EX-99.1 2 inbk-2q2021xex991.htm EX-99.1 Document


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First Internet Bancorp Reports Second Quarter 2021 Results

Highlights for the second quarter include:

•Record net income of $13.1 million, an increase of 233.1% over the second quarter of 2020

•Record diluted earnings per share of $1.31, an increase of 227.5% over the second quarter of 2020

•Adjusted net income of $11.1 million, or $1.11 per diluted share, when excluding a $2.5 million pre-tax gain on the sale of the Company’s corporate headquarters

•Total revenue of $30.6 million, an increase of 57.6% over the second quarter of 2020

•Adjusted revenue of $28.0 million, an increase of 44.6% over the second quarter of 2020

•Net interest margin and fully-taxable equivalent net interest margin each increased 7 basis points (“bps”) from the first quarter of 2021, driven by a 13 bp decrease in the cost of interest-bearing deposits


Fishers, Indiana, July 21, 2021 – First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the second quarter of 2021. Net income for the second quarter of 2021 was $13.1 million, or $1.31 diluted earnings per share. This compares to net income of $10.5 million, or $1.05 diluted earnings per share, for the first quarter of 2021, and net income of $3.9 million, or $0.40 diluted earnings per share, for the second quarter of 2020.

“We produced strong operating results for the second quarter of 2021 driven by net interest margin expansion and disciplined expense management,” said David Becker, Chairman and Chief Executive Officer. “We also maintained excellent credit quality, as nonperforming loans declined during the quarter and delinquencies were at historically low levels. Additionally, our growing national SBA platform steadily gained momentum and drove higher gain-on-sale revenue. Looking forward, pipelines in SBA, as well as in other key lines of business, grew significantly during the quarter, leaving us well-positioned to capitalize on loan growth opportunities in the second half of 2021.

Mr. Becker concluded, “We continue to challenge ourselves to imagine more. First Internet Bank has fostered a workplace culture that promotes innovation, collaboration and customer focus. This is reflected in our being named one of the ‘Top Workplaces in Central Indiana’ for the eighth consecutive year. I would like to thank the entire First Internet Bank team for helping to deliver record earnings performance for the quarter.”

Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2021 was $21.6 million, compared to $20.5 million for the first quarter of 2021 and $14.4 million for the second quarter of 2020. On a fully-taxable equivalent






basis, net interest income for the second quarter of 2021 was $23.0 million, compared to $21.9 million for the first quarter of 2021 and $15.9 million for the second quarter of 2020.

Total interest income for the second quarter of 2021 was $33.4 million, an increase of 0.3% compared to the first quarter of 2021 and a decrease of 2.5% compared to the second quarter of 2020. On a fully-taxable equivalent basis, total interest income for the second quarter of 2021 was $34.8 million, an increase of 0.4% compared to the first quarter of 2021 and a decrease of 2.5% compared to the second quarter of 2020. The modest increase in total interest income compared to the first quarter of 2021 was driven primarily by a 0.7% increase in the average balance of interest-earning assets, which was partially offset by a 5 bp decrease in the yield on these assets. The yield on interest-earning assets for the second quarter of 2021 decreased to 3.26% from 3.31% in the prior quarter due primarily to changes in the earning asset mix. Average loan balances, including loans held for sale, decreased $62.8 million, or 2.0%, while the average balances of other earning assets and securities increased $63.7 million, or 14.3%, and $26.3 million, or 4.8%, respectively.

Total interest expense for the second quarter of 2021 was $11.8 million, a decrease of 7.7% compared to the first quarter of 2021 and a decrease of 40.5% compared to the second quarter of 2020. The decrease in total interest expense compared to the linked quarter was due primarily to a 13 bp decline in the cost of interest-bearing deposits as well as a slight decline of 0.2% in the average balance of these deposits. The decrease in deposit costs reflects the continued decline in the rates paid on interest-bearing deposits as well as a shift in the deposit mix due to a reduction in the average balance of certificates and brokered deposits.

