Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8‑K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934


Date of report (Date of earliest event reported): April 24, 2019
First Internet Bancorp
(Exact Name of Registrant as Specified in Its Charter)
 
 
 
 
 
Indiana
(State or Other Jurisdiction of Incorporation)
 
 
 
 
 
001-35750
 
20-3489991
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
 
 
11201 USA Parkway
 
46037
Fishers, Indiana
 
(Address of Principal Executive Offices)
 
(Zip Code)
 
 
 
 
 
(317) 532-7900
(Registrant's Telephone Number, Including Area Code)
 
 
 
 
 
 
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨





Item 2.02
Results of Operations and Financial Condition

On April 24, 2019, First Internet Bancorp issued a press release announcing financial results for the quarter ended March 31, 2019. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

Item 9.01
Financial Statements and Exhibits

Number
 
Description
 
Method of filing
 
 
 
 
 
 
 
Furnished herewith









SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Dated:
April 24, 2019
 
 
 
 
 
 
 
FIRST INTERNET BANCORP
 
 
 
 
 
 
 
By:
/s/ Kenneth J. Lovik
 
 
 
Kenneth J. Lovik, Executive Vice President & Chief Financial Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
397635600_fibancorplogoa37.jpg

First Internet Bancorp Reports First Quarter 2019 Results

Highlights for the first quarter include:

Diluted earnings per share of $0.56, increases of 60.0% over the fourth quarter of 2018 as reported and 5.7% after adjusting for a write-down of OREO in the prior quarter

Net income of $5.7 million, increases of 59.3% over the fourth quarter of 2018 as reported and 3.8% over results adjusted for the write-down

Net interest income of $16.2 million, an increase of 5.3% from the fourth quarter of 2018

Total loans increased $123.7 million, or 4.6%, from December 31, 2018 and $630.5 million, or 28.5%, from March 31, 2018

Fishers, Indiana, April 24, 2019 - First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the first quarter of 2019. Reported net income for the first quarter of 2019 was $5.7 million, or $0.56 diluted earnings per share. This compares to net income of $3.6 million, or $0.35 diluted earnings per share, for the fourth quarter of 2018, and net income of $6.0 million, or $0.71 diluted earnings per share, for the first quarter of 2018.

The fourth quarter of 2018’s results included a $2.4 million pre-tax write-down of commercial other real estate owned (“OREO”). Excluding this charge, adjusted net income for the fourth quarter of 2018 was $5.5 million, or $0.53 adjusted diluted earnings per share.

“We are pleased with our start to 2019 as we reported increased quarterly net income and earnings per share, driven by revenue growth, well-managed expenses and low credit costs,” said David Becker, Chairman, President and Chief Executive Officer. “Our strategy of focusing on our specialty lending areas has continued to pay off. During the quarter, single tenant lease financing was again strong and our newer healthcare finance business continued to expand. Additionally, we made another key hire in the small-business lending area and attained Preferred Lending Partner status from the Small Business Administration which will benefit us as we work to build this business line.

“We are also pleased with the relative stability in our net interest margin, as the increase in our yield on interest-earning assets, driven by disciplined loan pricing, largely offset the increase in deposit costs. Furthermore, our credit quality remained among the best in the industry.

Mr. Becker concluded, “The entire team at First Internet is engaged at a high level to provide a differentiated experience for our customers. We celebrated our twentieth anniversary during the quarter and the unique culture we have created was recognized yet again as we were named one of the “Best Places to Work in Indiana” by the Indiana Chamber of Commerce for the fifth time. Looking ahead, we will remain disciplined in our capital allocation, prudently managing our loan growth while also selectively selling pools of lower yielding assets and redeploying the proceeds into higher yielding new originations to drive increased profitability and shareholder value.”




Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2019 was $16.2 million, compared to $15.4 million for both the fourth and first quarters of 2018. On a fully-taxable equivalent basis, net interest income for the first quarter of 2019 was $17.8 million, compared to $16.9 million for the fourth quarter of 2018, and $16.4 million for the first quarter of 2018.

Total interest income for the first quarter of 2019 was $35.0 million, an increase of 9.9%, compared to the fourth quarter of 2018, and an increase of 34.7% compared to the first quarter of 2018. On a fully-taxable equivalent basis, total interest income for the first quarter of 2019 was $36.6 million, an increase of 9.7% compared to the fourth quarter of 2018, and an increase of 35.4% compared to the first quarter of 2018. The increase in total interest income compared to the fourth quarter of 2018 was driven primarily by a $308.7 million, or 9.5%, increase in average interest-earning assets, as well as a 10 basis point increase in the yield on those assets. The yield on interest-earning assets for the first quarter of 2019 increased to 4.00% from 3.90% in the prior quarter due to higher yields across most earning asset categories, including an increase of 10 basis points on the loan portfolio.

