Press Release

First Internet Bancorp Reports First Quarter 2020 Results

Company Release - 4/22/2020 4:52 PM ET

Highlights for the first quarter include:

  • Diluted earnings per share of $0.62, an increase of 10.7% over first quarter of 2019
  • Net income of $6.0 million, an increase of 5.7% over first quarter of 2019
  • Total revenue of $21.2 million, an increase of 14.0% over first quarter of 2019, driven by strong mortgage banking activity
  • Total loans of $2.9 billion, up 1.8% from the first quarter of 2019

COVID-19 Response:

  • Ensuring the health and safety of our employees through alternative work practices, expanded benefits and enhanced engagement programs
  • Supporting our customers through payment deferral programs
  • Enrolling customers in the SBA Paycheck Protection Program
    • As of April 16, 2020, have received approvals from the SBA for 268 loans totaling $45.0 million

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 2020. Net income for the first quarter of 2020 was $6.0 million, or $0.62 diluted earnings per share. This compares to net income of $7.1 million, or $0.72 diluted earnings per share, for the fourth quarter of 2019, and net income of $5.7 million, or $0.56 diluted earnings per share, for the first quarter of 2019.

“The current public health crisis confronting our country has required a dramatic shift in our operations as well as in those of our customers,” said David Becker, Chairman, President and Chief Executive Officer. “Our most important priority in this unprecedented environment is the health of our team, customers and shareholders.

“While the duration of the coronavirus pandemic still remains unknown, we have the financial strength to serve our valued customers throughout this difficult period.

“We have proactively implemented a payment deferral program that allows impacted clients to preserve cash and liquidity. Additionally, our lending teams have been enrolling small business clients in the SBA Paycheck Protection Program, which will provide much needed capital and liquidity to many of our small business entrepreneurs. As of April 16, we had received approvals from the SBA for 268 loans totaling $45.0 million. This was accomplished in 10 days through an all-hands-on-deck effort by the First Internet team, who have been working tirelessly for our customers.

Chairman Becker added, “I am pleased with our first quarter financial performance as well as our efforts to date in April. I thank the entire First Internet team for their resilience and dedication during these challenging times. The high level of engagement throughout the organization remains the key to our ongoing success.”

Net Interest Income and Net Interest Margin

Net interest income for the first quarter of 2020 was $15.0 million, compared to $15.4 million for the fourth quarter of 2019 and $16.2 million for the first quarter of 2019. On a fully-taxable equivalent basis, net interest income for the first quarter was $16.6 million, compared to $17.0 million for the fourth quarter of 2019 and $17.8 million for the first quarter of 2019.

Total interest income for the first quarter of 2020 was $36.2 million, a decrease of 4.3%, compared to the fourth quarter of 2019, and an increase of 3.6% compared to the first quarter of 2019. On a fully-taxable equivalent basis, total interest income for the first quarter was $37.8 million, a decrease of 4.3% compared to the fourth quarter of 2019, and an increase of 3.4% compared to the first quarter of 2019. The decline in total interest income compared to the fourth quarter of 2019 was driven primarily by an 11 basis point (“bp”) decrease in the yield on average interest-earning assets, as the average balance of those assets was down slightly quarter-over-quarter. The yield on interest-earning assets for the first quarter of 2020 declined to 3.62% from 3.73% in the prior quarter due primarily to the decline in short term rates during the quarter following the Federal Reserve rate cut in the fourth quarter of 2019 and additional rate cuts during the first quarter of 2020, which negatively impacted the yields earned on variable rate loans and securities as well as cash balances, which remained elevated throughout the quarter.

Total interest expense for the first quarter of 2020 was $21.2 million, a decrease of 5.7% compared to the fourth quarter of 2019, and an increase of 13.2% compared to the first quarter of 2019. The decrease in interest expense compared to the linked quarter was due mainly to a decline of 11 bps in the cost of interest-bearing deposits and a decrease of $21.5 million, or 0.6%, in the average balance of these deposits. The decrease in average interest-bearing deposit balances was due primarily to a $132.1 million, or 6.0%, decrease in the average balance of certificates and brokered deposits but was partially offset by a $113.7 million, or 15.1%, increase in the average balance of money market accounts. The decrease in deposit costs reflects a decline in the rates paid on money market accounts and certificates and brokered deposits as well as a shift in the deposit mix due to the growth in money market accounts. During the first quarter of 2020, the cost of money market deposits decreased by 18 bps and the cost of certificates and brokered deposits decreased 4 bps as rates paid on new production and renewals were below the rates paid on maturing time deposits.

