EX-99.1 2 inbk-3q2021xex991.htm EX-99.1 Document


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First Internet Bancorp Reports Third Quarter 2021 Results

Highlights for the third quarter include:

•Net income of $12.1 million, an increase of 43.7% over the third quarter of 2020

•Diluted earnings per share of $1.21, an increase of 40.7% over the third quarter of 2020

•Adjusted net income of $12.7 million, or $1.27 per diluted share, when excluding $0.8 million of pre-tax costs associated with the redemption of subordinated notes

•Total revenue of $28.7 million and adjusted total revenue of $29.5 million, an increase of 2.8% over the third quarter of 2020

•New board authorization to repurchase up to $30.0 million of common stock through the end of 2022

Fishers, Indiana, October 20, 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 third quarter of 2021. Net income for the third quarter of 2021 was $12.1 million, or $1.21 diluted earnings per share. This compares to net income of $13.1 million, or $1.31 diluted earnings per share, for the second quarter of 2021, and net income of $8.4 million, or $0.86 diluted earnings per share, for the third quarter of 2020.

“We produced strong operating results for the third quarter of 2021, driven by solid revenue generation and disciplined expense management,” said David Becker, Chairman and Chief Executive Officer. “Our strategies designed to build sustainable fee revenue continued to pay off as we generated a return on average assets in excess of 1.0% for the fourth straight quarter. Looking forward, pipelines in our SBA, construction, single tenant lease financing and our newly formed franchise finance lines of business are strong, giving us confidence in our ability to continue growing revenue and earnings for the remainder of the year and into 2022.

“Our new franchise finance business line is the third installment in a $300 million commitment we have made to small business owners in 2021,” Mr. Becker added. “We have teamed with ApplePie Capital, a company that sources and originates franchisee lending opportunities on a nationwide basis. Together, we are funding loans to proven businesses, fueling economic and job growth and building our loan portfolio. We expect to fund $100 million of franchise loans by year-end. Earlier this year, we originated $30 million in a second round of PPP, and we have secured an additional $172 million in SBA 7(a) approvals over the course of SBA’s most recently ended fiscal year. Looking ahead to 2022, we expect to expand our small business pledge by 20%. We anticipate funding up to $150 million in franchise finance and $215 million in SBA 7(a) loans. Furthermore, to provide our small business owners the upgraded digital experience that will empower them to manage their cash






flows effectively, we have announced a partnership with Finzly to provide an innovative payments hub and expect to announce additional relationships within the next few weeks.”

Mr. Becker concluded, “Of course, the First Internet team’s hard work and unwavering commitment to client service are the keys to our ongoing success and the reasons we are confident in the strength of our organization and our abilities to seize upon new opportunities ahead.”

Net Interest Income and Net Interest Margin
Net interest income for the third quarter of 2021 was $20.9 million, compared to $21.6 million for the second quarter of 2021, and $16.2 million for the third quarter of 2020. On a fully-taxable equivalent basis, net interest income for the third quarter of 2021 was $22.3 million, compared to $23.0 million for the second quarter of 2021, and $17.7 million for the third quarter of 2020.

On September 30, 2021, the Company redeemed all $25.0 million aggregate principal amount of 6.0% fixed-to-floating rate subordinated notes due in 2026. Excluding $0.8 million of costs related to this redemption, net interest income was $21.7 million and fully-taxable equivalent net interest income was $23.1 million.

Total interest income for the third quarter of 2021 was $33.0 million, a decrease of 1.0% compared to the second quarter of 2021, and an increase of 0.9% compared to the third quarter of 2020. On a fully-taxable equivalent basis, total interest income for the third quarter of 2021 was $34.4 million, a decrease of 1.1% compared to the second quarter of 2021, and an increase of 0.6% compared to the third quarter of 2020. The modest decrease in total interest income compared to the second quarter of 2021 was driven primarily by a 10 basis point (“bp”) decrease in the yield on interest-earning assets, which was partially offset by a 1.2% increase in the average balance of these assets. The yield on interest-earning assets for the third quarter of 2021 decreased to 3.16% from 3.26% in the linked quarter due primarily to changes in the earning asset mix as well as lower loan fees. Average loan balances, including loans held for sale, decreased $60.0 million, or 2.0%, while the average balances of securities and other earning assets increased $108.0 million, or 10.0%, compared to the linked quarter.

Total interest expense for the third quarter of 2021 was $12.1 million, an increase of 2.9% compared to the second quarter of 2021, and a decrease of 26.7% compared to the third quarter of 2020. The increase in total interest expense compared to the linked quarter was due primarily to the costs related to the redemption of the subordinated notes discussed above. Average interest-bearing deposit balances increased $28.6 million, or 0.9%, while the cost of these deposits declined 9 bps to 0.90%.

