total interest income also benefitted from
increases in both the average balance of other interest-earning assets
during the quarter as well as the yield earned on these assets. In
total, the Company's yield on interest-earning assets decreased 5 bps
during the third quarter to 3.70% from 3.75% for the second quarter.

Total interest expense for the third quarter was $8.5 million,
increasing $1.5 million, or 21.5%, compared to the second quarter and
$3.4 million, or 65.7%, compared to the third quarter 2016. The increase
in total interest expense compared to the linked quarter was due
primarily to increases of $246.6 million, or 15.5%, in average
interest-bearing deposit balances and $33.7 million, or 9.3%, in the
average balance of Federal Home Loan Bank ("FHLB") advances. Interest
expense was also impacted by the cost of funds related to
interest-bearing deposits, which increased 8 bps during the third
quarter to 1.42% from 1.34% for the second quarter. Additionally, the
cost of funds related to FHLB advances increased 12 bps to 1.28% from
1.16% for the second quarter as the Company extended the maturities on
certain borrowings while also paying down shorter term advances to
manage interest rate risk. Overall, the total cost of interest-bearing
liabilities increased 8 bps during the third quarter to 1.49% from 1.41%
for the second quarter.

Net interest margin ("NIM") was 2.31% for the third quarter compared to
2.43% for the second quarter and 2.42% for the third quarter 2016. On a
fully-taxable equivalent basis, NIM was 2.52% for the third quarter
compared to 2.53% for the second quarter and 2.47% for the third quarter
2016.

Noninterest Income

Noninterest income for the third quarter was $3.1 million compared to
$2.7 million for the second quarter and $4.9 million for the third
quarter 2016. The increase of $0.4 million, or 14.6%, compared to the
linked quarter was due primarily to an increase of $0.4 million, or
17.6%, in mortgage banking revenue. The increase in mortgage banking
revenue was driven by the sale of jumbo fixed and adjustable rate
portfolio mortgages, as discussed above, at a net gain of $0.3 million.
An increase in gain on sale margins related to mandatory commitments
also contributed to the increase in mortgage banking revenue during the
third quarter, partially offset by a decline in the dollar volume of
commitments / locks.

Noninterest Expense

Noninterest expense for the third quarter was $9.4 million compared to
$8.9 million for the second quarter and $8.4 million for the third
quarter 2016. The increase of $0.5 million, or 5.4%, compared to the
linked quarter was due primarily to higher marketing expenses and
consulting and professional fees. The increase in marketing expenses was
driven by recent digital marketing initiatives and higher mortgage lead
generation costs. The increase in consulting and professional fees was
due to legal expenses associated with the Company's strategic
partnership and pending equity investment in Lendeavor, Inc., a San
Francisco-based technology-enabled lender to healthcare practices.

Income Taxes

Income tax expense was $1.7 million for the third quarter, resulting in
an effective tax rate of 25.7%, compared to $1.5 million and an
effective tax rate of 26.8% for the linked quarter and $1.5 million and
an effective tax rate of 32.9% for the third quarter 2016. The decline
in the effective tax rate compared to the linked quarter was driven by
the increase in tax-exempt earning assets due to the strong growth in
the public finance loan portfolio.

Loans and Credit Quality

Total loans as of September 30, 2017 were $1.9 billion, increasing
$170.1 million, or 10.0%, compared to June 30, 2017 and $669.6 million,
or 55.8%, compared to September 30, 2016. Total commercial loan balances
were $1.3 billion as of September 30, 2017, increasing $161.0 million,
or 13.9%, compared to June 30, 2017 and $528.1 million, or 66.5%,
compared to September 30, 2016. The growth in commercial loan balances
was driven largely by production in public finance and single tenant
lease financing. The public finance portfolio increased $89.5 million,
or 49.7%, compared to June 30, 2017 with balances totaling $269.3
million at quarter end. Single tenant lease financing ("STL") balances
increased $36.1 million, or 4.8%, compared to June 30, 2017 and $211.9
million, or 37.1%, compared to September 30, 2016. Growth in the STL
portfolio was impacted by the transfer of $26.3 million of balances to
loans held-for-sale as of September 30, 2017 pursuant to the expected
sale of STL loans discussed above.