Net interest margin (“NIM”) was 1.50% for the first quarter of 2020, compared to 1.51% for the fourth quarter of 2019 and 1.86% for the first quarter of 2019. On a fully-taxable equivalent basis, NIM decreased 2 bps to 1.65% for the first quarter of 2020, from 1.67% for the fourth quarter of 2019, and was down from 2.04% for the first quarter of 2019. The decrease in fully-taxable equivalent NIM compared to the linked quarter was due mainly to the decline in loan yields, which had a negative impact of 7 bps, and the lower yields earned on elevated cash balances, which had a negative impact of 5 bps. Additionally, other interest-earning assets and other interest-bearing liabilities had a combined negative impact of 2 bps. These were partially offset by deposit costs and the securities portfolio, which had a positive impact of 9 bps and 3 bps, respectively.

Noninterest Income

Noninterest income for the first quarter of 2020 was $6.2 million, up from $5.4 million for the fourth quarter of 2019, and up from $2.4 million for the first quarter of 2019. The increase compared to the fourth quarter of 2019 was driven primarily by an increase in revenue from mortgage banking activities, the gain on sale of loans sold during the quarter and loan servicing revenue, but partially offset by a decrease in the valuation of the servicing asset. The increase in mortgage banking revenue of $0.7 million, or 24.2%, was due mainly to an increase in origination volumes as mortgage interest rates continued to decline during the quarter. During the first quarter of 2020, the Company sold $99.9 million of public finance, single tenant lease financing and U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans at premiums to book value. The Company also sold $90.8 million of portfolio residential mortgage loans, which included seasoned lower-yielding loans, at a modest discount to book value. Related to the increase in loan servicing revenue, the Company earned a full quarter’s worth of revenue from the SBA servicing portfolio acquired during the fourth quarter of 2019, which was partially offset by the loan servicing asset revaluation recognized during the quarter.

Noninterest Expense

Noninterest expense for the first quarter of 2020 was $13.5 million, compared to $12.6 million for the fourth quarter of 2019 and $11.1 million for the first quarter of 2019. The increase from the fourth quarter of 2019 was due primarily to a $0.6 million increase in salaries and employee benefits and a $0.3 million increase in loan expenses, but partially offset by a $0.1 million decrease in deposit insurance premium. The increase of $0.6 million in salaries and employee benefits was due mainly to seasonal resets of employee benefits and incentive compensation accruals, an increase in headcount which includes a full quarter’s impact of personnel growth in the Company’s small business lending platform and higher mortgage incentive compensation. The increase of $0.3 million in loan expenses was driven primarily by costs associated with nonperforming loans. The decline in deposit insurance premium was due primarily to a decline in the Bank’s one-year asset growth rate which is a component of the formula used to determine the premium amount.

Income Taxes

The Company reported income tax expense of $0.3 million for the first quarter of 2020 and an effective tax rate of 4.2%, compared to income tax expense of $0.6 million and an effective tax rate of 7.8% for the fourth quarter of 2019 and income tax expense of $0.5 million and an effective tax rate of 8.5% for the first quarter of 2019. Compared to the linked quarter, the decline in income tax expense and the effective tax rate was primarily due to a tax law change associated with the Coronavirus Aid, Relief and Economic Security (“CARES”) Act that now allows recognition of certain prior period net operating losses, partially offset by tax expense associated with the annual vesting of equity compensation.

Loans and Credit Quality

Total loans as of March 31, 2020 were $2.9 billion, a decrease of $71.5 million, or 2.4%, compared to December 31, 2019 and an increase of $52.2 million, or 1.8%, compared to March 31, 2019. Total commercial loan balances were $2.3 billion as of March 31, 2020, consistent with December 31, 2019 and an increase of $190.9 million, or 9.1%, compared to March 31, 2019. Compared to the linked quarter, production in healthcare finance, small business lending and construction was offset by lower balances in the single tenant lease financing and public finance loan portfolios due primarily to sales of $94.4 million of loans in these categories during the quarter.