The composition of deposits continued to improve as the average balance of money market accounts, savings accounts and interest-bearing demand deposits increased $94.1 million, or 5.6%, on a combined basis while the average balance of certificates and brokered deposits declined $65.5 million, or 4.5%, compared to the linked quarter. Furthermore, the cost of certificates and brokered deposits decreased by 14 bps compared to the linked quarter. During the third quarter of 2021, new certificates of deposit were originated at a weighted average cost of 43 bps while maturing certificates of deposit had a weighted average cost of 143 bps; a difference of 100 bps.

Net interest margin (“NIM”) was 2.00% for the third quarter of 2021, down from 2.11% for the second quarter of 2021 and up from 1.53% for the third quarter of 2020. Fully-taxable equivalent NIM (“FTE






NIM”) was 2.13% for the third quarter of 2021, down from 2.25% for the second quarter of 2021 and up from 1.67% for the third quarter of 2020. Excluding the $0.8 million of costs related to the redemption of the subordinated notes, adjusted NIM was 2.08% and adjusted FTE NIM was 2.21%. The decreases in adjusted NIM and adjusted FTE NIM compared to the linked quarter were driven primarily by the lower average loan balances and loan fees, partially offset by lower interest-bearing deposit costs and higher securities income.

Noninterest Income
Noninterest income for the third quarter of 2021 was $7.8 million, compared to $9.0 million for the second quarter of 2021 and $12.5 million for the third quarter of 2020. The decrease compared to the linked quarter was driven primarily by the positive impact of a $2.5 million gain on sale of premises and equipment that occurred in the second quarter. Excluding the impact of that gain, adjusted noninterest income increased by $1.4 million, or 21.3%, compared to the linked quarter, driven primarily by higher revenue from mortgage banking activities and other income, partially offset by modestly lower gain on sale of loans. Mortgage banking revenue totaled $3.9 million for the third quarter of 2021, an increase of $1.2 million, or 44.0%, from the linked quarter, due primarily to increases in interest rate locks, sold loan volume and margins. Other income increased $0.5 million due to a distribution from the Company’s investment in a Small Business Investment Company fund. Gain on sale of loans totaled $2.7 million for the quarter, decreasing from $3.0 million in the second quarter of 2021, due mainly to a decline in secondary market premiums on U.S. Small Business Administration (“SBA”) 7(a) guaranteed loan sales during the quarter.

Noninterest Expense
Noninterest expense for the third quarter of 2021 was $14.5 million, compared to $15.1 million for the second quarter of 2021 and $16.4 million for the third quarter of 2020. The decrease of $0.6 million, or 4.1%, compared to the linked quarter was driven primarily by lower consulting and professional fees, other expense and loan expenses. The decrease in consulting and professional fees and loan expenses was due mainly to third party loan review and stress testing performed in the linked quarter. The decrease in other expense was due to seasonal expenses incurred in the second quarter as well as a gain on the sale of a residential other real estate owned property. The decrease in loan expenses was due to reimbursement of expenses incurred in prior quarters related to nonperforming loans.

Income Taxes
The Company reported income tax expense of $2.2 million for the third quarter of 2021 and an effective tax rate of 15.5%, compared to income tax expense of $2.4 million and an effective tax rate of 15.4% for the second quarter of 2021 and $1.4 million and an effective tax rate of 14.2% for the third quarter of 2020.

Loans and Credit Quality
Total loans as of September 30, 2021 were $2.9 billion, a decrease of $21.5 million, or 0.7%, compared to June 30, 2021, and a decrease of $76.8 million, or 2.5%, compared to September 30, 2020. Total commercial loan balances were $2.4 billion as of September 30, 2021, a decrease of $29.1 million, or 1.2%, compared to June 30, 2021, and a decrease of $37.0 million, or 1.5%, compared to September 30, 2020. Compared to the linked quarter, the decline in commercial loan balances was driven largely by net payoffs in healthcare finance, public finance and SBA Paycheck Protection Program (“PPP”) loans, which were partially offset by increases in franchise finance, commercial and industrial and single tenant lease financing balances.







Total consumer loan balances were $475.1 million as of September 30, 2021, an increase of $8.7 million, or 1.9%, compared to June 30, 2021, and a decrease of $32.6 million, or 6.4%, compared to September 30, 2020. The increase in consumer loan balances from June 30, 2021 was due primarily to higher balances in the residential mortgage portfolio.

Total delinquencies 30 days or more past due were 0.06% of total loans as of September 30, 2021, down from 0.07% as of June 30, 2021 and 0.22% as of September 30, 2020. Overall credit quality remained strong as nonperforming loans to total loans was 0.27% as of September 30, 2021, compared to 0.31% as of June 30, 2021 and 0.32% as of September 30, 2020. During the third quarter of 2021, nonperforming loans declined $1.2 million, or 13.1%, compared to the linked quarter due primarily to the payoff of a single tenant lease financing relationship which had previously been classified as nonaccrual.