Commercial and industrial and owner-occupied commercial real estate
balances increased $24.1 million on a combined basis, or 13.8%, compared
to June 30, 2017 and $45.8 million, or 30.0%, compared to September 30,
2016. Healthcare finance balances, originated through the partnership
with Lendeavor, Inc., increased $9.6 million during the third quarter
and totaled $12.4 million at quarter end. Construction balances
increased $4.4 million, or 9.7%, compared to June 30, 2017 but declined
$6.0 million, or 10.7%, compared to September 30, 2016, while investor
commercial real estate balances declined compared to June 30, 2017 and
September 30, 2016.

Total consumer loan balances were $543.5 million as of September 30,
2017, increasing $8.6 million, or 1.6%, compared to June 30, 2017 and
$141.6 million, or 35.2%, compared to September 30, 2016. Residential
mortgage balances decreased $1.6 million, or 0.6%, compared to June 30,
2017 and increased $90.5 million, or 45.0%, compared to September 30,
2016. The decline compared to the linked quarter was due mainly to the
sale of portfolio mortgages discussed above as well as portfolio
amortization and early paydowns, which outweighed new production during
the quarter.

Trailer portfolio balances increased $3.8 million, or 4.0%, compared to
June 30, 2017 and $19.4 million, or 24.7%, compared to September 30,
2016. Recreational vehicle balances increased $3.1 million, or 4.9%,
compared to June 30, 2017 and $17.3 million, or 35.2%, compared to
September 30, 2016. Additionally, other consumer loan balances increased
$5.4 million, or 10.7%, compared to June 30, 2017 and $21.0 million, or
59.3%, compared to September 30, 2016, driven primarily by home
improvement lending.

Credit quality continued to remain sound as total delinquencies 30 days
or more past due declined to 0.05% of total loans as of September 30,
2017 compared to 0.12% as of June 30, 2017 and 0.13% as of September 30,
2016. Nonperforming loans to total loans was 0.14% as of September 30,
2017 compared to 0.20% as of June 30, 2017 and 0.09% as of September 30,
2016. Nonperforming assets to total assets was 0.30% as of September 30,
2017 compared to 0.33% as of June 30, 2017 and 0.31% as of September 30,
2016.

The allowance for loan losses was $14.1 million as of September 30, 2017
compared to $13.2 million as of June 30, 2017 and $10.6 million as of
September 30, 2016. The allowance as a percentage of total nonperforming
loans was 529.2% as of September 30, 2017 compared to 383.8% as of June
30, 2017 and 932.1% as of September 30, 2016. The allowance as a
percentage of total loans was 0.75% as of September 30, 2017 compared to
0.78% as of June 30, 2017 and 0.88% as of September 30, 2016. The
decline in the allowance as a percentage of total loans was due
primarily to the growth in the public finance portfolio as this loan
category has a lower loss reserve factor than all other loan types.

Net charge-offs of $0.4 million were recognized during the third
quarter, resulting in net charge-offs to average loans of 0.10% compared
to 0.01% for the second quarter and 0.57% for the third quarter 2016.
The increase in net charge-offs compared to the linked quarter was
driven primarily by charge-offs of $0.2 million related to a commercial
and industrial loan and $0.1 million related to a residential mortgage
loan that was reclassified to other real estate owned. The provision for
loan losses in the third quarter was $1.3 million compared to $1.3
million for the second quarter and $2.2 million for the third quarter
2016.

