Letter to Bancorp Shareholders

March 19, 2010

Dear Shareholder:

Last year’s economic environment challenged the financial services industry. According to a recent article in The Wall Street Journal¹, the 8,012 banks and savings institutions in the United States had just $12.5 billion in combined profits in 2009, down from $100 billion in 2007.

First Internet Bancorp (“Bancorp”) proved no exception.  The Bancorp reported a net loss of $2.1 million for the year, the first loss since the Bancorp exited its start up phase in 2001. As noted within our year-end earnings announcement², a significant factor in 2009 financial results was a $3 million charge to provision expense in December 2009 to address a single commercial credit. 

In February 2010 the Bancorp was able to reverse over $2 million of this specific provision expense. This will have an immediate impact on our first quarter earnings.   

We will discuss these and other past results, present efforts, and future plans, at our upcoming Annual Meeting of Shareholders. I hope you will consider joining us on Monday, May 17, at 2:00 PM (Eastern Daylight Time) in Indianapolis.

You are welcome to attend and vote in person or by proxy. Your vote matters! We encourage you to vote your enclosed proxy and return it quickly so we are able to establish a quorum. Following the meeting, we will post the meeting presentation on the website for those of you who are unable to attend.  The presentation will be available through a link on the home page of the Bancorp website.

If you plan to attend in person, you will find directions to the meeting location online. We request that you return your proxy vote in advance, in case you are ultimately unable to attend.  Ballots will also be available at the meeting for voting if you have not already done so by proxy or wish to change your previously recorded vote. 

We hope to see you at the shareholder meeting, and, as always, we thank you for your continued support.

Sincerely,

David B. Becker
Chairman and CEO

¹ "Banks Begin to Withdraw From Their Branch Boom," The Wall Street Journal, March 3, 2010.

² The full text of the year-end earnings release, dated February 26, 2010, is available online. If you have not already done so, you may review the 2009 audited consolidated financial statements online.