Total consumer loan balances were $539.2 million as of March 31, 2020, a decrease of $94.3 million, or 14.9%, compared to December 31, 2019 and a decrease of $178.7 million, or 24.9%, compared to March 31, 2019. The decline in consumer loan balances from December 31, 2019 was due primarily to the sale of $90.8 million of portfolio residential mortgage loans, which included seasoned lower-yielding loans.

Total delinquencies 30 days or more past due increased to 0.32% of total loans as of March 31, 2020, up from 0.24% as of December 31, 2019 and 0.18% as of March 31, 2019. The increase in delinquencies compared to the linked quarter was due primarily to a residential mortgage loan with a balance of $0.9 million and a commercial real estate loan with a balance of $0.7 million becoming past due. Overall credit quality remained relatively stable as nonperforming loans to total loans was 0.26% as of March 31, 2020, compared to 0.23% at December 31, 2019 and 0.12% as of March 31, 2019.

The allowance for loan losses as a percentage of total loans was 0.79% as of March 31, 2020, compared to 0.74% as of December 31, 2019 and 0.66% as of March 31, 2019. While total loan balances declined $71.5 million, or 2.4%, compared to the linked quarter, the Company made adjustments to qualitative factors related to economic conditions in its allowance model to reflect the economic uncertainty resulting from the COVID-19 pandemic crisis. As a result, both the amount of the allowance for loan losses and the allowance as a percentage of total loans increased compared to December 31, 2019.

Net charge-offs of $0.4 million were recognized during the first quarter of 2020, resulting in net charge-offs to average loans of 0.06%, compared to 0.04% for the fourth quarter of 2019 and 0.05% for the first quarter of 2019. The provision for loan losses in the first quarter of 2020 was $1.5 million, compared to $0.5 million for the fourth quarter of 2019 and $1.3 million for the first quarter of 2019. The increase of $1.0 million, or 212.2%, compared to the linked quarter was due primarily to the adjustments to the economic qualitative factors in the allowance model discussed above.

Capital

As of March 31, 2020, total shareholders’ equity was $305.1 million, an increase of $0.2 million, or 0.1%, compared to December 31, 2019, primarily due to the net income earned during the quarter, partially offset by an increase in accumulated other comprehensive loss due to the net impact of fair value adjustments to the securities portfolio and interest rate swaps designated as cash flow hedges used for long term funding purposes. As a result of the COVID-19 pandemic crisis, the fixed income and interest rate markets experienced a significant level of volatility during March 2020 which negatively impacted the fair values of these financial instruments. Book value per common share decreased slightly to $31.13 as of March 31, 2020, down from $31.30 as of December 31, 2019 and up from $29.03 as of March 31, 2019. Tangible book value per share at March 31, 2020 was $30.65, down from $30.82 and up from $28.57, each as of the same reference dates.

The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of March 31, 2020.

As of March 31, 2020

Company

Bank

 

Total shareholders' equity to assets

7.32%

8.03%

Tangible common equity to tangible assets 1

7.22%

7.93%

Tier 1 leverage ratio 2

7.82%

8.54%

Common equity tier 1 capital ratio 2

10.78%

11.79%

Tier 1 capital ratio 2

10.78%

11.79%

Total risk-based capital ratio 2

13.90%

12.56%

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 23, 2020 to discuss its quarterly financial results. The call can be accessed via telephone at (888) 348-3664. A recorded replay can be accessed through May 23, 2020 by dialing (877) 344-7529; passcode: 10142059.

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 $4.2 billion as of March 31, 2020. 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 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, timing of pending acquisitions, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “pending,” “plan,” “position,” “preliminary,” “remain,” “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. The COVID-19 pandemic crisis is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects remains uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Other 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, SBA 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; failure to close any pending acquisitions; failure to satisfy or waive closing condition; 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)
Dollar amounts in thousands, except per share data
 
 

Three Months Ended

March 31,

 

December 31,

 

March 31,

2020

 

2019

 

2019

 
Net income

$

6,019

$

7,096

$

5,696

 
Per share and share information
Earnings per share - basic

$

0.62

$

0.72

$

0.56

Earnings per share - diluted

 

0.62

 

0.72

 

0.56

Dividends declared per share

 

0.06

 

0.06

 

0.06

Book value per common share

 

31.13

 

31.30

 

29.03

Tangible book value per common share 1

 

30.65

 

30.82

 

28.57

Common shares outstanding

 