During the second quarter of 2021, the cost of money market deposits remained stable compared to the linked quarter while the average balance of these deposits increased $46.8 million, or 3.4%. Furthermore, the cost of certificates and brokered deposits decreased by 21 bps and average balances decreased by $75.4 million, or 5.0%. During the second quarter of 2021, new certificates of deposit were originated at a weighted average cost of 44 bps while maturing certificates of deposit had a weighted average cost of 174 bps, a difference of 130 bps.

Net interest margin (“NIM”) improved to 2.11% for the second quarter of 2021, up from 2.04% for the first quarter of 2021 and 1.37% for the second quarter of 2020. Fully-taxable equivalent NIM (“FTE NIM”) increased to 2.25% for the second quarter of 2021, up from 2.18% for the first quarter of 2021 and 1.50% for the second quarter of 2020. The increases in NIM and FTE NIM compared to the linked quarter were driven primarily by lower interest-bearing deposit costs, partially offset by the change in the earning asset mix.

Noninterest Income
Noninterest income for the second quarter of 2021 was $9.0 million, compared to $8.4 million for the first quarter of 2021 and $5.0 million for the second quarter of 2020. The increase compared to the linked quarter was driven primarily by a gain on sale of premises and equipment and gain on sale of loans, partially offset by lower revenues from mortgage banking activities. During the second quarter of 2021, the Company completed the sale of its headquarters, resulting in a $2.5 million gain. Gain on sale of loans totaled $3.0 million for the quarter, increasing $1.3 million compared to the first quarter of 2021, due to an increase in the volume of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loan sales and an increase in secondary market premiums during the quarter. Mortgage banking revenue totaled $2.7 million for the second quarter of 2021, down $3.1 million from the linked quarter, due primarily to decreases in interest rate locks, sold loan volume and margins.

Noninterest Expense
Noninterest expense for the second quarter of 2021 was $15.1 million, compared to $15.3 million for the first quarter of 2021 and $13.2 million for the second quarter of 2020. Noninterest expense decreased slightly on a linked-quarter basis, driven primarily by decreases of $0.3 million in salaries






and employee benefits and $0.2 million in deposit insurance premium, which was partially offset by a $0.2 million increase in marketing, advertising and promotion expense. The decrease in salaries and employee benefits expense was due mainly to a decrease in medical claims expense in the second quarter of 2021. The decrease in deposit insurance premium was due to the decline in total assets year-over-year. The increase in marketing expenses was due to higher mortgage lead generation costs and sponsorship initiatives.

Income Taxes
The Company reported income tax expense of $2.4 million for the second quarter of 2021 and an effective tax rate of 15.4%, compared to income tax expense of $1.9 million and an effective tax rate of 15.1% for the first quarter of 2021 and an income tax benefit of $0.3 million for the second quarter of 2020.

Loans and Credit Quality
Total loans as of June 30, 2021 were $3.0 billion, a decrease of $101.1 million, or 3.3%, compared to March 31, 2021, and a decrease of $16.1 million, or 0.5%, compared to June 30, 2020. Total commercial loan balances were $2.4 billion as of June 30, 2021, a decrease of $85.1 million, or 3.4%, compared to March 31, 2021, and an increase of $48.3 million, or 2.0%, compared to June 30, 2020. Compared to the linked quarter, the decline in commercial loan balances was driven largely by net payoffs in healthcare finance, single tenant lease financing and public finance loans, which was partially offset by increases in commercial and industrial and investor commercial real estate loan balances.

Total consumer loan balances were $466.5 million as of June 30, 2021, a decrease of $11.9 million, or 2.5%, compared to March 31, 2021, and a decrease of $56.5 million, or 10.8%, compared to June 30, 2020. The decline in consumer loan balances from March 31, 2021 was due primarily to prepayment activity in the residential mortgage portfolio, partially offset by an increase in trailer balances.

Total delinquencies 30 days or more past due were 0.07% of total loans as of June 30, 2021, down from 0.23% as of March 31, 2021, and down from 0.25% as of June 30, 2020. Overall credit quality remained strong as nonperforming loans to total loans was 0.31% as of June 30, 2021, compared to 0.48% as of March 31, 2021, and 0.28% as of June 30, 2020. During the second quarter of 2021, nonperforming loans declined $5.4 million, or 36.8%, compared to the linked quarter due primarily to positive developments related to a single tenant lease financing relationship and a commercial and industrial relationship, both of which had been classified as nonaccrual. The single tenant lease financing relationship included two loans, one of which was paid off at net book value (unpaid principal balance less specific reserves) and the other was transferred to other real estate owned. The commercial and industrial relationship included four loans, two of which paid off during the quarter.

