FIRST INTERNET BANCORP ANNOUNCES YEAR-END EARNINGS
INDIANAPOLIS, IN (February 19, 2008) - First Internet Bancorp (“Bancorp”) today announced net income of $2,827,842 for the year ended December 31, 2007. Net income for the year increased $697,964 (33%) from the previous year. Earnings per share increased to $1.51 per share as of December 31, 2007 from $1.11 per share as of December 31, 2006.
In 2007, the Bancorp acquired Landmark Financial Corporation, providing the Bancorp a turnkey mortgage operation. The mortgage business is largely responsible for the Bancorp’s $874,271 (61%) increase in non-interest income as compared with prior year.
“The troubled mortgage market is making headlines every day,” noted Mr. David B. Becker, Chairman and CEO of First Internet Bancorp, “and, to date, the Bancorp has remained unaffected. To capitalize on the opportunity in mortgage lending, we will pursue selective expansion opportunities while keeping our focus on high quality loan originations."
Net interest income for the Bancorp increased by $1,855,834 (19%), over the previous year, primarily due to balance sheet growth; at December 31, 2007, the Bancorp held total assets of $557.9 million, a 15% increase over the prior year.
Provision for loan and lease losses decreased $453,338 (20%) from prior year results. Provision expense was favorably impacted by the recognition of a small number of significant loan loss recoveries collected in the current year. Despite this decrease in the provision expense, management believes that the allowance for loan and lease losses remains appropriate.
Increases in income were offset in part by increases in non interest expense of $2,243,494 (37%). Non-interest expenses were impacted by the acquisition and merger of the Landmark companies.
“The Landmark acquisition was never about cutting costs,” said Mr. Becker. “The organization was already operating lean, and because of the complementary nature of the operations we were able to achieve a smooth integration, retain key personnel, and serve customers with minimal disruption.”
As of December 31, 2007, the Bancorp held $461.6 million in deposits, a 20% increase over deposits as of December 31, 2006, while total loans increased by 14% to $352.5 million. The increase in cash equivalents and investment securities was larger at 74% and is viewed as a temporary situation until loan funding and other opportunities return cash and securities to targeted levels.
Speaking to the effect the current rate environment may have on 2008 earnings, Mr. Becker said, “We believe that 2008 will be a challenging year for banks. Declining rates put pressure on net interest margin. There is a high probability that First IB, like many banks, will experience some margin compression. As lower rates impact interest income, the degree of the decline will be influenced by the level of additional rate cuts. The best way to weather the storm will be to remain disciplined in both loan underwriting and in loan and deposit pricing.”
Selected Balance Sheet Information |
|
December 31 |
|
2006 |
|
2007 |
|
Cash Equivalents |
37,398,089 |
|
65,173,598 |
Investment Securities |
117,692,902 |
|
118,524,630 |
Loans, net of Reserve |
309,778,984 |
|
352,467,009 |
Bank owned life insurance |
6,688,565 |
|
6,968,068 |
Goodwill |
0 |
|
4,687,349 |
Other Assets |
11,975,878 |
|
10,080,420 |
|
Total Assets |
483,534,418 |
|
557,901,074 |
|
|
Deposits |
383,489,278 |
|
461,562,873 |
FHLB Advances |
55,700,000 |
|
48,700,000 |
Other Liabilities |
1,677,123 |
|
1,551,047 |
Shareholder's Equity |
42,668,017 |
|
46,087,154 |
|
Total Liabilities & Equity |
483,534,418 |
|
557,901,074 |
Selected Income Statement Information |
|
Year Ended December 31 |
|
2006 |
|
2007 |
|
Net Interest Income |
9,782,815 |
|
11,638,649 |
Non-Interest Income |
1,424,129 |
|
2,298,400 |
Provision for Loan and Lease Losses |
(2,255,237) |
|
(1,801,899) |
Non-Interest Expense |
(6,115,822) |
|
(8,359,316) |
|
Net Income Before Taxes |
2,835,885 |
|
3,775,834 |
|
Tax Expense |
(706,007) |
|
(947,992) |
|
Net Income |
2,129,878 |
|
2,827,842 |
|
|
|
|
Income per share: |
|
|
|
Basic |
1.11 |
|
1.51 |
Diluted |
1.11 |
|
1.50 |
Weighted average of shares outstanding: |
|
|
|
Basic |
1,912,725 |
|
1,866,793 |
Diluted |
1,919,333 |
|
1,879,550 |
About First Internet Bancorp
First Internet Bancorp, the parent company of First Internet Bank of Indiana and Landmark Mortgage Company, is privately capitalized with over 250 private and corporate investors. The Bancorp became effective March 21, 2006, and is listed on the OTC Bulletin Board (www.otcbb.com) under the symbol of "FIBP".
About First Internet Bank
With over $550 million in assets, First Internet Bank of Indiana (First IB) is the first state-chartered, FDIC-insured institution to operate solely via the Internet and has customers in all 50 states. Services include checking accounts, regular and money market savings accounts with industry-leading interest rates, CDs, and IRAs. First IB also offers credit cards, personal lines of credit, and installment loans. First IB is a wholly owned subsidiary of First Internet Bancorp.
About Landmark Mortgage Company
Landmark Mortgage Company operates from two locations in the metropolitan Indianapolis area providing various mortgage products and services to clients in central Indiana and beyond. Landmark Mortgage Company is a wholly owned subsidiary of First Internet Bancorp.
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