Press Release

First Internet Bancorp Reports Third Quarter 2018 Results

Company Release - 10/24/2018 4:17 PM ET

Highlights for the third quarter include:

  • Net income of $6.3 million, an increase of 28.5% from the third quarter of 2017
  • Diluted earnings per share of $0.61
  • Total loans increased $625 million from September 30, 2017, or 33.5%, and $120 million from June 30, 2018, or 20.1% annualized
  • Net interest income of $16.0 million, an increase of 12.5% from the third quarter of 2017 and 3.3% from the second quarter of 2018

FISHERS, Ind.--(BUSINESS WIRE)-- First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the third quarter of 2018. Net income for the third quarter of 2018 was $6.3 million, or $0.61 diluted earnings per share. This compares to net income of $6.0 million, or $0.67 diluted earnings per share, for the second quarter of 2018, and net income of $4.9 million, or $0.71 diluted earnings per share, for the third quarter of 2017.

David Becker, Chairman, President and Chief Executive Officer, commented, “We are pleased with our results in the third quarter, driven by solid loan growth, excellent credit quality and well-managed expenses. We continue to take a disciplined approach to capital deployment and execute on our lending strategies, including our specialized areas of focus in public finance, healthcare and single tenant lease financing.

“Looking to the fourth quarter and into 2019, we see tremendous potential in our current business lines, and we continue to explore new opportunities to diversify our revenue channels,” Becker added. “Our entrepreneurial culture provides us a competitive advantage in attracting and retaining top talent – and that is key to our ongoing growth and success.”

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2018 was $16.0 million, an increase of 3.3% from $15.5 million for the second quarter of 2018. On a fully-taxable equivalent basis, net interest income for the third quarter was $17.3 million, an increase of 4.2% from $16.6 million for the second quarter. Relative to the third quarter of 2017, net interest income increased 12.5% from $14.2 million, and on a fully-taxable equivalent basis, increased 12.0% from $15.5 million.

Total interest income for the third quarter of 2018 was $30.2 million, an increase of 10.2% compared to the second quarter of 2018, and an increase of 33.2% compared to the third quarter of 2017. On a fully-taxable equivalent basis, total interest income for the third quarter was $31.6 million, an increase of 10.5% compared to the second quarter, and an increase of 31.7% compared to the third quarter of 2017. The increase in total interest income compared to the second quarter of 2018 was driven primarily by a $221.4 million increase in average interest-earning assets, combined with the effect of a 5 basis point increase in the yield earned on these assets.

Total interest expense for the third quarter of 2018 was $14.3 million, an increase of 19.2% compared to the second quarter of 2018, and an increase of 67.6% compared to the third quarter of 2017. The increase in total interest expense compared to the second quarter of 2018 was driven primarily by a $231.4 million increase in average interest-bearing deposit balances, combined with the effect of a 22 basis point increase in the cost of funds related to those deposits. The increase in deposit costs was partially offset by lower interest expenses related to advances from the Federal Home Loan Bank and subordinated debt.

Net interest margin (“NIM”) was 2.06% for the third quarter of 2018 compared to 2.17% for the second quarter of 2018 and 2.31% for the third quarter of 2017. On a fully-taxable equivalent basis, NIM decreased 10 basis points to 2.23% for the third quarter of 2018 from 2.33% for the second quarter of 2018 and was down from 2.52% for the third quarter of 2017. The decline in NIM was primarily due to the higher cost of funds during the quarter, partially offset by the higher yield on interest-earning assets as mentioned above.

Noninterest Income

Noninterest income for the third quarter of 2018 was $2.0 million compared to $2.2 million for the second quarter of 2018 and $3.1 million for the third quarter of 2017. The decrease of $0.2 million from the second quarter was primarily due to a decrease in revenue from mortgage banking activities as mandatory pipeline volumes were down compared to the second quarter of 2018.

Noninterest Expense

Noninterest expense for the third quarter of 2018 was $10.0 million, compared to $10.2 million for the second quarter of 2018 and $9.4 million for the third quarter of 2017. The decline from the second quarter was primarily due to lower salaries and employee benefits and other expenses. The decrease in salaries and employee benefits was driven by lower incentive compensation and medical claims experience. The decrease in other expenses was due mainly to lower costs related to other real estate owned properties.