The allowance for loan losses as a percentage of total loans was 0.95% as of June 30, 2021, or 0.96% when excluding SBA Paycheck Protection Program (“PPP”) loans, compared to 1.00% and 1.02%, respectively, as of March 31, 2021, and 0.82% and 0.84%, respectively, as of June 30, 2020. The decline in the allowance for loan losses compared to the linked quarter was due primarily to the elimination of $2.9 million of specific reserves related to the loan relationships discussed above as well as the decrease in total loan balances, which included commercial loan portfolios with higher allowance coverage ratios. These items were partially offset by additional adjustments to the qualitative factors in the Company’s allowance model, resulting in a 6 bp increase to the allowance coverage ratio related to the general reserve on the Company’s commercial loan portfolio, which totaled 0.99% at quarter end.







Net charge-offs of $2.6 million were recognized during the second quarter of 2021, resulting in net charge-offs to average loans of 0.35%, compared to 0.02% for the first quarter of 2021 and 0.12% for the second quarter of 2020. The increase in net charge-offs is primarily due to the single tenant lease financing relationship discussed above as the loan payoff and the transfer to other real estate owned were recorded at net book value. The provision for loan losses in the second quarter of 2021 was $21,000, compared to $1.3 million for the first quarter of 2021 and $2.5 million for the second quarter of 2020. The decrease in provision for loan losses for the second quarter of 2021 was due primarily to the $101.1 million decrease in loan balances mentioned above.

Capital
As of June 30, 2021, total shareholders’ equity was $358.6 million, an increase of $14.1 million, or 4.1%, compared to March 31, 2021, and an increase of $50.9 million, or 16.6%, compared to June 30, 2020. The increase compared to the linked quarter was due primarily to net income earned during the quarter and a decrease in accumulated other comprehensive loss. Book value per common share increased to $36.39 as of June 30, 2021, up from $35.07 as of March 31, 2021, and $31.40 as of June 30, 2020. Tangible book value per share increased to $35.92, up from $34.60 and $30.92, 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 June 30, 2021.
As of June 30, 2021
CompanyBank
Total shareholders’ equity to assets 8.53%9.45%
Tangible common equity to tangible assets 1
8.43%9.35%
Tier 1 leverage ratio 2
8.70%9.61%
Common equity tier 1 capital ratio 2
12.23%13.54%
Tier 1 capital ratio 2
12.23%13.54%
Total risk-based capital ratio 2
15.51%14.48%
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, July 22, 2021, to discuss its quarterly financial results. The call can be accessed via telephone at (888) 348-3664. A recorded replay can be accessed through August 22, 2021, by dialing (877) 344-7529; passcode: 10158195.

Additionally, interested parties can listen to a live webcast of the call on the 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 June 30, 2021. 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, 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,” “designed,” “estimate,” “expect,” “intend,” “may,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “will,” “would” or other similar expressions. Such statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and are subject to certain risks and uncertainties including: the effects of the COVID-19 global pandemic and other adverse public health developments on the economy, our business and operations and the business and operations of our vendors and customers: general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products; our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we own or that is the collateral for our loans; 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; 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, average tangible common equity, return on average tangible common equity, total interest income – FTE, net interest income – FTE, net interest margin – FTE, allowance for loan losses to loans, excluding PPP loans, adjusted revenue, 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.”