Total interest expense for the first quarter of 2019 was $18.8 million, an increase of 14.2%, compared to the fourth quarter of 2018, and an increase of 77.5% compared to the first quarter of 2018. The increase in total interest expense compared to the fourth quarter of 2018 was driven primarily by a $256.2 million increase in average interest-bearing deposit balances, combined with the effect of a 15 basis point increase in the cost of funds related to those deposits. While rates paid on new CD production stabilized during the first quarter of 2019, the overall cost of deposit funding increased as new production rates outweighed the costs of maturing CDs. Furthermore, the Company used longer duration brokered deposit structures to mitigate long term interest rate risk. Overall, the total cost of interest-bearing liabilities increased 14 basis points from the fourth quarter of 2018.

Net interest margin (“NIM”) declined three basis points to 1.86% for the first quarter of 2019, compared to 1.89% for the fourth quarter of 2018 and 2.26% for the first quarter of 2018. On a fully-taxable equivalent basis, NIM also decreased three basis points to 2.04% for the first quarter of 2019, from 2.07% for the fourth quarter of 2018, and was down from 2.41% for the first quarter of 2018.

Noninterest Income
Noninterest income for the first quarter of 2019 was $2.4 million, compared to $2.0 million in the fourth quarter of 2018, and $2.5 million for the first quarter of 2018. The increase compared to the fourth quarter of 2018 was driven primarily by an increase in revenue from mortgage banking activities, partially offset by the loss on the sale of loans. The increase in mortgage banking revenue of $0.5 million, or 41.7%, was due mainly to an increase in mandatory pipeline volumes, as the decline in long term interest rates during the quarter drove increased interest rate lock commitment activity. The loss on loan sales of $0.1 million was due primarily to the sale of $31.5 million of seasoned lower yielding public finance and residential mortgage loans.

Noninterest Expense
Noninterest expense for the first quarter of 2019 was $11.1 million, compared to $12.7 million for the fourth quarter of 2018 and $10.2 million for the first quarter of 2018. The decrease from the fourth quarter of 2018 was due primarily to the $2.4 million write-down of commercial OREO discussed above, partially offset by higher salaries and employee benefits and premises and equipment costs.

Income Taxes
The Company reported income tax expense of $0.5 million and an effective tax rate of 8.5% for the first quarter of 2019, compared to an income tax benefit of $0.3 million for the fourth quarter of 2018 and income tax expense of $0.9 million and an effective tax rate of 12.5% for the first quarter of 2018. Included in the tax expense in the first quarter of 2019 was $0.1 million associated with annual equity compensation vesting events.




Loans and Credit Quality
Total loans as of March 31, 2019 were $2.8 billion, an increase of $123.7 million, or 4.6%, compared to December 31, 2018 and $630.5 million, or 28.5%, compared to March 31, 2018. Total commercial loan balances were $2.1 billion as of March 31, 2019, an increase of $106.1 million, or 5.3%, compared to December 31, 2018 and $476.3 million, or 29.4%, compared to March 31, 2018. Compared to the linked quarter, the growth in commercial loan balances was driven largely by production in single tenant lease financing and healthcare finance, but was partially offset by the Company’s first sale of public finance loans which consisted of $26.2 million of seasoned lower yielding credits.

Total consumer loan balances were $717.9 million as of March 31, 2019, an increase of $9.5 million, or 1.3%, compared to December 31, 2018 and $134.1 million, or 23.0%, compared to March 31, 2018. Compared to the linked quarter, the growth in consumer loan balances was driven primarily by draw-downs on residential construction loans and new originations in the trailer and recreational vehicle portfolios, partially offset by the sale of $5.2 million of seasoned lower yielding residential mortgage loans.

Total delinquencies 30 days or more past due were 0.18% of total loans as of March 31, 2019, compared to 0.15% as of December 31, 2018 and 0.04% as of March 31, 2018. Nonperforming loans to total loans increased to 0.12% as of March 31, 2019, compared to 0.03% at both December 31, 2018 and March 31, 2018. Compared to the linked quarter, the increase was due mainly to a seasoned residential mortgage loan with an unpaid principal balance of $3.1 million that was placed on nonaccrual status during the quarter after becoming delinquent late in the fourth quarter of 2018. The Company determined that no impairment existed as of March 31, 2019 as there appears to be sufficient collateral supporting the loan based on a recent appraisal.