Income Taxes

Income tax expense was $0.7 million for the third quarter of 2018, resulting in an effective tax rate of 10.6%, compared to $0.8 million and an effective tax rate of 11.5% for the second quarter of 2018 and $1.7 million and an effective tax rate of 25.7% for the third quarter of 2017. Income taxes continued to be positively impacted by the continued growth in the public finance portfolio, which increased the proportion of tax-exempt income relative to overall total pre-tax income.

Loans and Credit Quality

Total loans as of September 30, 2018 were $2.5 billion, an increase of $119.6 million, or 5.0%, compared to June 30, 2018 and $625.1 million, or 33.5%, compared to September 30, 2017. Total commercial loan balances were $1.8 billion as of September 30, 2018, an increase of $84.4 million, or 4.8%, compared to June 30, 2018 and $504.6 million, or 38.2%, compared to September 30, 2017. The growth in commercial loan balances was driven largely by production in public finance, healthcare finance and single tenant lease financing.

Total consumer loan balances were $661.9 million as of September 30, 2018, an increase of $35.7 million, or 5.7%, compared to June 30, 2018 and $118.3 million, or 21.8%, compared to September 30, 2017. The growth in consumer loan balances was primarily driven by increased draw-downs on residential construction loans and production in portfolio residential mortgages, trailers and recreational vehicles.

Credit quality remained solid as total delinquencies 30 days or more past due were 0.02% of total loans as of September 30, 2018, down from 0.03% as of June 30, 2018 and down from 0.05% as of September 30, 2017. Nonperforming loans to total loans was 0.01% as of September 30, 2018, flat from June 30, 2018 and down from 0.14% as of September 30, 2017.

The allowance for loan losses as a percentage of total loans was 0.67% as of September 30, 2018, compared to 0.68% as of June 30, 2018 and 0.75% as of September 30, 2017. The decline in the allowance as a percentage of total loans was primarily due to the continued growth in the public finance portfolio, as well as growth in the residential mortgage portfolio, as these loan categories generally have lower loss reserve factors than other loan types.

Net charge-offs of $0.2 million were recognized during the third quarter of 2018, resulting in net charge-offs to average loans of 0.04%, compared to 0.03% for the second quarter and 0.10% for the third quarter of 2017. The provision for loan losses in the third quarter was $0.9 million, compared to $0.7 million for the second quarter and $1.3 million for the third quarter of 2017. The increase in the provision for loan losses compared to the second quarter of 2018 was driven by the loan growth discussed above as well as slightly higher net charge-offs.

Balance Sheet Management

To increase asset sensitivity and reduce long term interest rate risk, the Company maintained its asset hedging strategy that was initiated in the fourth quarter of 2017. As of September 30, 2018, the Company had $338.2 million of notional value pay fixed / receive variable interest rate swaps in place to hedge public finance loans, representing 55.4% of total public finance loan balances outstanding. Additionally, the Company had $88.2 million of notional value pay fixed / receive variable interest rate swaps in place to hedge fixed rate investment securities, resulting in $426.4 million of notional value interest rate swaps in place at the end of the third quarter of 2018 to effectively convert long term fixed rate assets to variable rate and mitigate the impact of higher short term interest rates on deposit and funding costs.

The Company also maintained its liability hedging strategy using pay fixed / receive variable interest rate swaps, extending the duration of certain funding sources to lessen the impact of future short term interest and deposit rate increases. Short term FHLB advances and brokered variable rate money market deposits were previously converted to longer term fixed rates using interest rate swaps with a total notional value of $130.0 million, of which $60.0 million were forward starting swaps that became effective on October 1, 2018. Similar to the asset hedging strategy, these swaps are intended to improve asset sensitivity and reduce long term interest rate risk.

Capital

As of September 30, 2018, total shareholders’ equity was $287.7 million, increasing $5.7 million, or 2.0%, compared to June 30, 2018 primarily due to the net income earned during the quarter. Tangible book value per share increased to $27.80 as of September 30, 2018 from $27.25 as of June 30, 2018 and $25.70 as of September 30, 2017.