Contact Information:
Investors/AnalystsMedia
Paula DeemerNicole Lorch
Director of Corporate AdministrationPresident & Chief Operating Officer
(317) 428-4628(317) 532-7906
investors@firstib.comnlorch@firstib.com






First Internet Bancorp
Summary Financial Information (unaudited)
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2021		March 31, 2021June 30,
2020		June 30,
2021		June 30,
2020
Net income$13,096 $10,450 $3,932 $23,546 $9,951 
Per share and share information
Earnings per share - basic$1.32 $1.06 $0.40 $2.37 $1.02 
Earnings per share - diluted1.31 1.05 0.40 2.36 1.02 
Dividends declared per share0.06 0.06 0.06 0.12 0.12 
Book value per common share36.39 35.07 31.40 36.39 31.40 
Tangible book value per common share 1
35.92 34.60 30.92 35.92 30.92 
Common shares outstanding9,854,153 9,823,831 9,799,047 9,854,153 9,799,047 
Average common shares outstanding:
Basic9,932,761 9,899,230 9,768,227 9,916,087 9,798,528 
Diluted9,981,422 9,963,036 9,768,227 9,970,147 9,802,427 
Performance ratios
Return on average assets1.25 %1.02 %0.37 %1.13 %0.47 %
Return on average shareholders' equity14.88 %12.61 %5.15 %13.78 %6.48 %
Return on average tangible common equity 1
15.09 %12.79 %5.23 %13.97 %6.58 %
Net interest margin2.11 %2.04 %1.37 %2.08 %1.43 %
Net interest margin - FTE 1,2
2.25 %2.18 %1.50 %2.21 %1.58 %
Capital ratios 3
Total shareholders' equity to assets8.53 %8.23 %7.12 %8.53 %7.12 %
Tangible common equity to tangible assets 1
8.43 %8.12 %7.01 %8.43 %7.01 %
Tier 1 leverage ratio8.70 %8.46 %7.49 %8.70 %7.49 %
Common equity tier 1 capital ratio12.23 %11.81 %10.94 %12.23 %10.94 %
Tier 1 capital ratio12.23 %11.81 %10.94 %12.23 %10.94 %
Total risk-based capital ratio15.51 %15.18 %14.13 %15.51 %14.13 %
Asset quality
Nonperforming loans$9,264 $14,649 $8,195 $9,264 $8,195 
Nonperforming assets10,564 14,678 10,304 10,564 10,304 
Nonperforming loans to loans0.31 %0.48 %0.28 %0.31 %0.28 %
Nonperforming assets to total assets0.25 %0.35 %0.24 %0.25 %0.24 %
Allowance for loan losses to:
Loans0.95 %1.00 %0.82 %0.95 %0.82 %
Loans, excluding PPP loans 1
0.96 %1.02 %0.84 %0.96 %0.84 %
Nonperforming loans303.0 %209.2 %298.5 %303.0 %298.5 %
Net charge-offs to average loans0.35 %0.02 %0.12 %0.18 %0.09 %
Average balance sheet information
Loans$2,994,356 $3,047,915 $2,943,165 $3,020,987 $2,937,136 
Total securities574,684 548,429 657,622 561,630 644,251 
Other earning assets509,735 446,045 594,296 478,065 505,111 
Total interest-earning assets4,100,749 4,073,604 4,241,690 4,087,255 4,133,245 
Total assets4,206,966 4,173,273 4,330,174 4,190,212 4,215,053 
Noninterest-bearing deposits98,207 90,764 73,758 94,506 67,107 
Interest-bearing deposits3,109,165 3,115,987 3,270,720 3,112,557 3,179,882 
Total deposits3,207,372 3,206,751 3,344,478 3,207,063 3,246,989 
Shareholders' equity352,894 335,968 306,868 344,478 308,937 

