Press Release

First Internet Bancorp Reports First Quarter 2019 Results

Company Release - 4/24/2019 4:15 PM ET

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, 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 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.”

               

First Internet Bancorp

Summary Financial Information (unaudited)

Amounts in thousands, except per share data

 
Three Months Ended
March 31,   December 31,   March 31,
2019 2018 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, December 31, March 31,
2019 2018 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, December 31, March 31,
2019 2018 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 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 $ 2,774,852 $ 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, December 31, March 31,
2019 2018 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, December 31, March 31,
2019 2018 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 %

Investors/Analysts
Paula Deemer
Investor Relations
(317) 428-4628
investors@firstib.com

Media
Nicole Lorch
Executive Vice President & Chief Operating Officer
(317) 532-7906
nlorch@firstib.com

Source: First Internet Bancorp