9,801,825

 

9,741,800

 

10,128,587

Average common shares outstanding:
Basic

 

9,721,485

 

9,825,784

 

10,217,637

Diluted

 

9,750,528

 

9,843,829

 

10,230,531

Performance ratios
Return on average assets

 

0.59%

 

0.69%

 

0.64%

Return on average shareholders' equity

 

7.78%

 

9.46%

 

7.91%

Return on average tangible common equity 1

 

7.90%

 

9.61%

 

8.04%

Net interest margin

 

1.50%

 

1.51%

 

1.86%

Net interest margin - FTE 1,2

 

1.65%

 

1.67%

 

2.04%

Capital ratios 3
Total shareholders' equity to assets

 

7.32%

 

7.44%

 

8.01%

Tangible common equity to tangible assets 1

 

7.22%

 

7.33%

 

7.89%

Tier 1 leverage ratio

 

7.82%

 

7.64%

 

8.34%

Common equity tier 1 capital ratio

10.78%

 

10.84%

 

11.66%

Tier 1 capital ratio

10.78%

 

10.84%

 

11.66%

Total risk-based capital ratio

13.90%

 

13.99%

 

13.68%

Asset quality
Nonperforming loans

$

7,443

$

6,732

$

3,432

Nonperforming assets

 

9,622

 

8,872

 

6,071

Nonperforming loans to loans

 

0.26%

 

0.23%

 

0.12%

Nonperforming assets to total assets

 

0.23%

 

0.22%

 

0.17%

Allowance for loan losses to:
Loans

 

0.79%

 

0.74%

 

0.66%

Nonperforming loans

 

307.1%

 

324.4%

 

549.0%

Net charge-offs to average loans

 

0.06%

 

0.04%

 

0.05%

Average balance sheet information
Loans

$

2,931,108

$

2,936,144

$

2,760,164

Total securities

 

630,879

 

597,049

 

523,265

Other earning assets

 

415,927

 

452,945

 

246,732

Total interest-earning assets

 

4,024,800

 

4,031,327

 

3,544,849

Total assets

 

4,099,932

 

4,108,216

 

3,627,508

Noninterest-bearing deposits

 

60,456

 

49,570

 

42,551

Interest-bearing deposits

 

3,089,045

 

3,110,501

 

2,728,674

Total deposits

 

3,149,501

 

3,160,071

 

2,771,225

Shareholders' equity

 

311,005

 

297,623

 

291,883

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, 2019)
Amounts in thousands
 

March 31,

 

December 31,

 

March 31,

2020

 

2019

 

2019

 
Assets
Cash and due from banks

$

5,726

 

$

5,061

 

$

5,708

 

Interest-bearing deposits

 

345,542

 

 

322,300

 

 

124,786

 

Securities available-for-sale, at fair value

 

608,682

 

 

540,852

 

 

520,382

 

Securities held-to-maturity, at amortized cost

 

66,331

 

 

61,878

 

 

31,222

 

Loans held-for-sale

 

52,394

 

 

56,097

 

 

13,706

 

Loans

 

2,892,093

 

 

2,963,547

 

 

2,839,928

 

Allowance for loan losses

 

(22,857

)

 

(21,840

)

 

(18,841

)

Net loans

 

2,869,236

 

 

2,941,707

 

 

2,821,087

 

Accrued interest receivable

 

16,960

 

 

18,607

 

 

17,217

 

Federal Home Loan Bank of Indianapolis stock

 

25,650

 

 

25,650

 

 

23,625

 

Cash surrender value of bank-owned life insurance

 

37,238

 

 

37,002

 

 

36,293

 

Premises and equipment, net

 

18,883

 

 

14,630

 

 

13,737

 

Goodwill

 

4,687

 

 

4,687

 

 

4,687

 

Servicing asset

 

2,415

 

 

2,481

 

 

-

 

Other real estate owned

 

2,065

 

 

2,065

 

 

2,619

 

Accrued income and other assets

 

112,337

 

 

67,066

 

 

55,107

 

Total assets

$

4,168,146

 

$

4,100,083

 

$

3,670,176

 

 
Liabilities
Noninterest-bearing deposits

$

70,562

 

$

57,115

 

$

45,878

 

Interest-bearing deposits

 

3,107,944

 

 

3,096,848

 

 

2,765,230

 