The allowance for loan losses as a percentage of total loans was 0.95% as of September 30, 2021, or 0.96% when excluding PPP loans, consistent with 0.95% and 0.96%, respectively, as of June 30, 2021 and up from 0.89% and 0.91%, respectively, as of September 30, 2020.

Net charge-offs of less than $0.1 million were recognized during the third quarter of 2021, resulting in net charge-offs to average loans of 0.01%, compared to 0.35% for the second quarter of 2021 and 0.01% for the third quarter of 2020. Net charge-offs were elevated in the second quarter of 2021 due to the elimination of specific reserves related to a single tenant lease financing relationship. The provision for loan losses in the third quarter of 2021 was a benefit of $29,000, compared to a provision of $21,000 for the second quarter of 2021 and $2.5 million for the third quarter of 2020. The decrease in provision for loan losses for the third quarter of 2021 was due primarily to the $21.5 million decrease in loan balances mentioned above.

Capital
As of September 30, 2021, total shareholders’ equity was $370.4 million, an increase of $11.8 million, or 3.3%, compared to June 30, 2021, and an increase of $52.3 million, or 16.5%, compared to September 30, 2020. The increase compared to the linked quarter was due primarily to net income earned during the quarter. Book value per common share increased to $37.59 as of September 30, 2021, up from $36.39 as of June 30, 2021 and $32.46 as of September 30, 2020. Tangible book value per share increased to $37.12, up from $35.92 and $31.98, each as of the same reference dates.

During the third quarter of 2021, the Company completed a $60.0 million offering of 3.75% fixed-to-floating rate subordinated notes due in 2031. A portion of the proceeds were used to redeem the $25.0 million principal amount of 6.0% subordinated notes due in 2026 discussed above. The net increase in subordinated notes resulted in increases in the Company’s Tier 2 regulatory capital and total risk-based capital ratio.









The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of September 30, 2021.
As of September 30, 2021
CompanyBank
Total shareholders’ equity to assets 8.71%9.68%
Tangible common equity to tangible assets 1
8.61%9.58%
Tier 1 leverage ratio 2
8.86%9.83%
Common equity tier 1 capital ratio 2
12.61%13.99%
Tier 1 capital ratio 2
12.61%13.99%
Total risk-based capital ratio 2
17.03%14.92%
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.

Stock Repurchase Authorization
On October 18, 2021, the Company’s Board of Directors authorized a new stock repurchase program (the “Program”) with an aggregate purchase price of up to $30.0 million. The Program is scheduled to expire on December 31, 2022. The Program permits the Company to acquire shares of its common stock from time to time in the open market or in privately negotiated transactions at prices management considers to be attractive and in the best interest of the Company and its shareholders. The Program does not obligate the Company to repurchase shares of its common stock, and there is no assurance that it will do so.

Any repurchases are subject to compliance with applicable laws and regulations. Repurchases will be conducted in consideration of general market and economic conditions as well as the financial and regulatory condition of the Company and the Bank. The Program may be modified, suspended or discontinued at any time.

Conference Call and Webcast
The Company will host a conference call and webcast at 12:00 p.m. Eastern Time on Thursday, October 21, 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 November 21, 2021 by dialing (877) 344-7529; passcode: 10160916.