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)
Dollar amounts in thousands
June 30,
2021		March 31, 2021June 30,
2020
Assets
Cash and due from banks$4,347 $4,440 $7,016 
Interest-bearing deposits324,450 411,765 491,603 
Securities available-for-sale, at fair value663,519 462,376 589,017 
Securities held-to-maturity, at amortized cost65,659 68,190 68,295 
Loans held-for-sale27,587 30,235 38,813 
Loans2,957,608 3,058,694 2,973,674 
Allowance for loan losses(28,066)(30,642)(24,465)
Net loans2,929,542 3,028,052 2,949,209 
Accrued interest receivable16,345 16,433 21,093 
Federal Home Loan Bank of Indianapolis stock25,650 25,650 25,650 
Cash surrender value of bank-owned life insurance38,421 38,185 37,474 
Premises and equipment, net44,249 42,381 23,939 
Goodwill4,687 4,687 4,687 
Servicing asset4,120 3,817 2,522 
Other real estate owned1,300 — 2,065 
Accrued income and other assets54,766 52,359 63,217 
Total assets$4,204,642 $4,188,570 $4,324,600 
Liabilities
Noninterest-bearing deposits$113,996 $100,700 $82,864 
Interest-bearing deposits3,092,151 3,116,903 3,297,925 
Total deposits3,206,147 3,217,603 3,380,789 
Advances from Federal Home Loan Bank514,919 514,917 514,913 
Subordinated debt69,871 69,794 69,681 
Accrued interest payable1,132 1,418 1,073 
Accrued expenses and other liabilities53,932 40,272 50,433 
Total liabilities3,846,001 3,844,004 4,016,889 
Shareholders' equity
Voting common stock222,486 221,911 220,418 
Retained earnings149,066 136,575 108,431 
Accumulated other comprehensive loss(12,911)(13,920)(21,138)
Total shareholders' equity358,641 344,566 307,711 
Total liabilities and shareholders' equity$4,204,642 $4,188,570 $4,324,600 
First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited)
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2021		March 31, 2021June 30,
2020		June 30,
2021		June 30,
2020
Interest income
Loans$30,835 $30,885 $29,730 $61,720 $60,138 
Securities - taxable1,921 1,779 3,276 3,700 6,895 
Securities - non-taxable259 281 457 540 1,029 
Other earning assets362 335 759 697 2,404 
Total interest income33,377 33,280 34,222 66,657 70,466 
Interest expense
Deposits7,705 8,628 15,763 16,333 32,971 
Other borrowed funds4,065 4,127 4,033 8,192 8,051 
Total interest expense11,770 12,755 19,796 24,525 41,022 
Net interest income21,607 20,525 14,426 42,132 29,444 
Provision for loan losses21 1,276 2,491 1,297 3,952 
Net interest income after provision
for loan losses		21,586 19,249 11,935 40,835 25,492 
Noninterest income
Service charges and fees280 266 182 546 394 
Loan servicing revenue457 422 255 879 506 
Loan servicing asset revaluation(240)(155)(90)(395)(269)
Mortgage banking activities2,674 5,750 3,408 8,424 7,076 
Gain on sale of loans3,019 1,723 762 4,742 2,563 
Gain on sale of securities— — — — 41 
Gain on sale of premises and equipment2,523 — — 2,523 — 
Other249 369 456 618 873 
Total noninterest income8,962 8,375 4,973 17,337 11,184 
Noninterest expense
Salaries and employee benefits9,232 9,492 7,789 18,724 15,563 
Marketing, advertising and promotion872 680 411 1,552 786 
Consulting and professional fees1,078 986 932 2,064 2,109 
Data processing382 462 339 844 714 
Loan expenses541 534 399 1,075 998 
Premises and equipment1,587 1,601 1,602 3,188 3,227 
Deposit insurance premium275 425 435 700 920 
Other1,108 1,137 1,337 2,245 2,413 
Total noninterest expense15,075 15,317 13,244 30,392 26,730 
Income before income taxes15,473 12,307 3,664 27,780 9,946 
Income tax provision (benefit)2,377 1,857 (268)4,234 (5)
Net income$13,096 $10,450 $3,932 $23,546 $9,951 
Per common share data
Earnings per share - basic$1.32 $1.06 $0.40 $2.37 $1.02 
Earnings per share - diluted$1.31 $1.05 $0.40 $2.36 $1.02 
Dividends declared per share$0.06 $0.06 $0.06 $0.12 $0.12 