The allowance for loan losses as a percentage of total loans was 0.66% as of March 31, 2019, consistent with December 31, 2018 and down from 0.70% as of March 31, 2018.

Net charge-offs of $0.3 million were recognized during the first quarter of 2019, resulting in net charge-offs to average loans of 0.05%, flat when compared to both the fourth and first quarters of 2018. The provision for loan losses in the first quarter of 2019 was $1.3 million, compared to $1.5 million for the fourth quarter of 2018 and $0.9 million for the first quarter of 2018. The decline in the provision for loan losses compared to the fourth quarter of 2018 was driven primarily by slower loan growth.

Balance Sheet Management
To increase asset sensitivity and reduce long term interest rate risk, the Company initiated an asset hedging strategy in the fourth quarter of 2017. As of March 31, 2019, the Company had a total notional value of $435.7 million of pay fixed / receive variable interest rate swaps in place to hedge public finance loans, representing 61.4% of the total public finance loan balances outstanding. Including $88.2 million of notional value interest rate swaps in place to hedge fixed rate investment securities, the Company had swaps with a total notional value of $523.9 million in place at the end of the first quarter of 2019 to effectively convert long term fixed rate assets to variable rate.

The Company has also implemented a liability hedging strategy using pay fixed / receive variable interest rate swaps to extend the duration of short term FHLB advances and brokered variable rate money market deposits. As of March 31, 2019, the Company had $210.0 million of notional value interest rate swaps related to these funding sources.

Based on the interest rate environment and funding needs during the first quarter of 2019, the Company did not execute any additional interest rate swaps to hedge either assets or liabilities during the quarter. In future periods, the Company’s use of interest rate swaps as a tool to manage exposure to both short- and long-term interest rate risk will be determined based on multiple factors, including, but not limited to, the interest rate environment and forward rate expectations.




The Company may also use loan sales or reposition the securities and wholesale funding portfolios to manage balance sheet growth and capital, provide liquidity and improve NIM and profitability. As discussed above, the Company sold $31.5 million of seasoned lower yielding public finance and residential mortgage loans at a modest loss during the first quarter of 2019, providing an opportunity to manage loan growth and improve the mix of earning assets by redeploying the sale proceeds into higher yielding new loan originations.

Capital
As of March 31, 2019, total shareholders’ equity was $294.0 million, an increase of $5.3 million, or 1.8%, compared to December 31, 2018, due mainly to the net income earned during the quarter and a decrease in accumulated other comprehensive loss, partially offset by the impact of common stock repurchased during the quarter. Book value per common share increased to $29.03 as of March 31, 2019, up from $28.39 as of December 31, 2018 and $26.60 as of March 31, 2018. Tangible book value per common share increased to $28.57, up from $27.93 and $26.05, each as of the same reference dates.

In connection with its previously announced stock repurchase program, the Company repurchased 85,286 shares during the first quarter of 2019 at an average price of $20.47 per share. Subsequent to quarter-end, the Company repurchased an additional 32,000 shares at an average price of $20.81 per share.

The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of March 31, 2019.

 
 
As of March 31, 2019
 
 
Company
 
Bank
 
 
 
 
 
Total shareholders’ equity to assets
 
8.01%
 
7.84%
Tangible common equity to tangible assets 1
 
7.89%
 
7.73%
Tier 1 leverage ratio 2
 
8.34%
 
8.17%
Common equity tier 1 capital ratio 2
 
11.66%
 
11.42%
Tier 1 capital ratio 2
 
11.66%
 
11.42%
Total risk-based capital ratio 2
 
13.68%
 
12.15%
 
 
 
 
 
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, April 25, 2019 to discuss its quarterly financial results. The call can be accessed via telephone at (888) 317-6016. A recorded replay can be accessed through May 25, 2019 by dialing (877) 344-7529; passcode: 10130514.
Additionally, interested parties can listen to a live webcast of the call on Company's website at www.firstinternetbancorp.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.




About First Internet Bancorp
First Internet Bancorp is a bank holding company with assets of $3.7 billion as of March 31, 2019. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. The Bank provides consumer and small business deposit, consumer loan, residential mortgage, and specialty finance services nationally as well as commercial real estate loans, commercial and industrial loans, SBA financing and treasury management services. First Internet Bancorp’s common stock trades on the Nasdaq Global Select Market under the symbol “INBK” and is a component of the Russell 2000® Index. Additional information about the Company is available at www.firstinternetbancorp.com and additional information about the Bank, including its products and services, is available at www.firstib.com.