Total deposits

 

3,178,506

 

 

3,153,963

 

 

2,811,108

 

Advances from Federal Home Loan Bank

 

514,911

 

 

514,910

 

 

495,146

 

Subordinated debt

 

69,605

 

 

69,528

 

 

33,911

 

Accrued interest payable

 

3,293

 

 

3,767

 

 

1,549

 

Accrued expenses and other liabilities

 

96,704

 

 

53,002

 

 

34,449

 

Total liabilities

 

3,863,019

 

 

3,795,170

 

 

3,376,163

 

Shareholders' equity

Voting common stock

 

219,893

 

 

219,423

 

 

226,235

 

Retained earnings

 

105,100

 

 

99,681

 

 

81,946

 

Accumulated other comprehensive loss

 

(19,866

)

 

(14,191

)

 

(14,168

)

Total shareholders' equity

 

305,127

 

 

304,913

 

 

294,013

 

Total liabilities and shareholders' equity

$

4,168,146

 

$

4,100,083

 

$

3,670,176

 

 
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,

2020

 

2019

 

2019

 
Interest income
Loans

$

30,408

 

$

31,574

$

29,218

 

Securities - taxable

 

3,619

 

 

3,475

 

3,324

 

Securities - non-taxable

 

572

 

 

604

 

684

 

Other earning assets

 

1,645

 

 

2,224

 

1,773

 

Total interest income

 

36,244

 

 

37,877

 

34,999

 

Interest expense
Deposits

 

17,208

 

 

18,417

 

15,386

 

Other borrowed funds

 

4,018

 

 

4,086

 

3,369

 

Total interest expense

 

21,226

 

 

22,503

 

18,755

 

Net interest income

 

15,018

 

 

15,374

 

16,244

 

Provision for loan losses

 

1,461

 

 

468

 

1,285

 

Net interest income after provision
for loan losses

 

13,557

 

 

14,906

 

14,959

 

Noninterest income
Service charges and fees

 

212

 

 

213

 

236

 

Loan servicing revenue

 

251

 

 

166

 

-

 

Loan servicing asset revaluation

 

(179

)

 

-

 

-

 

Mortgage banking activities

 

3,668

 

 

2,953

 

1,617

 

Gain (loss) on sale of loans

 

1,801

 

 

1,721

 

(104

)

Gain on sale of securities

 

41

 

 

-

 

-

 

Other

 

417

 

 

352

 

623

 

Total noninterest income

 

6,211

 

 

5,405

 

2,372

 

Noninterest expense
Salaries and employee benefits

 

7,774

 

 

7,168

 

6,321

 

Marketing, advertising and promotion

 

375

 

 

409

 

469

 

Consulting and professional fees

 

1,177

 

 

1,242

 

814

 

Data processing

 

375

 

 

312

 

317

 

Loan expenses

 

599

 

 

289

 

314

 

Premises and equipment

 

1,625

 

 

1,556

 

1,500

 

Deposit insurance premium

 

485

 

 

601

 

555

 

Other

 

1,076

 

 

1,036

 

819

 

Total noninterest expense

 

13,486

 

 

12,613

 

11,109

 

Income before income taxes

 

6,282

 

 

7,698

 

6,222

 

Income tax provision

 

263

 

 

602

 

526

 

Net income

$

6,019

 

$

7,096

$

5,696

 

 
Per common share data
Earnings per share - basic

$

0.62

 

$

0.72

$

0.56

 

Earnings per share - diluted

$

0.62

 

$

0.72

$

0.56

 

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)
Dollar amounts in thousands
 
 
Three Months Ended
 
March 31, 2020December 31, 2019March 31, 2019
AverageInterest /Yield /AverageInterest /Yield /AverageInterest /Yield /
BalanceDividendsCostBalanceDividendsCostBalanceDividendsCost
 
Assets
Interest-earning assets
Loans, including loans held-for-sale 1

$

2,977,994

 

$

30,408

4.11

%

$

2,981,333

 

$

31,574

4.20

%

$

2,774,852

 

$

29,218

4.27

%

Securities - taxable

 

531,046

 

 

3,619

2.74

%

 

497,739

 

 

3,475

2.77

%

 

429,020

 

 

3,324

3.14

%

Securities - non-taxable

 

99,833

 

 

572

2.30

%

 

99,310

 

 

604

2.41

%

 