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 $4.3 billion as of September 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, SBA financing, residential mortgage loans, consumer loans, and specialty finance services nationally as well as commercial real estate loans, construction loans, commercial and industrial loans, and treasury management services on a regional basis. 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, including statements with respect to the Company’s stock repurchase program and timing and methods of executing the same, the financial condition, results of operations, trends in lending policies and loan programs, plans and prospective business partnerships, objectives, future performance and business of the Company. Forward-looking statements are generally identifiable by the use of words such as “anticipate,” “believe,” “confidence in,” “continue,” “could,” “designed,” “effort,” “estimate,” “expect,” “intend,” “looking forward,” “may,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “will,” “working on,” “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. Such statements 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. 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, healthcare finance and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; execution of future acquisition, reorganization or disposition transactions, including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; 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, adjusted net interest income, adjusted net interest income – FTE, net interest margin – FTE, adjusted net interest margin, adjusted net interest margin – FTE, allowance for loan losses to loans, excluding PPP loans, adjusted revenue, adjusted noninterest income, 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 EndedNine Months Ended
September 30,
2021		June 30, 2021September 30,
2020		September 30,
2021		September 30,
2020
Net income$12,090 $13,096 $8,411 $35,636 $18,362 
Per share and share information
Earnings per share - basic$1.22 $1.32 $0.86 $3.59 $1.87 
Earnings per share - diluted1.21 1.31 0.86 3.57 1.87 
Dividends declared per share0.06 0.06 0.06 0.18 0.18 
Book value per common share37.59 36.39 32.46 37.59 32.46 
Tangible book value per common share 1
37.12 35.92 31.98 37.12 31.98 
Common shares outstanding9,854,153 9,854,153 9,800,569 9,854,153 9,800,569 
Average common shares outstanding:
Basic9,936,237 9,932,761 9,773,175 9,922,877 9,825,683 
Diluted9,988,102 9,981,422 9,773,224 9,974,071 9,827,182 
Performance ratios
Return on average assets1.12 %1.25 %0.78 %1.13 %0.58 %
Return on average shareholders' equity13.10 %14.88 %10.67 %13.54 %7.90 %
Return on average tangible common equity 1
13.27 %15.09 %10.83 %13.73 %8.02 %
Net interest margin2.00 %2.11 %1.53 %2.05 %1.47 %
Net interest margin - FTE 1,2
2.13 %2.25 %1.67 %2.19 %1.61 %
Capital ratios 3
Total shareholders' equity to assets8.71 %8.53 %7.34 %8.71 %7.34 %
Tangible common equity to tangible assets 1
8.61 %8.43 %7.24 %8.61 %7.24 %
Tier 1 leverage ratio8.86 %8.70 %7.72 %8.86 %7.72 %
Common equity tier 1 capital ratio12.61 %12.23 %11.13 %12.61 %11.13 %
Tier 1 capital ratio12.61 %12.23 %11.13 %12.61 %11.13 %
Total risk-based capital ratio17.03 %15.51 %14.38 %17.03 %14.38 %
Asset quality
Nonperforming loans$7,851 $9,038 $9,774 $7,851 $9,774 
Nonperforming assets9,039 10,338 9,782 9,039 9,782 
Nonperforming loans to loans0.27 %0.31 %0.32 %0.27 %0.32 %
Nonperforming assets to total assets0.21 %0.25 %0.23 %0.21 %0.23 %
Allowance for loan losses to:
Loans0.95 %0.95 %0.89 %0.95 %0.89 %
Loans, excluding PPP loans 1
0.96 %0.96 %0.91 %0.96 %0.91 %
Nonperforming loans356.6 %310.5 %275.4 %356.6 %275.4 %
Net charge-offs to average loans0.01 %0.35 %0.01 %0.12 %0.06 %
Average balance sheet information
Loans$2,933,654 $2,994,356 $2,996,641 $2,991,556 $2,957,116 
Total securities713,342 574,684 633,552 612,755 640,659 
Other earning assets479,051 509,735 552,058 478,399 520,875 
Total interest-earning assets4,148,726 4,100,749 4,216,634 4,107,971 4,161,245 
Total assets4,265,189 4,206,966 4,307,819 4,215,479 4,246,201 
Noninterest-bearing deposits104,161 98,207 75,901 97,760 70,060 
Interest-bearing deposits3,137,728 3,109,165 3,279,621 3,121,039 3,213,372 
Total deposits3,241,889 3,207,372 3,355,522 3,218,799 3,283,432 
Shareholders' equity366,187 352,894 313,611 351,794 310,506 