Forward-Looking Statements
This press release may contain forward-looking statements with respect to the financial condition, results of operations, trends in lending policies, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “pending,” “plan,” “preliminary,” “should,” “will,” “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. 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 and healthcare finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; fluctuations in interest rates; general economic conditions; risks relating to the regulation of financial institutions; and other factors identified in reports we file with the U.S. Securities and Exchange Commission. All statements in this press release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures, specifically tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, total interest income - FTE, net interest income - FTE, net interest margin - FTE, adjusted income before income taxes, adjusted income tax provision, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders’ equity, adjusted return on average tangible common equity and adjusted effective income tax rate are used by the Company’s management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”

Contact Information:
 
 
 
Investors/Analysts
 
Media
 
Paula Deemer
 
Nicole Lorch
 
Investor Relations
 
Executive Vice President & Chief Operating Officer
(317) 428-4628
 
(317) 532-7906
 
 
 




First Internet Bancorp
 
 
 
Summary Financial Information (unaudited)
 
 
Amounts in thousands, except per share data
 
 
 
 
 
Three Months Ended
 
 
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Net income
 
$
5,696

 
$
3,576

 
$
6,028

 
 
 
 
 
 
 
Per share and share information
 
 
 
 
 
 
Earnings per share - basic
 
$
0.56

 
$
0.35

 
$
0.71

Earnings per share - diluted
 
0.56

 
0.35

 
0.71

Dividends declared per share
 
0.06

 
0.06

 
0.06

Book value per common share
 
29.03

 
28.39

 
26.60

Tangible book value per common share 1
 
28.57

 
27.93

 
26.05

Common shares outstanding
 
10,128,587

 
10,170,778

 
8,450,925

Average common shares outstanding:
 
 
 
 
 
 
Basic
 
10,217,637

 
10,263,086

 
8,499,196

Diluted
 
10,230,531

 
10,275,040

 
8,542,363

Performance ratios
 
 
 
 
 
 
Return on average assets
 
0.64
%
 
0.43
%
 
0.87
%
Return on average shareholders' equity
 
7.91
%
 
4.89
%
 
10.96
%
Return on average tangible common equity 1
 
8.04
%
 
4.98
%
 
11.19
%
Net interest margin
 
1.86
%
 
1.89
%
 
2.26
%
Net interest margin - FTE 1,2
 
2.04
%
 
2.07
%
 
2.41
%
Capital ratios 3
 
 
 
 
 
 
Total shareholders' equity to assets
 
8.01
%
 
8.15
%
 
7.85
%
Tangible common equity to tangible assets 1
 
7.89
%
 
8.03
%
 
7.70
%
Tier 1 leverage ratio
 
8.34
%
 
9.00
%
 
8.09
%
Common equity tier 1 capital ratio
 
11.66
%
 
12.39
%
 
11.31
%
Tier 1 capital ratio
 
11.66
%
 
12.39
%
 
11.31
%
Total risk-based capital ratio
 
13.68
%
 
14.53
%
 
13.89
%
Asset quality
 
 
 
 
 
 
Nonperforming loans
 
$
3,432

 
$
889

 
$
659

Nonperforming assets
 
6,071

 
3,508

 
5,710

Nonperforming loans to loans
 
0.12
%
 
0.03
%
 
0.03
%
Nonperforming assets to total assets
 
0.17
%
 
0.10
%
 
0.20
%
Allowance for loan losses to:
 
 
 
 
 
 
Loans
 
0.66
%
 
0.66
%
 
0.70
%
Nonperforming loans
 
549.0
%
 
2,013.1
%
 
2,361.2
%
Net charge-offs to average loans
 
0.05
%
 
0.05
%
 
0.05
%
Average balance sheet information
 
 
 
 
 
 
Loans
 
$
2,760,164

 
$
2,577,584

 
$
2,154,876

Total securities
 
523,265

 
494,256

 
485,173

Other earning assets
 
246,732

 
148,311

 
104,685

Total interest-earning assets
 
3,544,849

 
3,236,144

 
2,762,620

Total assets
 
3,627,508

 
3,320,850

 
2,823,790

Noninterest-bearing deposits
 
42,551

 
48,779

 
43,976

Interest-bearing deposits
 
2,728,674

 
2,472,443

 
2,105,092

Total deposits
 
2,771,225

 
2,521,222

 
2,149,068

Shareholders' equity
 
291,883

 
289,844

 
223,131


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, except for December 31, 2018)
Amounts in thousands
 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Assets
 