Capital

During the third quarter, total shareholders' equity increased $57.0
million, due primarily to an underwritten public offering of 1,897,500
shares of common stock that resulted in approximately $51.6 million of
net proceeds to the Company. Net income earned during the quarter and
the change in unrealized gain/loss related to the investment portfolio
also contributed to the increase in total shareholders' equity,
partially offset by declared dividends. As of September 30, 2017, the
Company's tier 1 leverage, common equity tier 1, tier 1 and total
risk-based capital ratios were 8.86%, 11.93%, 11.93% and 14.67% compared
to 7.50%, 9.74%, 9.74% and 12.68% as of June 30, 2017, respectively. The
increases in regulatory capital ratios were due primarily to the common
stock offering, partially offset by continued average asset and
risk-weighted asset growth. Tangible common equity to tangible assets
increased 152 bps during the third quarter to 8.22% as of September 30,
2017 due primarily to the common stock offering, partially offset by
continued strong balance sheet growth. Tangible book value per share
increased to $25.70 as of September 30, 2017 from $24.43 as of June 30,
2017 and $23.94 as of September 30, 2016.

About First Internet Bancorp

First Internet Bancorp is a bank holding company with assets of $2.6
billion as of September 30, 2017. 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,
commercial and industrial, and public 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,
return on average tangible common equity and tangible common equity to
tangible assets, net interest income – FTE and net interest margin – FTE
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 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 Nine Months Ended
 
September 30, June 30, September 30, September 30, September 30,
2017 2017 2016 2017 2016
 
Net income $ 4,895 $ 4,001 $ 3,098 $ 11,728 $ 8,364
 
Per share and share information
Earnings per share - basic $ 0.72 $ 0.61 $ 0.55 $ 1.76 $ 1.66
Earnings per share - diluted 0.71 0.61 0.55 1.75 1.65
Dividends declared per share 0.06 0.06 0.06 0.18 0.18
Book value per common share 26.26 25.15 24.79 26.26 24.79
Tangible book value per common share 25.70 24.43 23.94 25.70 23.94
Common shares outstanding 8,411,077 6,513,577 5,533,050 8,411,077 5,533,050
Average common shares outstanding:
Basic 6,834,011 6,583,515 5,597,867 6,656,160 5,039,497
Diluted 6,854,614 6,597,991 5,622,181 6,683,379 5,063,299
Performance ratios
Return on average assets 0.78 % 0.73 % 0.71 % 0.71 % 0.72 %
Return on average shareholders' equity 11.20 % 9.95 % 9.08 % 9.61 % 9.31 %
Return on average tangible common equity 11.51 % 10.25 % 9.41 % 9.89 % 9.69 %
Net interest margin 2.31 % 2.43 % 2.42 % 2.41 % 2.51 %
Net interest margin - FTE 1 2.52 % 2.53 % 2.47 % 2.57 % 2.57 %
Capital ratios 2
Total shareholders' equity to assets 8.39 % 6.88 % 7.52 % 8.39 % 7.52 %
Tangible common equity to tangible assets 8.22 % 6.70 % 7.28 % 8.22 % 7.28 %
Tier 1 leverage ratio 8.86 % 7.50 % 7.62 % 8.86 % 7.62 %
Common equity tier 1 capital ratio 11.93 % 9.74 % 10.07 % 11.93 % 10.07 %
Tier 1 capital ratio 11.93 % 9.74 % 10.07 % 11.93 % 10.07 %
Total risk-based capital ratio 14.67 % 12.68 % 13.67 % 14.67 % 13.67 %
Asset quality
Nonperforming loans $ 2,662 $ 3,438 $ 1,133 $ 2,662 $ 1,133
Nonperforming assets 7,855 7,952 5,735 7,855 5,735
Nonperforming loans to loans 0.14 % 0.20 % 0.09 % 0.14 % 0.09 %
Nonperforming assets to total assets 0.30 % 0.33 % 0.31 % 0.30 % 0.31 %
Allowance for loan losses to:
Loans 0.75 % 0.78 % 0.88 % 0.75 % 0.88 %
Nonperforming loans 529.2 % 383.8 % 932.1 % 529.2 % 932.1 %
Net charge-offs to average
loans 0.10 % 0.01 % 0.57 % 0.05 % 0.23 %
Average balance sheet information
Loans $ 1,795,118 $ 1,552,456 $ 1,155,749 $ 1,557,620 $ 1,073,722
Total securities 507,873 500,816 457,407 494,632 347,397
Other earning assets 108,547 67,989 51,779 74,208 75,860
Total interest-earning assets 2,434,799 2,139,040 1,702,002 2,146,366 1,531,323
Total assets 2,492,751 2,194,652 1,734,943 2,199,864 1,562,059
Noninterest-bearing deposits 35,094 32,897 32,897 33,164 27,846
Interest-bearing deposits 1,839,943 1,593,364 1,385,487 1,629,421 1,235,078
Total deposits 1,875,037 1,626,261 1,418,384 1,662,585 1,262,924
Shareholders' equity 173,459 161,228 135,666 163,230 120,010
1 On a fully-taxable equivalent ("FTE") basis assuming a
35% tax rate
2 Regulatory capital ratios are preliminary pending
filing of the Company's regulatory reports
 