The following table presents the Company’s and the Banks’s regulatory and other capital ratios as of September 30, 2018.

 
As of September 30, 2018
Company   Bank
 
Total shareholders' equity to assets 1 8.98% 8.02%
Tangible common equity to tangible assets 1 8.85% 7.88%
Tier 1 leverage ratio 2 9.40% 8.42%
Common equity tier 1 capital ratio 2 13.14% 11.78%
Tier 1 capital ratio 2 13.14% 11.78%
Total risk-based capital ratio 2 15.38% 12.52%

1

 

This information represents a non-GAAP financial measure. For a discussion of non-GAAP financial measures, see the section below entitled "Non-GAAP Financial Measures."

2

Regulatory capital ratios are preliminary pending filing of the Company’s and the Bank’s regulatory reports.

 

Conference Call and Webcast

The Company will host a conference call and webcast at 12:00 p.m. Eastern Time on Thursday, October 25, 2018 to discuss its quarterly financial results. The call can be accessed via telephone at (888) 317-6016. A recorded replay can be accessed through November 25, 2018 by dialing (877) 344-7529; passcode: 10125208.

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 $3.2 billion as of September 30, 2018. 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.

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 “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 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 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 are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”

 
First Internet Bancorp
Summary Financial Information (unaudited)
Amounts in thousands, except per share data
               
Three Months Ended Nine Months Ended
 
September 30, June 30, September 30, September 30, September 30,
2018 2018 2017 2018 2017
 
Net income $ 6,288 $ 6,008 $ 4,895 $ 18,324 $ 11,728
 
Per share and share information
Earnings per share - basic $ 0.61 $ 0.67 $ 0.72 $ 1.99 $ 1.76
Earnings per share - diluted 0.61 0.67 0.71 1.98 1.75
Dividends declared per share 0.06 0.06 0.06 0.18 0.18
Book value per common share 28.26 27.71 26.26 28.26 26.26
Tangible book value per common share 27.80 27.25 25.70 27.80 25.70
Common shares outstanding 10,181,675 10,181,675 8,411,077 10,181,675 8,411,077
Average common shares outstanding:
Basic 10,261,967 8,909,913 6,834,011 9,230,149 6,656,160
Diluted 10,273,766 8,919,460 6,854,614 9,250,839 6,683,379
Performance ratios
Return on average assets 0.79 % 0.82 % 0.78 % 0.83 % 0.71 %
Return on average shareholders' equity 8.75 % 10.11 % 11.20 % 9.83 % 9.61 %
Return on average tangible common equity 8.89 % 10.31 % 11.51 % 10.02 % 9.89 %
Net interest margin 2.06 % 2.17 % 2.31 % 2.16 % 2.41 %
Net interest margin - FTE 1 2.23 % 2.33 % 2.52 % 2.32 % 2.57 %
Capital ratios 2
Total shareholders' equity to assets 8.98 % 9.05 % 8.39 % 8.98 % 8.39 %
Tangible common equity to tangible assets 8.85 % 8.92 % 8.22 % 8.85 % 8.22 %
Tier 1 leverage ratio 9.40 % 9.93 % 8.86 % 9.40 % 8.86 %
Common equity tier 1 capital ratio