 
 
 
 
 
Cash and due from banks
 
$
5,708

 
$
7,080

 
$
5,675

Interest-bearing deposits
 
124,786

 
181,632

 
58,072

Securities available-for-sale, at fair value
 
520,382

 
481,345

 
463,652

Securities held-to-maturity, at amortized cost
 
31,222

 
22,750

 
19,206

Loans held-for-sale
 
13,706

 
18,328

 
17,067

Loans
 
2,839,928

 
2,716,228

 
2,209,405

Allowance for loan losses
 
(18,841
)
 
(17,896
)
 
(15,560
)
Net loans
 
2,821,087

 
2,698,332

 
2,193,845

Accrued interest receivable
 
17,217

 
16,822

 
11,898

Federal Home Loan Bank of Indianapolis stock
 
23,625

 
23,625

 
20,250

Cash surrender value of bank-owned life insurance
 
36,293

 
36,059

 
35,342

Premises and equipment, net
 
13,737

 
10,697

 
10,110

Goodwill
 
4,687

 
4,687

 
4,687

Other real estate owned
 
2,619

 
2,619

 
5,041

Accrued income and other assets
 
55,107

 
37,716

 
17,883

Total assets
 
$
3,670,176

 
$
3,541,692

 
$
2,862,728

 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Noninterest-bearing deposits
 
$
45,878

 
$
43,301

 
$
47,678

Interest-bearing deposits
 
2,765,230

 
2,628,050

 
2,129,443

Total deposits
 
2,811,108

 
2,671,351

 
2,177,121

Advances from Federal Home Loan Bank
 
495,146

 
525,153

 
413,173

Subordinated debt
 
33,911

 
33,875

 
36,763

Accrued interest payable
 
1,549

 
1,108

 
410

Accrued expenses and other liabilities
 
34,449

 
21,470

 
10,437

Total liabilities
 
3,376,163

 
3,252,957

 
2,637,904

Shareholders' equity
 
 
 
 
 
 
Voting common stock
 
226,235

 
227,587

 
172,421

Retained earnings
 
81,946

 
77,689

 
61,414

Accumulated other comprehensive loss
 
(14,168
)
 
(16,541
)
 
(9,011
)
Total shareholders' equity
 
294,013

 
288,735

 
224,824

Total liabilities and shareholders' equity
 
$
3,670,176

 
$
3,541,692

 
$
2,862,728




First Internet Bancorp
 
 
 
 
 
Condensed Consolidated Statements of Income (unaudited)
Amounts in thousands, except per share data
 
 
 
 
 
Three Months Ended
 
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Interest income
 
 
 
 
 
Loans
$
29,218

 
$
27,249

 
$
22,115

Securities - taxable
3,324

 
2,927

 
2,488

Securities - non-taxable
684

 
701

 
711

Other earning assets
1,773

 
972

 
665

Total interest income
34,999

 
31,849

 
25,979

Interest expense
 
 
 
 
 
Deposits
15,386

 
13,338

 
8,270

Other borrowed funds
3,369

 
3,090

 
2,294

Total interest expense
18,755

 
16,428

 
10,564

Net interest income
16,244

 
15,421

 
15,415

Provision for loan losses
1,285

 
1,487

 
850

Net interest income after provision
for loan losses
14,959

 
13,934

 
14,565

Noninterest income
 
 
 
 
 
Service charges and fees
236

 
237

 
230

Mortgage banking activities
1,617

 
1,141

 
1,578

(Loss) gain on sale of loans
(104
)
 
89

 
414

Other
623

 
580

 
320

Total noninterest income
2,372

 
2,047

 
2,542

Noninterest expense
 
 
 
 
 
Salaries and employee benefits
6,321

 
5,738

 
5,905

Marketing, advertising and promotion
469

 
543

 
716

Consulting and professional fees
814

 
862

 
851

Data processing
317

 
320

 
263

Loan expenses
314

 
204

 
237

Premises and equipment
1,500

 
1,307

 
1,214

Deposit insurance premium
555

 
570

 
465

Write-down of other real estate owned

 
2,423

 

Other
819

 
772

 
566

Total noninterest expense
11,109

 
12,739

 
10,217

Income before income taxes
6,222

 
3,242

 
6,890

Income tax provision (benefit)
526

 
(334
)
 