94,245

 

 

684

2.94

%

Other earning assets

 

415,927

 

 

1,645

1.59

%

 

452,945

 

 

2,224

1.95

%

 

246,732

 

 

1,773

2.91

%

Total interest-earning assets

 

4,024,800

 

 

36,244

3.62

%

 

4,031,327

 

 

37,877

3.73

%

 

3,544,849

 

 

34,999

4.00

%

 
Allowance for loan losses

 

(22,059

)

 

(21,967

)

 

(18,229

)

Noninterest-earning assets

 

97,191

 

 

98,856

 

 

100,888

 

Total assets

$

4,099,932

 

$

4,108,216

 

$

3,627,508

 

 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits

$

122,925

 

$

219

0.72

%

$

122,031

 

$

223

0.73

%

$

109,453

 

$

212

0.79

%

Savings accounts

 

30,345

 

 

78

1.03

%

 

34,298

 

 

94

1.09

%

 

38,853

 

 

108

1.13

%

Money market accounts

 

866,605

 

 

3,743

1.74

%

 

752,941

 

 

3,653

1.92

%

 

563,106

 

 

2,752

1.98

%

Certificates and brokered deposits

 

2,069,170

 

 

13,168

2.56

%

 

2,201,231

 

 

14,447

2.60

%

 

2,017,262

 

 

12,314

2.48

%

Total interest-bearing deposits

 

3,089,045

 

 

17,208

2.24

%

 

3,110,501

 

 

18,417

2.35

%

 

2,728,674

 

 

15,386

2.29

%

Other borrowed funds

 

584,465

 

 

4,018

2.76

%

 

584,386

 

 

4,086

2.77

%

 

540,705

 

 

3,369

2.53

%

Total interest-bearing liabilities

 

3,673,510

 

 

21,226

2.32

%

 

3,694,887

 

 

22,503

2.42

%

 

3,269,379

 

 

18,755

2.33

%

 
Noninterest-bearing deposits

 

60,456

 

 

49,570

 

 

42,551

 

Other noninterest-bearing liabilities

 

54,961

 

 

66,136

 

 

23,695

 

Total liabilities

 

3,788,927

 

 

3,810,593

 

 

3,335,625

 

 
Shareholders' equity

 

311,005

 

 

297,623

 

 

291,883

 

Total liabilities and shareholders' equity

$

4,099,932

 

$

4,108,216

 

$

3,627,508

 

 
Net interest income

$

15,018

$

15,374

$

16,244

Interest rate spread

1.30

%

1.31

%

1.67

%

Net interest margin

1.50

%

1.51

%

1.86

%

Net interest margin - FTE 2,3

1.65

%

1.67

%

2.04

%

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)
Dollar amounts in thousands
 
 
March 31, 2020December 31, 2019March 31, 2019
AmountPercentAmountPercentAmountPercent
 
Commercial loans
Commercial and industrial

$

95,227

3.3

%

$

96,420

3.3

%

$

110,560

3.8

%

Owner-occupied commercial real estate

 

74,737

2.6

%

 

73,392

2.5

%

 

75,317

2.7

%

Investor commercial real estate

 

13,421

0.5

%

 

12,567

0.4

%

 

11,188

0.4

%

Construction

 

64,581

2.2

%

 

60,274

2.0

%

 

42,319

1.5

%

Single tenant lease financing

 

972,275

33.6

%

 

995,879

33.6

%

 

975,841

34.3

%

Public finance

 

627,678

21.7

%

 

687,094

23.2

%

 

708,816

25.0

%

Healthcare finance

 

372,266

12.9

%

 

300,612

10.1

%

 

158,796

5.6

%

Small business lending

 

67,275

2.3

%

 

61,121

2.1

%

 

13,751

0.5

%

Total commercial loans

 

2,287,460

79.1

%

 

2,287,359

77.2

%

 

2,096,588

73.8

%

 
Consumer loans
Residential mortgage

 

218,730

7.6

%

 

313,849

10.6

%

 

404,869

14.3

%

Home equity

 

23,855

0.8

%

 

24,306

0.8

%

 

27,794

1.0

%

Trailers

 

148,700

5.1

%

 

146,734

5.0

%

 

140,548

4.9

%

Recreational vehicles

 

103,868

3.6

%

 

102,702

3.5

%

 