13.14%

13.54 % 11.93 %

13.14%

11.93 %
Tier 1 capital ratio

13.14%

13.54 % 11.93 %

13.14%

11.93 %
Total risk-based capital ratio

15.38%

15.85 % 14.67 %

15.38%

14.67 %
Asset quality
Nonperforming loans $ 256 $ 285 $ 2,662 $ 256 $ 2,662
Nonperforming assets 5,304 5,335 7,855 5,304 7,855
Nonperforming loans to loans 0.01 % 0.01 % 0.14 % 0.01 % 0.14 %
Nonperforming assets to total assets 0.17 % 0.17 % 0.30 % 0.17 % 0.30 %
Allowance for loan losses to:
Loans 0.67 % 0.68 % 0.75 % 0.67 % 0.75 %
Nonperforming loans 6,525.0 % 5,632.6 % 529.2 % 6,525.0 % 529.2 %
Net charge-offs to average loans 0.04 % 0.03 % 0.10 % 0.04 % 0.05 %
Average balance sheet information
Loans $ 2,440,982 $ 2,278,415 $ 1,795,118 $ 2,292,472 $ 1,557,620
Total securities 483,900 480,713 507,873 483,257 494,632
Other earning assets 131,306 79,346 108,547 105,210 74,208
Total interest-earning assets 3,077,415 2,856,029 2,434,799 2,899,841 2,146,366
Total assets 3,148,230 2,921,540 2,492,751 2,965,709 2,199,864
Noninterest-bearing deposits 44,921 44,524 35,094 44,477 33,164
Interest-bearing deposits 2,368,472 2,137,045 1,839,943 2,204,501 1,629,421
Total deposits 2,413,393 2,181,569 1,875,037 2,248,978 1,662,585
Shareholders' equity 285,207 238,465 173,459 249,162 163,230

1

 

On a fully-taxable equivalent ("FTE") basis assuming a 21% tax rate in 2018 and a 35% tax rate in 2017

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,
2018 2018 2017
 
Assets
Cash and due from banks $ 3,517 $ 3,694 $ 4,509
Interest-bearing deposits 82,273 138,666 121,195
Securities available-for-sale, at fair value 468,997 460,822 492,468
Securities held-to-maturity, at amortized cost 20,200 19,203 19,212
Loans held-for-sale 23,493 20,672 45,487
Loans 2,493,622 2,374,035 1,868,487
Allowance for loan losses   (16,704 )   (16,053 )   (14,087 )
Net loans 2,476,918 2,357,982 1,854,400
Accrued interest receivable 14,472 14,540 9,366
Federal Home Loan Bank of Indianapolis stock 22,050 22,050 19,575
Cash surrender value of bank-owned life insurance 35,819 35,579 34,856
Premises and equipment, net 20,207 10,169 9,739
Goodwill 4,687 4,687 4,687
Other real estate owned 5,041 5,041 5,136
Accrued income and other assets   25,244     22,668     12,792  

Total assets

$ 3,202,918   $ 3,115,773   $ 2,633,422  
 
Liabilities
Noninterest-bearing deposits $ 42,750 $ 44,671 $ 33,734
Interest-bearing deposits   2,403,814     2,349,613     1,963,294  
Total deposits 2,446,564 2,394,284 1,997,028
Advances from Federal Home Loan Bank 425,160 390,167 365,180
Subordinated debt 33,837 33,800 36,689
Accrued interest payable 887 435 237
Accrued expenses and other liabilities   8,730     15,000     13,421  
Total liabilities   2,915,178     2,833,686     2,412,555  
Shareholders' equity
Voting common stock 227,454 227,099 171,783
Retained earnings 74,733 69,066 54,119
Accumulated other comprehensive loss   (14,447 )   (14,078 )   (5,035 )
Total shareholders' equity   287,740     282,087     220,867  
Total liabilities and shareholders' equity $ 3,202,918   $ 3,115,773   $ 2,633,422  
 
         
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,
2018 2018 2017 2018 2017
 
Interest income
Loans $ 26,019 $ 23,699 $ 18,922 $ 71,833 $ 49,494
Securities - taxable 2,659 2,556 2,582 7,703 7,515
Securities - non-taxable 698 700 697 2,109 2,090
Other earning assets   847   461   493   1,973   960
Total interest income   30,223   27,416   22,694   83,618   60,059
Interest expense
Deposits 11,650 9,226 6,594 29,146 16,617
Other borrowed funds   2,603   2,729   1,909   7,626   4,820
Total interest expense   14,253   11,955   8,503   36,772   21,437
Net interest income 15,970 15,461 14,191 46,846 38,622
Provision for loan losses   888   667   1,336   2,405   3,693