862

Net income
$
5,696

 
$
3,576

 
$
6,028

 
 
 
 
 
 
Per common share data
 
 
 
 
 
Earnings per share - basic
$
0.56

 
$
0.35

 
$
0.71

Earnings per share - diluted
$
0.56

 
$
0.35

 
$
0.71

Dividends declared per share
$
0.06

 
$
0.06

 
$
0.06


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

March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
Average Balance
 
Interest / Dividends
 
Yield / Cost
 
Average Balance
 
Interest / Dividends
 
Yield / Cost
 
Average Balance
 
Interest / Dividends
 
Yield / Cost
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, including loans held-for-sale 1
$
2,774,852

 
$
29,218

 
4.27
%
 
$
2,593,577

 
$
27,249

 
4.17
%
 
$
2,172,762

 
$
22,115

 
4.13
%
Securities - taxable
429,020

 
3,324

 
3.14
%
 
402,179

 
2,927

 
2.89
%
 
389,447

 
2,488

 
2.59
%
Securities - non-taxable
94,245

 
684

 
2.94
%
 
92,077

 
701

 
3.02
%
 
95,726

 
711

 
3.01
%
Other earning assets
246,732

 
1,773

 
2.91
%
 
148,311

 
972

 
2.60
%
 
104,685

 
665

 
2.58
%
Total interest-earning assets
3,544,849

 
34,999

 
4.00
%
 
3,236,144

 
31,849

 
3.90
%
 
2,762,620

 
25,979

 
3.81
%
Allowance for loan losses
(18,229
)
 
 
 
 
 
(17,065
)
 
 
 
 
 
(15,206
)
 
 
 
 
Noninterest-earning assets
100,888

 
 
 
 
 
101,771

 
 
 
 
 
76,376

 
 
 
 
Total assets
$
3,627,508

 
 
 
 
 
$
3,320,850

 
 
 
 
 
$
2,823,790

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
109,453

 
$
212

 
0.79
%
 
$
89,234

 
$
182

 
0.81
%
 
$
91,034

 
$
122

 
0.54
%
Savings accounts
38,853

 
108

 
1.13
%
 
42,694

 
123

 
1.14
%
 
55,952

 
158

 
1.15
%
Money market accounts
563,106

 
2,752

 
1.98
%
 
518,421

 
2,575

 
1.97
%
 
562,345

 
1,893

 
1.37
%
Certificates and brokered deposits
2,017,262

 
12,314

 
2.48
%
 
1,822,094

 
10,458

 
2.28
%
 
1,395,761

 
6,097

 
1.77
%
Total interest-bearing deposits
2,728,674

 
15,386

 
2.29
%
 
2,472,443

 
13,338

 
2.14
%
 
2,105,092

 
8,270

 
1.59
%
Other borrowed funds
540,705

 
3,369

 
2.53
%
 
499,877

 
3,090

 
2.45
%
 
441,970

 
2,294

 
2.10
%
Total interest-bearing liabilities
3,269,379

 
18,755

 
2.33
%
 
2,972,320

 
16,428

 
2.19
%
 
2,547,062

 
10,564

 
1.68
%
Noninterest-bearing deposits
42,551

 
 
 
 
 
48,779

 
 
 
 
 
43,976

 
 
 
 
Other noninterest-bearing liabilities
23,695

 
 
 
 
 
9,907

 
 
 
 
 
9,621

 
 
 
 
Total liabilities
3,335,625

 
 
 
 
 
3,031,006

 
 
 
 
 
2,600,659

 
 
 
 
Shareholders' equity
291,883

 
 
 
 
 
289,844

 
 
 
 
 
223,131

 
 
 
 
Total liabilities and shareholders' equity
$
3,627,508

 
 
 
 
 
$
3,320,850

 
 
 
 
 
$
2,823,790

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
16,244

 
 
 
 
 
$
15,421

 
 
 
 
 
$
15,415

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread
 
 
 
 
1.67
%
 
 
 
 
 
1.71
%
 
 
 
 
 
2.13
%
Net interest margin
 
 
 
 
1.86
%
 
 
 
 
 
1.89
%
 
 
 
 
 
2.26
%
Net interest margin - FTE 2,3
 
 
 
 
2.04
%
 
 
 
 
 
2.07
%
 
 
 
 
 
2.41
%

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)
 
 
 
 
 
 
 
 
 
 
 
Amounts in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
Commercial loans
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
112,146