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
September 30,
2021		June 30, 2021September 30,
2020
Assets
Cash and due from banks$4,932 $4,347 $5,804 
Interest-bearing deposits402,583 324,450 482,649 
Securities available-for-sale, at fair value634,007 663,519 528,311 
Securities held-to-maturity, at amortized cost62,129 65,659 68,254 
Loans held-for-sale43,970 27,587 76,208 
Loans2,936,148 2,957,608 3,012,914 
Allowance for loan losses(28,000)(28,066)(26,917)
Net loans2,908,148 2,929,542 2,985,997 
Accrued interest receivable14,866 16,345 17,768 
Federal Home Loan Bank of Indianapolis stock25,650 25,650 25,650 
Cash surrender value of bank-owned life insurance38,660 38,421 37,714 
Premises and equipment, net52,700 44,249 31,262 
Goodwill4,687 4,687 4,687 
Servicing asset4,412 4,120 2,818 
Other real estate owned1,188 1,300 — 
Accrued income and other assets54,360 54,766 66,502 
Total assets$4,252,292 $4,204,642 $4,333,624 
Liabilities
Noninterest-bearing deposits$110,117 $113,996 $86,088 
Interest-bearing deposits3,114,478 3,092,151 3,286,303 
Total deposits3,224,595 3,206,147 3,372,391 
Advances from Federal Home Loan Bank514,920 514,919 514,914 
Subordinated debt104,156 69,871 69,758 
Accrued interest payable1,568 1,132 1,249 
Accrued expenses and other liabilities36,611 53,932 57,210 
Total liabilities3,881,850 3,846,001 4,015,522 
Shareholders' equity
Voting common stock223,059 222,486 220,951 
Retained earnings160,551 149,066 116,241 
Accumulated other comprehensive loss(13,168)(12,911)(19,090)
Total shareholders' equity370,442 358,641 318,102 
Total liabilities and shareholders' equity$4,252,292 $4,204,642 $4,333,624 
First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited)
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2021		June 30, 2021September 30,
2020		September 30,
2021		September 30,
2020
Interest income
Loans$30,126 $30,835 $29,560 $91,846 $89,698 
Securities - taxable2,297 1,921 2,240 5,997 9,135 
Securities - non-taxable241 259 381 781 1,410 
Other earning assets370 362 569 1,067 2,973 
Total interest income33,034 33,377 32,750 99,691 103,216 
Interest expense
Deposits7,090 7,705 12,428 23,423 45,399 
Other borrowed funds5,025 4,065 4,090 13,217 12,141 
Total interest expense12,115 11,770 16,518 36,640 57,540 
Net interest income20,919 21,607 16,232 63,051 45,676 
(Benefit) provision for loan losses(29)21 2,509 1,268 6,461 
Net interest income after (benefit) provision
for loan losses		20,948 21,586 13,723 61,783 39,215 
Noninterest income
Service charges and fees276 280 224 822 618 
Loan servicing revenue511 457 274 1,390 780 
Loan servicing asset revaluation(274)(240)(103)(669)(372)
Mortgage banking activities3,850 2,674 9,630 12,274 16,706 
Gain on sale of loans2,719 3,019 2,033 7,461 4,596 
Gain on sale of securities— — 98 — 139 
Gain on sale of premises and equipment— 2,523 — 2,523 — 
Other731 249 339 1,349 1,212 
Total noninterest income7,813 8,962 12,495 25,150 23,679 
Noninterest expense
Salaries and employee benefits9,316 9,232 9,533 28,040 25,096 
Marketing, advertising and promotion813 872 426 2,365 1,212 
Consulting and professional fees728 1,078 614 2,792 2,723 
Data processing380 382 388 1,224 1,102 
Loan expenses383 541 408 1,458 1,406 
Premises and equipment1,687 1,587 1,568 4,875 4,795 
Deposit insurance premium230 275 440 930 1,360 
Write-down of other real estate owned— — 2,065 — 2,065 
Other914 1,108 970 3,159 3,383 
Total noninterest expense14,451 15,075 16,412 44,843 43,142 
Income before income taxes14,310 15,473 9,806 42,090 19,752 
Income tax provision2,220 2,377 1,395 6,454 1,390 
Net income$12,090 $13,096 $8,411 $35,636 $18,362 
Per common share data
Earnings per share - basic$1.22 $1.32 $0.86 $3.59 $1.87 
Earnings per share - diluted$1.21 $1.31 $0.86 $3.57 $1.87 
Dividends declared per share$0.06 $0.06 $0.06 $0.18 $0.18 

All periods presented have been reclassified to conform to the current period classification






First Internet Bancorp
Average Balances and Rates (unaudited)
Dollar amounts in thousands
Three Months Ended
September 30, 2021June 30, 2021September 30, 2020
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$2,956,333 $30,126 4.04 %$3,016,330 $30,835 4.10 %$3,031,024 $29,560 3.88 %
Securities - taxable629,101 2,297 1.45 %490,634 1,921 1.57 %539,154 2,240 1.65 %
Securities - non-taxable84,241 241 1.14 %84,050 259 1.24 %94,398 381 1.61 %
Other earning assets479,051 370 0.31 %509,735 362 0.28 %552,058 569 0.41 %
Total interest-earning assets4,148,726 33,034 3.16 %4,100,749 33,377 3.26 %4,216,634 32,750 3.09 %
Allowance for loan losses(28,127)(30,348)(25,347)
Noninterest-earning assets144,590 136,565 116,532 
Total assets$4,265,189 $4,206,966 $4,307,819 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$198,637 $150 0.30 %$192,777 $143 0.30 %$154,275 $228 0.59 %
Savings accounts62,195 56 0.36 %55,811 49 0.35 %45,466 79 0.69 %
Money market accounts1,498,218 1,532 0.41 %1,416,406 1,462 0.41 %1,295,249 2,442 0.75 %
Certificates and brokered deposits1,378,678 5,352 1.54 %1,444,171 6,051 1.68 %1,784,631 9,679 2.16 %
Total interest-bearing deposits3,137,728 7,090 0.90 %3,109,165 7,705 0.99 %3,279,621 12,428 1.51 %
Other borrowed funds611,975 5,025 3.26 %584,751 4,065 2.79 %584,634 4,090 2.78 %
Total interest-bearing liabilities3,749,703 12,115 1.28 %3,693,916 11,770 1.28 %3,864,255 16,518 1.70 %
Noninterest-bearing deposits104,161 98,207 75,901 
Other noninterest-bearing liabilities45,138 61,949 54,052 
Total liabilities3,899,002 3,854,072 3,994,208 
Shareholders' equity366,187 352,894 313,611 
Total liabilities and shareholders' equity$4,265,189 $4,206,966 $4,307,819 
Net interest income$20,919 $21,607 $16,232 
Interest rate spread1.88 %1.98 %1.39 %
Net interest margin2.00 %2.11 %1.53 %
Net interest margin - FTE 2,3
2.13 %2.25 %1.67 %