Net interest income after provision for loan losses

  15,082   14,794   12,855   44,441   34,929
Noninterest income
Service charges and fees 236 231 226 697 657
Mortgage banking activities 1,402 1,597 2,535 4,577 6,306
Gain on sale of loans - - - 414 -
Other   356   349   374   1,025   1,039
Total noninterest income   1,994   2,177   3,135   6,713   8,002
Noninterest expense
Salaries and employee benefits 5,704 5,827 5,197 17,436 15,463
Marketing, advertising and promotion 601 608 741 1,925 1,803
Consulting and professional fees 709 633 897 2,193 2,474
Data processing 368 282 247 913 729
Loan expenses 241 260 262 738 724
Premises and equipment 1,244 1,231 1,080 3,689 3,058
Deposit insurance premium 441 480 375 1,386 990
Other   737   861   602   2,164   1,781
Total noninterest expense   10,045   10,182   9,401   30,444   27,022
Income before income taxes 7,031 6,789 6,589 20,710 15,909
Income tax provision   743   781   1,694   2,386   4,181
Net income $ 6,288 $ 6,008 $ 4,895 $ 18,324 $ 11,728
 
Per common share data
Earnings per share - basic $ 0.61 $ 0.67 $ 0.72 $ 1.99 $ 1.76
Earnings per share - diluted $ 0.61 $ 0.67 $ 0.71 $ 1.98 $ 1.75
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, 2018 June 30, 2018 September 30, 2017
 
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 $ 2,462,209 $ 26,019 4.19 % $ 2,295,970 $ 23,699 4.14 % $ 1,818,379 $ 18,922 4.13 %
Securities - taxable 389,880 2,659 2.71 % 386,207 2,556 2.65 % 410,630 2,582 2.49 %
Securities - non-taxable 94,020 698 2.95 % 94,506 700 2.97 % 97,243 697 2.84 %
Other earning assets   131,306     847 2.56 %   79,346     461 2.33 %   108,547     493 1.80 %
Total interest-earning assets 3,077,415 30,223 3.90 % 2,856,029 27,416 3.85 % 2,434,799 22,694 3.70 %
 
Allowance for loan losses (16,312 ) (15,782 ) (13,657 )
Noninterest-earning assets   87,127     81,293     71,609  
Total assets $ 3,148,230   $ 2,921,540   $ 2,492,751  
 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits $ 87,102 $ 133 0.61 % $ 93,599 $ 145 0.62 % $ 88,633 $ 122 0.55 %
Savings accounts 51,557 147 1.13 % 55,273 158 1.15 % 42,308 97 0.91 %
Money market accounts 527,715 2,206 1.66 % 571,398 2,130 1.50 % 440,293 1,187 1.07 %
Certificates and brokered deposits   1,702,098     9,164 2.14 %   1,416,775     6,793 1.92 %   1,268,709     5,188 1.62 %
Total interest-bearing deposits 2,368,472 11,650 1.95 % 2,137,045 9,226 1.73 % 1,839,943 6,594 1.42 %
Other borrowed funds   439,412     2,603 2.35 %   492,068     2,729 2.22 %   431,738     1,909 1.75 %
Total interest-bearing liabilities 2,807,884 14,253 2.01 % 2,629,113 11,955 1.82 % 2,271,681 8,503 1.49 %
 
Noninterest-bearing deposits 44,921 44,524 35,094
Other noninterest-bearing liabilities   10,218     9,438     12,517  
Total liabilities 2,863,023 2,683,075 2,319,292
 
Shareholders' equity   285,207     238,465     173,459  
Total liabilities and shareholders' equity $ 3,148,230   $ 2,921,540   $ 2,492,751  
     
Net interest income $ 15,970 $ 15,461 $ 14,191
 
Interest rate spread 1.89 % 2.03 % 2.21 %
 
Net interest margin 2.06 % 2.17 % 2.31 %
 
Net interest margin - FTE 2 2.23 % 2.33 % 2.52 %

1

 

Includes nonaccrual loans

2

On a fully-taxable equivalent ("FTE") basis assuming a 21% tax rate in 2018 and a 35% tax rate in 2017

 
 
First Internet Bancorp
Average Balances and Rates (unaudited)
Amounts in thousands
     
  Nine Months Ended
         
September 30, 2018 September 30, 2017
 
Average Interest / Yield / Average Interest / Yield /
Balance Dividends Cost Balance Dividends Cost
 