 
First Internet Bancorp
Condensed Consolidated Balance Sheets (unaudited)
Amounts in thousands
         
 
September 30, June 30, September 30,
2017 2017 2016
 
Assets
Cash and due from banks $ 4,509 $ 5,425 $ 2,314
Interest-bearing deposits 121,195 60,818 65,511
Interest-bearing time deposits - - 250
Securities available-for-sale, at fair value 492,468 489,775 470,978
Securities held-to-maturity, at amortized cost 19,212 19,215 5,500
Loans held-for-sale 45,487 27,335 32,471
Loans 1,868,487 1,698,421 1,198,932
Allowance for loan losses   (14,087 )   (13,194 )   (10,561 )
Net loans 1,854,400 1,685,227 1,188,371
Accrued interest receivable 9,366 8,479 5,848
Federal Home Loan Bank of Indianapolis stock 19,575 19,575 8,595
Cash surrender value of bank-owned life insurance 34,856 34,602 18,044
Premises and equipment, net 9,739 9,667 10,116
Goodwill 4,687 4,687 4,687
Other real estate owned 5,136 4,488 4,533
Accrued income and other assets   12,792     11,978     6,978  
Total assets $ 2,633,422   $ 2,381,271   $ 1,824,196  
 
Liabilities
Noninterest-bearing deposits $ 33,734 $ 36,636 $ 32,938
Interest-bearing deposits   1,963,294     1,695,476     1,460,663  
Total deposits 1,997,028 1,732,112 1,493,601
Advances from Federal Home Loan Bank 365,180 435,183 147,978
Subordinated debt 36,689 36,652 36,541
Accrued interest payable 237 210 125
Accrued expenses and other liabilities   13,421     13,284     8,797  
Total liabilities   2,412,555     2,217,441     1,687,042  
Shareholders' equity
Voting common stock 171,783 119,883 95,839
Retained earnings 54,119 49,738 40,389
Accumulated other comprehensive income (loss)   (5,035 )   (5,791 )   926  
Total shareholders' equity   220,867     163,830     137,154  
Total liabilities and shareholders' equity $ 2,633,422   $ 2,381,271   $ 1,824,196  
 
         
First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited)
Amounts in thousands, except per share data
     
 
Three Months Ended Nine Months Ended
 
September 30, June 30, September 30, September 30, September 30,
2017 2017 2016 2017 2016
 
Interest income
Loans $ 18,922 $ 16,416 $ 12,544 $ 49,494 $ 35,394
Securities - taxable 2,582 2,566 2,148 7,515 5,064
Securities - non-taxable 697 696 637 2,090 1,170
Other earning assets   493     297   142   960     507
Total interest income   22,694     19,975   15,471   60,059     42,135
Interest expense
Deposits 6,594 5,324 4,368 16,617 11,186
Other borrowed funds   1,909     1,677   765   4,820     2,164
Total interest expense   8,503     7,001   5,133   21,437     13,350
Net interest income 14,191 12,974 10,338 38,622 28,785
Provision for loan losses   1,336     1,322   2,204   3,693     4,074