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
Nine Months Ended
September 30, 2021September 30, 2020
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,016,817 $91,846 4.07 %$2,999,711 $89,698 3.99 %
Securities - taxable527,625 5,997 1.52 %543,699 9,135 2.24 %
Securities - non-taxable85,130 781 1.23 %96,960 1,410 1.94 %
Other earning assets478,399 1,067 0.30 %520,875 2,973 0.76 %
Total interest-earning assets4,107,971 99,691 3.24 %4,161,245 103,216 3.31 %
Allowance for loan losses(29,446)(23,605)
Noninterest-earning assets136,954 108,561 
Total assets$4,215,479 $4,246,201 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$190,785 $425 0.30 %$138,288 $684 0.66 %
Savings accounts54,740 145 0.35 %37,700 249 0.88 %
Money market accounts1,428,554 4,385 0.41 %1,084,411 9,726 1.20 %
Certificates and brokered deposits1,446,960 18,468 1.71 %1,952,973 34,740 2.38 %
Total interest-bearing deposits3,121,039 23,423 1.00 %3,213,372 45,399 1.89 %
Other borrowed funds593,605 13,217 2.98 %584,547 12,141 2.77 %
Total interest-bearing liabilities3,714,644 36,640 1.32 %3,797,919 57,540 2.02 %
Noninterest-bearing deposits97,760 70,060 
Other noninterest-bearing liabilities51,281 67,716 
Total liabilities3,863,685 3,935,695 
Shareholders' equity351,794 310,506 
Total liabilities and shareholders' equity$4,215,479 $4,246,201 
Net interest income$63,051 $45,676 
Interest rate spread1.92 %1.29 %
Net interest margin2.05 %1.47 %
Net interest margin - FTE 2,3
2.19 %1.61 %

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
September 30, 2021June 30, 2021September 30, 2020
AmountPercentAmountPercentAmountPercent
Commercial loans
Commercial and industrial$107,142 3.6 %$96,203 3.3 %$77,116 2.6 %
Owner-occupied commercial real estate84,819 2.9 %87,136 2.9 %89,095 3.0 %
Investor commercial real estate28,505 1.0 %28,871 1.0 %13,084 0.4 %
Construction115,414 3.9 %117,970 4.0 %92,154 3.1 %
Single tenant lease financing921,998 31.5 %913,115 30.9 %960,505 31.9 %
Public finance601,738 20.5 %612,138 20.7 %625,638 20.8 %
Healthcare finance417,388 14.2 %455,890 15.3 %461,740 15.3 %
Small business lending 102,889 3.5 %123,293 4.2 %123,168 4.1 %
Franchise Finance25,598 0.9 %— — %— — %
Total commercial loans2,405,491 82.0 %2,434,616 82.3 %2,442,500 81.2 %
Consumer loans
Residential mortgage188,750 6.4 %177,148 6.0 %203,041 6.7 %
Home equity17,960 0.6 %17,510 0.6 %22,169 0.7 %
Trailers147,806 5.0 %148,795 5.0 %145,775 4.8 %
Recreational vehicles90,192 3.1 %91,030 3.1 %96,910 3.2 %
Other consumer loans30,398 1.0 %31,971 1.1 %39,765 1.3 %
Total consumer loans475,106 16.1 %466,454 15.8 %507,660 16.7 %
Net deferred loan fees, premiums, discounts and other 1
55,551 1.9 %56,538 1.9 %62,754 2.1 %
Total loans$2,936,148 100.0 %$2,957,608 100.0 %$3,012,914 100.0 %
September 30, 2021June 30, 2021September 30, 2020
AmountPercentAmountPercentAmountPercent
Deposits
Noninterest-bearing deposits$110,117 3.4 %$113,996 3.6 %$86,088 2.6 %
Interest-bearing demand deposits201,557 6.3 %196,841 6.1 %155,054 4.6 %
Savings accounts66,762 2.1 %56,298 1.8 %49,890 1.5 %
Money market accounts1,479,358 45.8 %1,432,355 44.6 %1,359,178 40.3 %
Certificates of deposits1,043,898 32.4 %1,087,350 33.9 %1,360,575 40.3 %
Brokered deposits 322,903 10.0 %319,307 10.0 %361,606 10.7 %
Total deposits$3,224,595 100.0 %$3,206,147 100.0 %$3,372,391 100.0 %

1 Includes carrying value adjustments of $38.9 million, $40.4 million and $44.3 million related to terminated interest rate swaps associated with public finance loans as of September 30, 2021, June 30, 2021 and September 30, 2020, respectively.