95,871

3.4

%

Other consumer loans

 

44,037

1.5

%

 

45,873

1.5

%

 

48,840

1.7

%

Total consumer loans

 

539,190

18.6

%

 

633,464

21.4

%

 

717,922

25.3

%

Net deferred loan fees, premiums, discounts and other 1

 

65,443

2.3

%

 

42,724

1.4

%

 

25,418

0.9

%

 
Total loans

$

2,892,093

100.0

%

$

2,963,547

100.0

%

$

2,839,928

100.0

%

 
 
March 31, 2020December 31, 2019March 31, 2019
 
AmountPercentAmountPercentAmountPercent
 
Deposits
Noninterest-bearing deposits

$

70,562

2.2

%

$

57,115

1.8

%

$

45,878

1.6

%

Interest-bearing demand deposits

 

123,233

3.9

%

 

129,020

4.1

%

 

111,626

4.0

%

Savings accounts

 

32,485

1.0

%

 

29,616

0.9

%

 

41,958

1.5

%

Money market accounts

 

930,698

29.3

%

 

786,390

24.9

%

 

573,895

20.4

%

Certificates of deposits

 

1,493,644

47.0

%

 

1,613,453

51.2

%

 

1,464,543

52.1

%

Brokered deposits

 

527,884

16.6

%

 

538,369

17.1

%

 

573,208

20.4

%

Total deposits

$

3,178,506

100.0

%

$

3,153,963

100.0

%

$

2,811,108

100.0

%

1

Includes carrying value adjustments of $44.6 million, $21.4 million and $11.5 million as of March 31, 2020, December 31, 2019 and March 31, 2019, respectively, related to interest rate swaps associated with public finance loans.
First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
 
 

Three Months Ended

March 31,

 

December 31,

 

March 31,

2020

 

2019

 

2019

 
Total equity - GAAP

$

305,127

 

$

304,913

 

$

294,013

 

Adjustments:
Goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

Tangible common equity

$

300,440

 

$

300,226

 

$

289,326

 

 
Total assets - GAAP

$

4,168,146

 

$

4,100,083

 

$

3,670,176

 

Adjustments:
Goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

Tangible assets

$

4,163,459

 

$

4,095,396

 

$

3,665,489

 

 
Common shares outstanding

 

9,801,825

 

 

9,741,800

 

 

10,128,587

 

 
Book value per common share

$

31.13

 

$

31.30

 

$

29.03

 

Effect of goodwill

 

(0.48

)

 

(0.48

)

 

(0.46

)

Tangible book value per common share

$

30.65

 

$

30.82

 

$

28.57

 

 
Total shareholders' equity to assets

 

7.32

%

 

7.44

%

 

8.01

%

Effect of goodwill

 

(0.10

%)

 

(0.11

%)

 

(0.12

%)

Tangible common equity to tangible assets

 

7.22

%

 

7.33

%

 

7.89

%

 
Total average equity - GAAP

$

311,005

 

$

297,623

 

$

291,883

 

Adjustments:
Average goodwill

 

(4,687

)

 

(4,687

)

 

(4,687

)

Average tangible common equity

$

306,318

 

$

292,936

 

$

287,196

 

 
Return on average shareholders' equity

 

7.78

%

 

9.46

%

 

7.91

%

Effect of goodwill

 

0.12

%

 

0.15

%

 

0.13

%

Return on average tangible common equity

 

7.90

%

 

9.61

%

 

8.04

%

 
Total interest income

$

36,244

 

$

37,877

 

$

34,999

 

Adjustments:
Fully-taxable equivalent adjustments 1

 

1,535

 

 

1,570

 

 

1,557

 

Total interest income - FTE

$

37,779

 

$

39,447

 

$

36,556

 

 
Net interest income

$

15,018

 

$

15,374

 

$

16,244

 

Adjustments:
Fully-taxable equivalent adjustments 1

 

1,535

 

 

1,570

 

 

1,557

 

Net interest income - FTE

$

16,553

 

$

16,944

 

$

17,801

 

 
Net interest margin

 

1.50

%

 

1.51

%

 

1.86

%

Effect of fully-taxable equivalent adjustments 1

 

0.15

%

 

0.16

%

 

0.18

%

Net interest margin - FTE

 

1.65

%

 

1.67

%

 

2.04

%

1

Assuming a 21% tax rate

 

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