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
June 30, 2021March 31, 2021June 30, 2020
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,016,330 $30,835 4.10 %$3,079,130 $30,885 4.07 %$2,989,772 $29,730 4.00 %
Securities - taxable490,634 1,921 1.57 %461,300 1,779 1.56 %560,947 3,276 2.35 %
Securities - non-taxable84,050 259 1.24 %87,129 281 1.31 %96,675 457 1.90 %
Other earning assets509,735 362 0.28 %446,045 335 0.30 %594,296 759 0.51 %
Total interest-earning assets4,100,749 33,377 3.26 %4,073,604 33,280 3.31 %4,241,690 34,222 3.24 %
Allowance for loan losses(30,348)(29,884)(23,388)
Noninterest-earning assets136,565 129,553 111,872 
Total assets$4,206,966 $4,173,273 $4,330,174 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$192,777 $143 0.30 %$180,746 $133 0.30 %$137,487 $237 0.69 %
Savings accounts55,811 49 0.35 %46,035 40 0.35 %37,204 92 0.99 %
Money market accounts1,416,406 1,462 0.41 %1,369,626 1,391 0.41 %1,089,063 3,541 1.31 %
Certificates and brokered deposits1,444,171 6,051 1.68 %1,519,580 7,064 1.89 %2,006,966 11,893 2.38 %
Total interest-bearing deposits3,109,165 7,705 0.99 %3,115,987 8,628 1.12 %3,270,720 15,763 1.94 %
Other borrowed funds584,751 4,065 2.79 %583,780 4,127 2.87 %584,543 4,033 2.77 %
Total interest-bearing liabilities3,693,916 11,770 1.28 %3,699,767 12,755 1.40 %3,855,263 19,796 2.07 %
Noninterest-bearing deposits98,207 90,764 73,758 
Other noninterest-bearing liabilities61,949 46,774 94,285 
Total liabilities3,854,072 3,837,305 4,023,306 
Shareholders' equity352,894 335,968 306,868 
Total liabilities and shareholders' equity$4,206,966 $4,173,273 $4,330,174 
Net interest income$21,607 $20,525 $14,426 
Interest rate spread1.98 %1.91 %1.17 %
Net interest margin2.11 %2.04 %1.37 %
Net interest margin - FTE 2,3
2.25 %2.18 %1.50 %

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
Average Balances and Rates (unaudited)
Dollar amounts in thousands
Six Months Ended
June 30, 2021June 30, 2020
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale$3,047,560 $61,720 4.08 %$2,983,883 $60,138 4.05 %
Securities - taxable476,049 3,700 1.57 %545,997 6,895 2.54 %
Securities - non-taxable85,581 540 1.27 %98,254 1,029 2.11 %
Other earning assets478,065 697 0.29 %505,111 2,404 0.96 %
Total interest-earning assets4,087,255 66,657 3.29 %4,133,245 70,466 3.43 %
Allowance for loan losses(30,117)(22,724)
Noninterest-earning assets133,074 104,532 
Total assets$4,190,212 $4,215,053 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$186,795 $276 0.30 %$130,206 $456 0.70 %
Savings accounts50,950 89 0.35 %33,774 170 1.01 %
Money market accounts1,393,145 2,853 0.41 %977,834 7,284 1.50 %
Certificates and brokered deposits1,481,667 13,115 1.78 %2,038,068 25,061 2.47 %
Total interest-bearing deposits3,112,557 16,333 1.06 %3,179,882 32,971 2.09 %
Other borrowed funds584,268 8,192 2.83 %584,504 8,051 2.77 %
Total interest-bearing liabilities3,696,825 24,525 1.34 %3,764,386 41,022 2.19 %
Noninterest-bearing deposits94,506 67,107 
Other noninterest-bearing liabilities54,403 74,623 
Total liabilities3,845,734 3,906,116 
Shareholders' equity344,478 308,937 
Total liabilities and shareholders' equity$4,190,212 $4,215,053 
Net interest income$42,132 $29,444 
Interest rate spread1.95 %1.24 %
Net interest margin2.08 %1.43 %
Net interest margin - FTE 1
2.21 %1.58 %