Assets
Interest-earning assets
Loans, including loans held-for-sale 1 $ 2,311,374 $ 71,833 4.16 % $ 1,577,526 $ 49,494 4.19 %
Securities - taxable 388,513 7,703 2.65 % 399,284 7,515 2.52 %
Securities - non-taxable 94,744 2,109 2.98 % 95,348 2,090 2.93 %
Other earning assets   105,210     1,973 2.51 %   74,208     960 1.73 %
Total interest-earning assets 2,899,841 83,618 3.86 % 2,146,366 60,059 3.74 %
 
Allowance for loan losses (15,770 ) (12,451 )
Noninterest-earning assets   81,638     65,949  
Total assets $ 2,965,709   $ 2,199,864  
 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits $ 90,564 $ 401 0.59 % $ 89,869 $ 368 0.55 %
Savings accounts 54,245 462 1.14 % 35,113 210 0.80 %
Money market accounts 553,692 6,228 1.50 % 394,581 2,799 0.95 %
Certificates and brokered deposits   1,506,000     22,055 1.96 %   1,109,858     13,240 1.59 %
Total interest-bearing deposits 2,204,501 29,146 1.77 % 1,629,421 16,617 1.36 %
Other borrowed funds   457,807     7,626 2.23 %   364,738     4,820 1.77 %
Total interest-bearing liabilities 2,662,308 36,772 1.85 % 1,994,159 21,437 1.44 %
 
Noninterest-bearing deposits 44,477 33,164
Other noninterest-bearing liabilities   9,762     9,311  
Total liabilities 2,716,547 2,036,634
 
Shareholders' equity   249,162     163,230  
Total liabilities and shareholders' equity $ 2,965,709  

 

$ 2,199,864  
   
Net interest income $ 46,846 $ 38,622
 
Interest rate spread 2.01 % 2.30 %
 
Net interest margin 2.16 % 2.41 %
 
Net interest margin - FTE 2 2.32 % 2.57 %

1

 

Includes nonaccrual loans

2

On a fully-taxable equivalent ("FTE") basis assuming a 21% tax rate in 2018 and a 35% tax rate in 2017

 
First Internet Bancorp
Loans and Deposits (unaudited)
Amounts in thousands
                 
September 30, 2018 June 30, 2018 September 30, 2017
Amount Percent Amount Percent Amount Percent
 
Commercial loans
Commercial and industrial $ 105,489 4.2 % $ 107,394 4.5 % $ 122,587 6.5 %
Owner-occupied commercial real estate 93,568 3.8 % 86,068 3.6 % 75,986 4.1 %
Investor commercial real estate 5,595 0.2 % 6,185 0.3 % 7,430 0.4 %
Construction 38,228 1.5 % 46,769 2.0 % 50,367 2.7 %
Single tenant lease financing 883,372 35.4 % 863,981 36.4 % 783,918 41.9 %
Public finance 610,858 24.5 % 566,184 23.8 % 269,347 14.4 %
Healthcare finance   89,525 3.7 %   65,605 2.8 %   12,363 0.7 %
Total commercial loans 1,826,635 73.3 % 1,742,186 73.4 % 1,321,998 70.7 %
 
Consumer loans
Residential mortgage 362,574 14.5 % 337,143 14.2 % 291,382 15.6 %
Home equity 28,713 1.2 % 28,826 1.2 % 31,236 1.7 %
Trailers 129,571 5.2 % 120,957 5.1 % 97,811 5.2 %
Recreational vehicles 85,821 3.4 % 79,946 3.4 % 66,619 3.6 %
Other consumer loans   55,175 2.2 %   59,261 2.5 %   56,490 3.0 %
Total consumer loans 661,854 26.5 % 626,133 26.4 % 543,538 29.1 %
 
Net deferred loan fees, premiums and discounts 5,133 0.2 % 5,716 0.2 % 2,951 0.2 %
           
Total loans $ 2,493,622 100.0 % $ 2,374,035 100.0 % $ 1,868,487 100.0 %
 
 
September 30, 2018 June 30, 2018 September 30, 2017
Amount Percent Amount Percent Amount Percent
 