First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2021		June 30,
2021		September 30,
2020		September 30,
2021		September 30,
2020
Total equity - GAAP$370,442 $358,641 $318,102 $370,442 $318,102 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible common equity$365,755 $353,954 $313,415 $365,755 $313,415 
Total assets - GAAP$4,252,292 $4,204,642 $4,333,624 $4,252,292 $4,333,624 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible assets$4,247,605 $4,199,955 $4,328,937 $4,247,605 $4,328,937 
Common shares outstanding9,854,153 9,854,153 9,800,569 9,854,153 9,800,569 
Book value per common share$37.59 $36.39 $32.46 $37.59 $32.46 
Effect of goodwill(0.47)(0.47)(0.48)(0.47)(0.48)
Tangible book value per common share$37.12 $35.92 $31.98 $37.12 $31.98 
Total shareholders' equity to assets8.71 %8.53 %7.34 %8.71 %7.34 %
Effect of goodwill(0.10 %)(0.10 %)(0.10 %)(0.10 %)(0.10 %)
Tangible common equity to tangible assets8.61 %8.43 %7.24 %8.61 %7.24 %
Total average equity - GAAP$366,187 $352,894 $313,611 $351,794 $310,506 
Adjustments:
           Average goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Average tangible common equity$361,500 $348,207 $308,924 $347,107 $305,819 
Return on average shareholders' equity13.10 %14.88 %10.67 %13.54 %7.90 %
Effect of goodwill0.17 %0.21 %0.16 %0.19 %0.12 %
Return on average tangible common equity13.27 %15.09 %10.83 %13.73 %8.02 %
Total interest income$33,034 $33,377 $32,750 $99,691 $103,216 
Adjustments:
Fully-taxable equivalent adjustments 1
1,356 1,394 1,424 4,105 4,396 
Total interest income - FTE$34,390 $34,771 $34,174 $103,796 $107,612 
Net interest income$20,919 $21,607 $16,232 $63,051 $45,676 
Adjustments:
Fully-taxable equivalent adjustments 1
1,356 1,394 1,424 4,105 4,396 
Net interest income - FTE$22,275 $23,001 $17,656 $67,156 $50,072 
Net interest income$20,919 $21,607 $16,232 $63,051 $45,676 
Adjustments:
Subordinated debt redemption cost810 — — 810 — 
Adjusted net interest income$21,729 $21,607 $16,232 $63,861 $45,676 
Net interest income$20,919 $21,607 $16,232 $63,051 $45,676 
Adjustments:
Fully-taxable equivalent adjustments 1
1,356 1,394 1,424 4,105 4,396 
Subordinated debt redemption cost810 — — 810 — 
Adjusted net interest income - FTE$23,085 $23,001 $17,656 $67,966 $50,072 
Net interest margin2.00 %2.11 %1.53 %2.05 %1.47 %
Effect of fully-taxable equivalent adjustments 1
0.13 %0.14 %0.14 %0.14 %0.14 %