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
June 30, 2021March 31, 2021June 30, 2020
AmountPercentAmountPercentAmountPercent
Commercial loans
Commercial and industrial$96,203 3.3 %$71,835 2.3 %$81,687 2.7 %
Owner-occupied commercial real estate87,136 2.9 %87,930 2.9 %86,897 2.9 %
Investor commercial real estate28,871 1.0 %14,832 0.5 %13,286 0.4 %
Construction117,970 4.0 %123,483 4.0 %77,591 2.6 %
Single tenant lease financing913,115 30.9 %941,322 30.8 %980,292 33.0 %
Public finance612,138 20.7 %637,600 20.8 %647,107 21.8 %
Healthcare finance455,890 15.3 %510,237 16.8 %380,956 12.8 %
Small business lending 123,293 4.2 %132,490 4.3 %118,526 4.0 %
Total commercial loans2,434,616 82.3 %2,519,729 82.4 %2,386,342 80.2 %
Consumer loans
Residential mortgage177,148 6.0 %190,148 6.2 %208,728 7.0 %
Home equity17,510 0.6 %17,949 0.6 %22,640 0.8 %
Trailers148,795 5.0 %143,454 4.7 %147,326 5.0 %
Recreational vehicles91,030 3.1 %92,221 3.0 %102,088 3.4 %
Other consumer loans31,971 1.1 %34,534 1.1 %42,218 1.4 %
Total consumer loans466,454 15.8 %478,306 15.6 %523,000 17.6 %
Net deferred loan fees, premiums, discounts and other 1
56,538 1.9 %60,659 2.0 %64,332 2.2 %
Total loans$2,957,608 100.0 %$3,058,694 100.0 %$2,973,674 100.0 %
June 30, 2021March 31, 2021June 30, 2020
AmountPercentAmountPercentAmountPercent
Deposits
Noninterest-bearing deposits$113,996 3.6 %$100,700 3.1 %$82,864 2.5 %
Interest-bearing demand deposits196,841 6.1 %186,015 5.8 %152,391 4.5 %
Savings accounts56,298 1.8 %51,251 1.6 %43,366 1.3 %
Money market accounts1,432,355 44.6 %1,397,449 43.4 %1,241,874 36.7 %
Certificates of deposits1,087,350 33.9 %1,174,764 36.5 %1,470,905 43.5 %
Brokered deposits 319,307 10.0 %307,424 9.6 %389,389 11.5 %
Total deposits$3,206,147 100.0 %$3,217,603 100.0 %$3,380,789 100.0 %

1 Includes carrying value adjustments of $40.4 million, $41.6 million and $46.0 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2021, March 31, 2021 and June 30, 2020 respectively.










First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2021		March 31,
2021		June 30,
2020		June 30,
2021		June 30,
2020
Total equity - GAAP$358,641 $344,566 $307,711 $358,641 $307,711 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible common equity$353,954 $339,879 $303,024 $353,954 $303,024 
Total assets - GAAP$4,204,642 $4,188,570 $4,324,600 $4,204,642 $4,324,600 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible assets$4,199,955 $4,183,883 $4,319,913 $4,199,955 $4,319,913 
Common shares outstanding9,854,153 9,823,831 9,799,047 9,854,153 9,799,047 
Book value per common share$36.39 $35.07 $31.40 $36.39 $31.40 
Effect of goodwill(0.47)(0.47)(0.48)(0.47)(0.48)
Tangible book value per common share$35.92 $34.60 $30.92 $35.92 $30.92 
Total shareholders' equity to assets8.53 %8.23 %7.12 %8.53 %7.12 %
Effect of goodwill(0.10 %)(0.11 %)(0.11 %)(0.10 %)(0.11 %)
Tangible common equity to tangible assets8.43 %8.12 %7.01 %8.43 %7.01 %
Total average equity - GAAP$352,894 $335,968 $306,868 $344,478 $308,937 
Adjustments:
           Average goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Average tangible common equity$348,207 $331,281 $302,181 $339,791 $304,250 
Return on average shareholders' equity14.88 %12.61 %5.15 %13.78 %6.48 %
Effect of goodwill0.21 %0.18 %0.08 %0.19 %0.10 %
Return on average tangible common equity15.09 %12.79 %5.23 %13.97 %6.58 %
Total interest income$33,377 $33,280 $34,222 $66,657 $70,466 
Adjustments:
Fully-taxable equivalent adjustments 1
1,394 1,356 1,437 2,750 2,972 
Total interest income - FTE$34,771 $34,636 $35,659 $69,407 $73,438 
Net interest income$21,607 $20,525 $14,426 $42,132 $29,444 
Adjustments:
Fully-taxable equivalent adjustments 1
1,394 1,356 1,437 2,750 2,972 
Net interest income - FTE$23,001 $21,881 $15,863 $44,882 $32,416 
Net interest margin2.11 %2.04 %1.37 %2.08 %1.43 %
Effect of fully-taxable equivalent adjustments 1
0.14 %0.14 %0.13 %0.13 %0.15 %
Net interest margin - FTE2.25 %2.18 %1.50 %2.21 %1.58 %
Allowance for loan losses$28,066 $30,642 $24,465 $28,066 $24,465 
Loans$2,957,608 $3,058,694 $2,973,674 $2,957,608 $2,973,674 
Adjustments:
PPP loans(39,682)(53,365)(58,948)(39,682)(58,948)
Loans, excluding PPP loans$2,917,926 $3,005,329 $2,914,726 $2,917,926 $2,914,726 
Allowance for loan losses to loans0.95 %1.00 %0.82 %0.95 %0.82 %
Effect of PPP loans0.01 %0.02 %0.02 %0.01 %0.02 %
Allowance for loan losses to loans, excluding PPP loans0.96 %1.02 %0.84 %0.96 %0.84 %