Deposits
Noninterest-bearing deposits $ 42,750 1.7 % $ 44,671 1.9 % $ 33,734 1.7 %
Interest-bearing demand deposits 94,681 3.9 % 91,748 3.8 % 89,748 4.5 %
Savings accounts 47,033 1.9 % 48,897 2.1 % 49,913 2.5 %
Money market accounts 478,548 19.6 % 582,565 24.3 % 499,160 25.0 %
Certificates of deposits 1,252,690 51.2 % 1,231,438 51.4 % 1,300,952 65.1 %
Brokered deposits 1 530,862 21.7 % 394,965 16.5 % 23,521 1.2 %
           
Total deposits $ 2,446,564 100.0 % $ 2,394,284 100.0 % $ 1,997,028 100.0 %

1

 

As of March 31, 2018, $116.3 million of public fund deposits originated through an investment advisor who manages fixed income portfolios for municipalities were reclassified from certificates of deposit to brokered deposits per regulatory guidance.

 
         
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,
2018 2018 2017 2018 2017
 
Total equity - GAAP $ 287,740 $ 282,087 $ 220,867 $ 287,740 $ 220,867
Adjustments:
Goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Tangible common equity $ 283,053   $ 277,400   $ 216,180   $ 283,053   $ 216,180  
 
Total assets - GAAP $ 3,202,918 $ 3,115,773 $ 2,633,422 $ 3,202,918 $ 2,633,422
Adjustments:
Goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Tangible assets $ 3,198,231   $ 3,111,086   $ 2,628,735   $ 3,198,231   $ 2,628,735  
 
Common shares outstanding 10,181,675 10,181,675 8,411,077 10,181,675 8,411,077
 
Book value per common share $ 28.26 $ 27.71 $ 26.26 $ 28.26 $ 26.26
Effect of goodwill   (0.46 )   (0.46 )   (0.56 )   (0.46 )   (0.56 )
Tangible book value per common share $ 27.80   $ 27.25   $ 25.70   $ 27.80   $ 25.70  
 
Total shareholders' equity to assets ratio 8.98 % 9.05 % 8.39 % 8.98 % 8.39 %
Effect of goodwill   (0.13 %)   (0.13 %)   (0.17 %)   (0.13 %)   (0.17 %)
Tangible common equity to tangible assets ratio   8.85 %   8.92 %   8.22 %   8.85 %   8.22 %
 
Total average equity - GAAP $ 285,207 $ 238,465 $ 173,459 $ 249,162 $ 163,230
Adjustments:
Average goodwill   (4,687 )   (4,687 )   (4,687 )   (4,687 )   (4,687 )
Average tangible common equity $ 280,520   $ 233,778   $ 168,772   $ 244,475   $ 158,543  
 
Return on average shareholders' equity 8.75 % 10.11 % 11.20 % 9.83 % 9.61 %
Effect of goodwill   0.14 %   0.20 %   0.31 %   0.19 %   0.28 %
Return on average tangible common equity   8.89 %   10.31 %   11.51 %   10.02 %   9.89 %
 
Total interest income $ 30,223 $ 27,416 $ 22,694 $ 83,618 $ 60,059
Adjustments:
Fully-taxable equivalent adjustments 1   1,351     1,164     1,280     3,533     2,586  
Total interest income - FTE $ 31,574   $ 28,580   $ 23,974   $ 87,151   $ 62,645  
 
Net interest income $ 15,970 $ 15,461 $ 14,191 $ 46,846 $ 38,622
Adjustments:
Fully-taxable equivalent adjustments 1   1,351     1,164     1,280     3,533     2,586  
Net interest income - FTE $ 17,321   $ 16,625   $ 15,471   $ 50,379   $ 41,208  
 
Net interest margin 2.06 % 2.17 % 2.31 % 2.16 % 2.41 %
Effect of fully-taxable equivalent adjustments 1   0.17 %   0.16 %   0.21 %   0.16 %   0.16 %
Net interest margin - FTE   2.23 %   2.33 %   2.52 %   2.32 %   2.57 %

1

 

Assuming a 21% tax rate in 2018 and a 35% tax rate in 2017

First Internet Bancorp
Investors/Analysts:
Paula Deemer, 317-428-4628
Investor Relations
investors@firstib.com
or
Media:
Nicole Lorch, 317-532-7906
Executive Vice President & Chief Operating Officer
nlorch@firstib.com

Source: First Internet Bancorp