 
3.9
%
 
$
114,382

 
4.2
%
 
$
119,893

 
5.4
%
Owner-occupied commercial real estate
 
87,482

 
3.1
%
 
87,962

 
3.2
%
 
81,998

 
3.7
%
Investor commercial real estate
 
11,188

 
0.4
%
 
5,391

 
0.2
%
 
6,273

 
0.3
%
Construction
 
42,319

 
1.5
%
 
39,916

 
1.5
%
 
47,013

 
2.1
%
Single tenant lease financing
 
975,841

 
34.3
%
 
919,440

 
33.8
%
 
834,335

 
37.8
%
Public finance
 
708,816

 
25.0
%
 
706,342

 
26.0
%
 
481,923

 
21.8
%
Healthcare finance
 
158,796

 
5.6
%
 
117,007

 
4.4
%
 
48,891

 
2.2
%
Total commercial loans
 
2,096,588

 
73.8
%
 
1,990,440

 
73.3
%
 
1,620,326

 
73.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
 
404,869

 
14.3
%
 
399,898

 
14.7
%
 
318,298

 
14.4
%
Home equity
 
27,794

 
1.0
%
 
28,735

 
1.1
%
 
29,296

 
1.3
%
Trailers
 
140,548

 
4.9
%
 
136,620

 
5.0
%
 
107,714

 
4.9
%
Recreational vehicles
 
95,871

 
3.4
%
 
91,912

 
3.4
%
 
73,005

 
3.3
%
Other consumer loans
 
48,840

 
1.7
%
 
51,239

 
1.9
%
 
55,466

 
2.5
%
Total consumer loans
 
717,922

 
25.3
%
 
708,404

 
26.1
%
 
583,779

 
26.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Net deferred loan fees, premiums, discounts and other 1
 
25,418

 
0.9
%
 
17,384

 
0.6
%
 
5,300

 
0.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans
 
$
2,839,928

 
100.0
%
 
$
2,716,228

 
100.0
%
 
$
2,209,405

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
 
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
Deposits
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
 
$
45,878

 
1.6
%
 
$
43,301

 
1.6
%
 
$
47,678

 
2.2
%
Interest-bearing demand deposits
 
111,626

 
4.0
%
 
121,055

 
4.5
%
 
99,006

 
4.5
%
Savings accounts
 
41,958

 
1.5
%
 
38,489

 
1.4
%
 
60,176

 
2.8
%
Money market accounts
 
573,895

 
20.4
%
 
528,533

 
19.9
%
 
592,113

 
27.2
%
Certificates of deposits
 
1,464,543

 
52.1
%
 
1,292,883

 
48.4
%
 
1,185,176

 
54.4
%
Brokered deposits
 
573,208

 
20.4
%
 
647,090

 
24.2
%
 
192,972

 
8.9
%
Total deposits
 
$
2,811,108

 
100.0
%
 
$
2,671,351

 
100.0
%
 
$
2,177,121

 
100.0
%

1 Includes carrying value adjustments of $11.5 million, $5.0 million and ($0.7) million as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively, related to interest rate swaps associated with public finance loans.







First Internet Bancorp
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measures
 
 
Amounts in thousands, except per share data
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Total equity - GAAP
 
$
294,013

 
$
288,735

 
$
224,824

Adjustments:
 
 
 
 
 
 
           Goodwill
 
(4,687
)
 
(4,687
)
 
(4,687
)
Tangible common equity
 
$
289,326

 
$
284,048

 
$
220,137

 
 
 
 
 
 
 
Total assets - GAAP
 
$
3,670,176

 
$
3,541,692

 
$
2,862,728

Adjustments:
 
 
 
 
 
 
           Goodwill
 
(4,687
)
 
(4,687
)
 
(4,687
)
Tangible assets
 
$
3,665,489

 
$
3,537,005

 
$
2,858,041

 
 
 
 
 
 
 
Common shares outstanding
 
10,128,587

 
10,170,778

 
8,450,925

 
 
 
 
 
 
 
Book value per common share
 
$
29.03

 
$
28.39

 
$
26.60

Effect of goodwill
 
(0.46
)
 
(0.46
)
 
(0.55
)
Tangible book value per common share
 
$
28.57

 
$
27.93

 
$
26.05

 
 
 
 
 
 
 
Total shareholders' equity to assets ratio
 
8.01
 %
 
8.15
 %
 
7.85
 %
Effect of goodwill
 
(0.12
%)
 
(0.12
%)
 
(0.15
%)
Tangible common equity to tangible assets ratio
 
7.89
 %
 
8.03
 %
 
7.70
 %
 
 
 