1 Assuming a 21% tax rate







First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2021		March 31,
2021		June 30,
2020		June 30,
2021		June 30,
2020
Total revenue - GAAP$30,569 $28,900 $19,399 $59,469 $40,628 
Adjustments:
     Gain on sale of premises and equipment (2,523)— — (2,523)— 
Adjusted revenue$28,046 $28,900 $19,399 $56,946 $40,628 
Income before income taxes - GAAP$15,473 $12,307 $3,664 $27,780 $9,946 
Adjustments:
     Gain on sale of premises and equipment(2,523)— — (2,523)— 
Adjusted income before income taxes$12,950 $12,307 $3,664 $25,257 $9,946 
Income tax provision - GAAP$2,377 $1,857 $(268)$4,234 $(5)
Adjustments:
     Gain on sale of premises and equipment(530)— — (530)— 
Adjusted income tax provision$1,847 $1,857 $(268)$3,704 $(5)
Net income - GAAP$13,096 $10,450 $3,932 $23,546 $9,951 
Adjustments:
     Gain on sale of premises and equipment(1,993)— — (1,993)— 
Adjusted net income$11,103 $10,450 $3,932 $21,553 $9,951 
Diluted average common shares outstanding9,981,422 9,963,036 9,768,227 9,970,147 9,802,427 
Diluted earnings per share - GAAP$1.31 $1.05 $0.40 $2.36 $1.02 
Adjustments:
     Effect of gain on sale of premises and equipment (0.20)— — (0.20)— 
Adjusted diluted earnings per share$1.11 $1.05 $0.40 $2.16 $1.02 
Return on average assets1.25 %1.02 %0.37 %1.13 %0.47 %
    Effect of gain on sale of premises and equipment(0.19 %)0.00 %0.00 %(0.09 %)0.00 %
Adjusted return on average assets1.06 %1.02 %0.37 %1.04 %0.47 %
Return on average shareholders' equity14.88 %12.61 %5.15 %13.78 %6.48 %
    Effect of gain on sale of premises and equipment(2.26 %)0.00 %0.00 %(1.16 %)0.00 %
Adjusted return on average shareholders' equity12.62 %12.61 %5.15 %12.62 %6.48 %
Return on average tangible common equity15.09 %12.79 %5.23 %13.97 %6.58 %
     Effect of gain on sale of premises and equipment(2.30 %)0.00 %0.00 %(1.18 %)0.00 %
Adjusted return on average tangible common equity12.79 %12.79 %5.23 %12.79 %6.58 %
Effective income tax rate15.4 %15.1 %(7.3 %)15.2 %(0.1 %)
     Effect of gain on sale of premises and equipment(1.1 %)0.0 %0.0 %(0.5 %)0.0 %
Adjusted effective income tax rate14.3 %15.1 %(7.3 %)14.7 %(0.1 %)