Net interest income after provision for loan losses

  12,855     11,652   8,134   34,929     24,711
Noninterest income
Service charges and fees 226 220 207 657 622
Mortgage banking activities 2,535 2,155 4,442 6,306 9,991
(Loss) gain on sale of securities (8 ) - - (8 ) 177
Other   382     361   249   1,047     396
Total noninterest income   3,135     2,736   4,898   8,002     11,186
Noninterest expense
Salaries and employee benefits 5,197 5,193 4,550 15,463 12,777
Marketing, advertising and promotion 741 544 454 1,803 1,352
Consulting and professional fees 897 764 901 2,474 2,434
Data processing 247 245 286 729 835
Loan expenses 262 248 240 724 624
Premises and equipment 1,080 1,025 983 3,058 2,744
Deposit insurance premium 375 300 420 990 815
Other   602     604   579   1,781     1,712
Total noninterest expense   9,401     8,923   8,413   27,022     23,293
Income before income taxes 6,589 5,465 4,619 15,909 12,604
Income tax provision   1,694     1,464   1,521   4,181     4,240
Net income $ 4,895   $ 4,001 $ 3,098 $ 11,728   $ 8,364
 
Per common share data
Earnings per share - basic $ 0.72 $ 0.61 $ 0.55 $ 1.76 $ 1.66
Earnings per share - diluted $ 0.71 $ 0.61 $ 0.55 $ 1.75 $ 1.65
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)
Amounts in thousands
     
 
Three Months Ended
 
September 30, 2017 June 30, 2017 September 30, 2016
 
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 $ 1,818,379 $ 18,922 4.13 % $ 1,570,235 $ 16,416 4.19 % $ 1,192,816 $ 12,544 4.18 %
Securities - taxable 410,630 2,582 2.49 % 405,380 2,566 2.54 % 366,810 2,148 2.33 %
Securities - non-taxable 97,243 697 2.84 % 95,436 696 2.93 % 90,597 637 2.80 %
Other earning assets   108,547     493 1.80 %   67,989     297 1.75 %   51,779     142 1.09 %
Total interest-earning assets 2,434,799 22,694 3.70 % 2,139,040 19,975 3.75 % 1,702,002 15,471 3.62 %
 
Allowance for loan losses (13,657 ) (12,372 ) (10,378 )
Noninterest-earning assets   71,609     67,984     43,319  
Total assets $ 2,492,751   $ 2,194,652   $ 1,734,943  
 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits $ 88,633 $ 122 0.55 % $ 92,676 $ 127 0.55 % $ 81,151 $ 112 0.55 %
Savings accounts 42,308 97 0.91 % 34,545 67 0.78 % 27,479 40 0.58 %
Money market accounts 440,293 1,187 1.07 % 394,735 915 0.93 % 369,082 658 0.71 %
Certificates and brokered deposits   1,268,709     5,188 1.62 %   1,071,408     4,215 1.58 %   907,775     3,558 1.56 %
Total interest-bearing deposits 1,839,943 6,594 1.42 % 1,593,364 5,324 1.34 % 1,385,487 4,368 1.25 %
Other borrowed funds   431,738     1,909 1.75 %   398,044     1,677 1.69 %   173,568     765 1.75 %
Total interest-bearing liabilities 2,271,681 8,503 1.49 % 1,991,408 7,001 1.41 % 1,559,055 5,133 1.31 %
 
Noninterest-bearing deposits 35,094 32,897 32,897
Other noninterest-bearing liabilities   12,517     9,119     7,325  
Total liabilities 2,319,292 2,033,424 1,599,277
 
Shareholders' equity   173,459     161,228     135,666  
Total liabilities and shareholders' equity $ 2,492,751   $ 2,194,652   $ 1,734,943  
     
Net interest income $ 14,191 $ 12,974 $ 10,338
 
Interest rate spread 2.21 % 2.34 % 2.31 %
 
Net interest margin 2.31 % 2.43 % 2.42 %
 
Net interest margin - FTE 1 2.52 % 2.53 % 2.47 %
1 On a fully-taxable equivalent ("FTE") basis assuming a
35% tax rate
 