 
 
 
 
Total average equity - GAAP
 
$
291,883

 
$
289,844

 
$
223,131

Adjustments:
 
 
 
 
 
 
           Average goodwill
 
(4,687
)
 
(4,687
)
 
(4,687
)
Average tangible common equity
 
$
287,196

 
$
285,157

 
$
218,444

 
 
 
 
 
 
 
Return on average shareholders' equity
 
7.91
 %
 
4.89
 %
 
10.96
 %
Effect of goodwill
 
0.13
 %
 
0.09
 %
 
0.23
 %
Return on average tangible common equity
 
8.04
 %
 
4.98
 %
 
11.19
 %
 
 
 
 
 
 
 
Total interest income
 
$
34,999

 
$
31,849

 
$
25,979

Adjustments:
 
 
 
 
 
 
Fully-taxable equivalent adjustments 1
 
1,557

 
1,477

 
1,018

Total interest income - FTE
 
$
36,556

 
$
33,326

 
$
26,997

 
 
 
 
 
 
 
Net interest income
 
$
16,244

 
$
15,421

 
$
15,415

Adjustments:
 
 
 
 
 
 
Fully-taxable equivalent adjustments 1
 
1,557

 
1,477

 
1,018

Net interest income - FTE
 
$
17,801

 
$
16,898

 
$
16,433

 
 
 
 
 
 
 
Net interest margin
 
1.86
 %
 
1.89
 %
 
2.26
 %
Effect of fully-taxable equivalent adjustments 1
 
0.18
 %
 
0.18
 %
 
0.15
 %
Net interest margin - FTE
 
2.04
 %
 
2.07
 %
 
2.41
 %

1 Assuming a 21% tax rate
 
 







First Internet Bancorp
 
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measures
 
 
Amounts in thousands, except per share data
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Income before income taxes - GAAP
 
$
6,222

 
$
3,242

 
$
6,890

Adjustments:
 
 
 
 
 
 
           Write-down of other real estate owned
 

 
2,423

 

Adjusted income before income taxes
 
$
6,222

 
$
5,665

 
$
6,890

 
 
 
 
 
 
 
Income tax provision (benefit) - GAAP
 
$
526

 
$
(334
)
 
$
862

Adjustments:
 
 
 
 
 
 
           Write-down of other real estate owned
 

 
509

 

Adjusted income tax provision
 
$
526

 
$
175

 
$
862

 
 
 
 
 
 
 
Net income - GAAP
 
$
5,696

 
$
3,576

 
$
6,028

Adjustments:
 
 
 
 
 
 
           Write-down of other real estate owned
 

 
1,914

 

Adjusted net income
 
$
5,696

 
$
5,490

 
$
6,028

 
 
 
 
 
 
 
Diluted average common shares outstanding
 
10,230,531

 
10,275,040

 
8,542,363

 
 
 
 
 
 
 
Diluted earnings per share - GAAP
 
$
0.56

 
$
0.35

 
$
0.71

Adjustments:
 
 
 
 
 
 
           Effect of write-down of other real estate owned
 

 
0.18

 

Adjusted diluted earnings per share
 
$
0.56

 
$
0.53

 
$
0.71

 
 
 
 
 
 
 
Return on average assets
 
0.64
%
 
0.43
 %
 
0.87
%
           Effect of write-down of other real estate owned
 
0.00
%
 
0.23
%
 
0.00
%
Adjusted return on average assets
 
0.64
%
 
0.66
 %
 
0.87
%
 
 
 
 
 
 
 
Return on average shareholders' equity
 
7.91
%
 
4.89
 %
 
10.96
%
           Effect of write-down of other real estate owned
 
0.00
%
 
2.62
 %
 
0.00
%
Adjusted return on average shareholders' equity
 
7.91
%
 
7.51
 %
 
10.96
%
 
 
 
 
 
 
 
Return on average tangible common equity
 
8.04
%
 
4.98
 %
 
11.19
%
           Effect of write-down of other real estate owned
 
0.00
%
 
2.66
 %
 
0.00
%
Adjusted return on average tangible common equity
 
8.04
%
 
7.64
 %
 
11.19
%
 
 
 
 
 
 
 
Effective income tax rate
 
8.5
%
 
(10.3
)%
 
12.5
%
           Effect of write-down of other real estate owned
 
0.0
%
 
13.4
 %
 
0.0
%
Adjusted effective income tax rate
 
8.5
%
 
3.1
 %
 
12.5
%


(Back To Top)