Net interest margin - FTE2.13 %2.25 %1.67 %2.19 %1.61 %
Net interest margin2.00 %2.11 %1.53 %2.05 %1.47 %
Effect of subordinated debt redemption cost0.08 %— %— %0.02 %— %
Adjusted net interest margin2.08 %2.11 %1.53 %2.07 %1.47 %
Net interest margin2.00 %2.11 %1.53 %2.05 %1.47 %
Effect of fully-taxable equivalent adjustments 1
0.13 %0.14 %0.14 %0.14 %0.14 %
Effect of subordinated debt redemption cost0.08 %— %— %0.02 %— %
Adjusted net interest margin - FTE2.21 %2.25 %1.67 %2.21 %1.61 %
Allowance for loan losses$28,000 $28,066 $26,917 $28,000 $26,917 
Loans$2,936,148 $2,957,608 $3,012,914 $2,936,148 $3,012,914 
Adjustments:
PPP loans(14,981)(39,682)(58,337)(14,981)(58,337)
Loans, excluding PPP loans$2,921,167 $2,917,926 $2,954,577 $2,921,167 $2,954,577 
Allowance for loan losses to loans0.95 %0.95 %0.89 %0.95 %0.89 %
Effect of PPP loans0.01 %0.01 %0.02 %0.01 %0.02 %
Allowance for loan losses to loans, excluding PPP loans0.96 %0.96 %0.91 %0.96 %0.91 %
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 EndedNine Months Ended
September 30,
2021		June 30,
2021		September 30,
2020		September 30,
2021		September 30,
2020
Total revenue - GAAP$28,732 $30,569 $28,727 $88,201 $69,355 
Adjustments:
     Gain on sale of premises and equipment — (2,523)— (2,523)— 
     Subordinated debt redemption cost810 $— $— 810 $— 
Adjusted total revenue$29,542 $28,046 $28,727 $86,488 $69,355 
Noninterest income - GAAP$7,813 $8,962 $12,495 $25,150 $23,679 
Adjustments:
Gain on sale of premises and equipment— (2,523)— (2,523)— 
Adjusted noninterest income$7,813 $6,439 $12,495 $22,627 $23,679 
Income before income taxes - GAAP$14,310 $15,473 $9,806 $42,090 $19,752 
Adjustments:
     Write-down of other real estate owned— — 2,065 — 2,065 
     Gain on sale of premises and equipment— (2,523)— (2,523)— 
     Subordinated debt redemption cost810 — — 810 — 
Adjusted income before income taxes$15,120 $12,950 $11,871 $40,377 $21,817 
Income tax provision - GAAP$2,220 $2,377 $1,395 $6,454 $1,390 
Adjustments:
     Write-down of other real estate owned— — 434 — 434 
     Gain on sale of premises and equipment— (530)— (530)— 
     Subordinated debt redemption cost170 — — 170 — 
Adjusted income tax provision$2,390 $1,847 $1,829 $6,094 $1,824 
Net income - GAAP$12,090 $13,096 $8,411 $35,636 $18,362 
Adjustments:
     Write-down of other real estate owned— — 1,631 — 1,631 
     Gain on sale of premises and equipment— (1,993)— (1,993)— 






     Subordinated debt redemption cost640 — — 640 — 
Adjusted net income$12,730 $11,103 $10,042 $34,283 $19,993 
Diluted average common shares outstanding9,988,102 9,981,422 9,773,224 9,974,071 9,827,182 
Diluted earnings per share - GAAP$1.21 $1.31 $0.86 $3.57 $1.87 
Adjustments:
     Effect of write-down of other real estate owned— — 0.17 — 0.16 
     Effect of gain on sale of premises and equipment — (0.20)— (0.19)— 
     Effect of subordinated debt redemption cost0.06 — — 0.06 — 
Adjusted diluted earnings per share$1.27 $1.11 $1.03 $3.44 $2.03 
Return on average assets1.12 %1.25 %0.78 %1.13 %0.58 %
    Effect of write-down of other real estate owned0.00 %0.00 %0.15 %0.00 %0.05 %
    Effect of gain on sale of premises and equipment0.00 %(0.19)%0.00 %(0.06 %)0.00 %
    Effect of subordinated debt redemption cost0.06 %0.00 %0.00 %0.02 %0.00 %
Adjusted return on average assets1.18 %1.06 %0.93 %1.09 %0.63 %
Return on average shareholders' equity13.10 %14.88 %10.67 %13.54 %7.90 %
    Effect of write-down of other real estate owned0.00 %0.00 %2.07 %0.00 %0.70 %
    Effect of gain on sale of premises and equipment0.00 %(2.26)%0.00 %(0.75 %)0.00 %
    Effect of subordinated debt redemption cost0.69 %0.00 %0.00 %0.24 %0.00 %
Adjusted return on average shareholders' equity13.79 %12.62 %12.74 %13.03 %8.60 %
Return on average tangible common equity13.27 %15.09 %10.83 %13.73 %8.02 %
     Effect of write-down of other real estate owned0.00 %0.00 %2.10 %0.00 %0.71 %
     Effect of gain on sale of premises and equipment0.00 %(2.30)%0.00 %(0.77 %)0.00 %
     Effect of subordinated debt redemption cost0.70 %0.00 %0.00 %0.25 %0.00 %
Adjusted return on average tangible common equity13.97 %12.79 %12.93 %13.21 %8.73 %
Effective income tax rate15.5 %15.4 %14.2 %15.3 %7.0 %
     Effect of write-down of other real estate owned0.0 %0.0 %1.2 %0.0 %1.4 %
     Effect of gain on sale of premises and equipment0.0 %(1.1)%0.0 %(0.6 %)0.0 %
     Effect of subordinated debt redemption cost0.3 %0.0 %0.0 %0.4 %0.0 %
Adjusted effective income tax rate15.8 %14.3 %15.4 %15.1 %8.4 %