           
First Internet Bancorp
Average Balances and Rates (unaudited)
Amounts in thousands
     
 
Nine Months Ended
 
September 30, 2017 September 30, 2016
 
Average Interest / Yield / Average Interest / Yield /
Balance Dividends Cost Balance Dividends Cost
 
Assets
Interest-earning assets
Loans, including loans held-for-sale $ 1,577,526 $ 49,494 4.19 % $ 1,108,066 $ 35,394 4.27 %
Securities - taxable 399,284 7,515 2.52 % 292,620 5,064 2.31 %
Securities - non-taxable 95,348 2,090 2.93 % 54,777 1,170 2.85 %
Other earning assets   74,208     960 1.73 %   75,860     507 0.89 %
Total interest-earning assets 2,146,366 60,059 3.74 % 1,531,323 42,135 3.68 %
 
Allowance for loan losses (12,451 ) (9,505 )
Noninterest-earning assets   65,949     40,241  
Total assets $ 2,199,864   $ 1,562,059  
 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits $ 89,869 $ 368 0.55 % $ 82,063 $ 336 0.55 %
Savings accounts 35,113 210 0.80 % 26,844 117 0.58 %
Money market accounts 394,581 2,799 0.95 % 361,248 1,915 0.71 %
Certificates and brokered deposits   1,109,858     13,240 1.59 %   764,923     8,818 1.54 %
Total interest-bearing deposits 1,629,421 16,617 1.36 % 1,235,078 11,186 1.21 %
Other borrowed funds   364,738     4,820 1.77 %   173,438     2,164 1.67 %
Total interest-bearing liabilities 1,994,159 21,437 1.44 % 1,408,516 13,350 1.27 %
 
Noninterest-bearing deposits 33,164 27,846
Other noninterest-bearing liabilities   9,311     5,687  
Total liabilities 2,036,634 1,442,049
 
Shareholders' equity   163,230     120,010  
Total liabilities and shareholders' equity $ 2,199,864   $ 1,562,059  
   
Net interest income $ 38,622 $ 28,785
 
Interest rate spread 2.30 % 2.41 %
 
Net interest margin 2.41 % 2.51 %
 
Net interest margin - FTE 1 2.57 % 2.57 %
1 On a fully-taxable equivalent ("FTE") basis assuming a
35% tax rate.
 
           
First Internet Bancorp
Loans and Deposits (unaudited)
Amounts in thousands
     
 
September 30, 2017 June 30, 2017 September 30, 2016
 
Amount Percent Amount Percent Amount Percent
 
Commercial loans
Commercial and industrial $ 122,587 6.5 % $ 107,569 6.3 % $ 107,250 8.9 %
Owner-occupied commercial real estate 75,986 4.1 % 66,952 4.0 % 45,540 3.8 %
Investor commercial real estate 7,430 0.4 % 10,062 0.6 % 12,752 1.1 %
Construction 50,367 2.7 % 45,931 2.7 % 56,391 4.7 %
Single tenant lease financing 783,918 41.9 % 747,790 44.0 % 571,972 47.7 %
Public finance 269,347 14.4 % 179,873 10.6 % - 0.0 %
Healthcare finance   12,363 0.7 %   2,810 0.2 %   - 0.0 %
Total commercial loans 1,321,998 70.7 % 1,160,987 68.4 % 793,905 66.2 %
 
Consumer loans
Residential mortgage 291,382 15.6 % 292,997 17.3 % 200,889 16.7 %
Home equity 31,236 1.7 % 33,312 2.0 % 37,849 3.2 %
Trailers 97,811 5.2 % 94,036 5.5 % 78,419 6.5 %
Recreational vehicles 66,619 3.6 % 63,514 3.7 % 49,275 4.1 %
Other consumer loans   56,490 3.0 %   51,052 3.0 %   35,464 3.0 %
Total consumer loans 543,538 29.1 % 534,911 31.5 % 401,896 33.5 %
 
Net deferred loan fees, premiums and discounts 2,951 0.2 % 2,523 0.1 % 3,131 0.3 %
           
Total loans $ 1,868,487 100.0 % $ 1,698,421 100.0 % $ 1,198,932 100.0 %
 
 
September 30, 2017 June 30, 2017 September 30, 2016
 
Amount Percent Amount Percent Amount Percent
 
Deposits
Noninterest-bearing deposits $ 33,734 1.7 % $ 36,636 2.1 % $ 32,938 2.2 %
Interest-bearing demand deposits 89,748 4.5 % 94,726 5.5 % 84,939 5.7 %
Savings accounts 49,913 2.5 % 35,764 2.1 % 27,661 1.8 %
Money market accounts 499,160 25.0 % 386,224 22.3 % 364,517 24.4 %
Certificates of deposits 1,300,952 65.1 % 1,176,230 67.9 % 970,684 65.0 %
Brokered deposits 23,521 1.2 % 2,532 0.1 % 12,862 0.9 %
           
Total deposits $ 1,997,028 100.0 % $ 1,732,112 100.0 % $ 1,493,601 100.0 %
 
       
First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Amounts in thousands, except per share data
   
 
Three Months Ended Nine Months Ended
 
September 30, June 30, September 30, September 30, September 30,
2017 2017 2016 2017 2016
 
Total equity - GAAP $ 220,867 $ 163,830 $ 137,154 $ 220,867 $ 137,154
Adjustments:
Goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Tangible common equity $ 216,180   $ 159,143   $ 132,467   $ 216,180   $ 132,467  
 
Total assets - GAAP $ 2,633,422 $ 2,381,271 $ 1,824,196 $ 2,633,422 $ 1,824,196
Adjustments:
Goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Tangible assets $ 2,628,735   $ 2,376,584   $ 1,819,509   $ 2,628,735   $ 1,819,509  
 
Common shares outstanding 8,411,077 6,513,577 5,533,050 8,411,077 5,533,050
 
Book value per common share $ 26.26 $ 25.15 $ 24.79 $ 26.26 $ 24.79
Effect of goodwill   (0.56 )   (0.72 )   (0.85 )   (0.56 )   (0.85 )
Tangible book value per common share $ 25.70   $ 24.43   $ 23.94   $ 25.70   $ 23.94  
 
Total shareholders' equity to assets ratio 8.39 % 6.88 % 7.52 % 8.39 % 7.52 %
Effect of goodwill   (0.17 %)   (0.18 %)   (0.24 %)   (0.17 %)   (0.24 %)
Tangible common equity to tangible assets ratio   8.22 %   6.70 %   7.28 %   8.22 %   7.28 %
 
Total average equity - GAAP $ 173,459 $ 161,228 $ 135,666 $ 163,230 $ 120,010
Adjustments:
Average goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Average tangible common equity $ 168,772   $ 156,541   $ 130,979   $ 158,543   $ 115,323  
 
Return on average shareholders' equity 11.20 % 9.95 % 9.08 % 9.61 % 9.31 %
Effect of goodwill   0.31 %   0.30 %   0.33 %   0.28 %   0.38 %
Return on average tangible common equity   11.51 %   10.25 %   9.41 %   9.89 %   9.69 %
 
Net interest income $ 14,191 $ 12,974 $ 10,338 $ 38,622 $ 28,785
Adjustments:
Fully-taxable equivalent adjustments 1   1,280     543     239     2,586     696  
Net interest income - FTE $ 15,471   $ 13,517   $ 10,577   $ 41,208   $ 29,481  
 
Net interest margin 2.31 % 2.43 % 2.42 % 2.41 % 2.51 %
Effect of fully-taxable equivalent adjustments 1   0.21 %   0.10 %   0.05 %   0.16 %   0.06 %
Net interest margin - FTE   2.52 %   2.53 %   2.47 %   2.57 %   2.57 %
1 Assuming a 35% tax rate

View Comments and Join the Discussion!