EX-99.1 2 inbk-4q2022xex991.htm EX-99.1 Document

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First Internet Bancorp Reports Fourth Quarter and Full Year 2021 Results

Fishers, Indiana, January 25, 2023 – First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter and Full Year 2022 Commentary
Market forces and the economic climate, both driven in part by the post-pandemic recovery, had a significant impact on the Company’s 2022 financial results and frame the Company’s strategy for 2023 and beyond.

Loan demand was strong throughout the year. Total loan portfolio balances increased 7.5% from the third quarter of 2022 and 21.2% from the fourth quarter of 2021. However, intense competition for deposits through the most rapid set of Federal Funds rate hikes since the late 1980s drove interest expense higher and pressured net interest margin. Average loan portfolio yields were up 39 bps in the fourth quarter compared to the linked quarter, while the cost of interest-bearing deposits was up 104 bps. The Company recorded a higher provision for loan loss expense in the fourth quarter based primarily upon loan growth while credit quality remained excellent with nonperforming ratios well below industry averages.

The Company has healthy loan pipelines and will focus its 2023 origination efforts on its floating rate loan products, notably commercial construction and small business lending, as well as its higher-yielding fixed rate programs, such as franchise finance.

While other lending lines have strong demand, the combination of housing prices, housing supply, economic uncertainty and interest rates have caused mortgage applications nationally to plunge to their lowest level in 26 years. Due to the steep decline in mortgage volumes and the negative outlook for mortgage lending over the next several years, the Company decided to exit its consumer mortgage business during the first quarter of 2023. This includes its nationwide digital direct-to-consumer mortgage platform that originates residential loans for sale in the secondary market as well as its local traditional consumer mortgage and construction-to-permanent business. (The Company’s commercial construction and land development business will not be affected by this decision and will remain an important part of the Company’s lending strategy, as noted above.)

This action is expected to reduce total annual noninterest expense by approximately $6.8 million and increase annualized pre-tax income by approximately $2.7 million, with 80% of the benefit realized in 2023 and 100% thereafter. The Company estimates that it will incur total pre-tax expense of approximately $3.3 million in the first and second quarters of 2023 associated with exiting this line of business.

While navigating market headwinds, management remains committed to creating shareholder value. The Company repurchased 284,286 shares in the fourth quarter at an average price of $25.16. For the year, the Company repurchased over 800,000 shares at an average price well below tangible book value. Tangible book value reached its highest value to date, at $39.74 as of December 31, 2022.



Fourth Quarter and Full Year 2022 Financial Highlights
Highlights for the fourth quarter and full year include:

•Annual net income and diluted earnings per share of $35.5 million and $3.70, compared to $48.1 million and $4.82, respectively, for the full year of 2021

•Quarterly net income of $6.4 million and $0.68 diluted earnings per share, compared to $8.4 million and $0.89 diluted earnings per share for the third quarter of 2022, and $12.5 million and $1.25 diluted earnings per share for the fourth quarter of 2021

•Loan growth of $243.5 million in the fourth quarter, a 7.5% increase from the third quarter of 2022 and an increase of $611.7 million, or 21.2%, from the fourth quarter of 2021

•Quarterly net interest margin of 2.09% and fully-taxable equivalent net interest margin of 2.22%

“We satisfied strong, high quality loan demand in our commercial and consumer lending businesses in the fourth quarter, capping off a year of robust loan growth and annual growth in net interest income,” said David Becker, Chairman and Chief Executive Officer. “While higher deposit costs impacted earnings in the fourth quarter, we were pleased with the increase in income generated by our loan portfolio and the strong finish to the year by our small business lending team. As a result of investments we made during 2021 and 2022 in government guaranteed lending talent, we continue to move up the rankings, placing in the top 30 of 7(a) program lenders for the SBA’s 2022 fiscal year, and are in the top 15 for the 2023 fiscal year-to-date.

“We are also beginning to realize the rewards from important investments in our Banking-as-a-Service efforts. We made significant progress in the fourth quarter, going live with our platform partner, Increase, and providing payments services to power the small business bill pay product from Ramp, a leading corporate card and spend management platform. We have two additional fintech partners in the pilot phase, another four approaching the pilot phase and one in due diligence. We also expect our partnership with the platform Treasury Prime to be fully implemented during the first quarter of 2023 with the first associated fintech program to be on-boarded in the second quarter.

“As we enter 2023, we believe our increasing mix of variable rate loans, combined with new loan production coming on at higher rates, will help to offset the pressure of higher deposit costs. If interest rates follow the market’s expectations, deposit costs should stabilize later this year and decline thereafter, setting the stage to achieve higher earnings and profitability in 2024. Furthermore, our balance sheet and capital levels are strong and asset quality remains high, leaving us well-positioned for any changes in the broader economic environment.”

Mr. Becker concluded, “I want to thank the entire First Internet team for their hard work and unwavering commitment to client service throughout 2022, which are the keys to our ongoing success and the reason we are confident in our future.”

Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2022 was $21.7 million, compared to $24.0 million for the third quarter of 2022, and $23.5 million for the fourth quarter of 2021. On a fully-taxable equivalent basis, net interest income for the fourth quarter of 2022 was $23.1 million, compared to $25.3 million for the third quarter of 2022, and $24.9 million for the fourth quarter of 2021.



Total interest income for the fourth quarter of 2022 was $45.7 million, an increase of 16.8% compared to the third quarter of 2022, and an increase of 33.6% compared to the fourth quarter of 2021. On a fully-taxable equivalent basis, total interest income for the fourth quarter of 2022 was $47.1 million, an increase of 16.5% compared to the third quarter of 2022, and an increase of 32.4% compared to the fourth quarter of 2021. The sequential increase was due primarily to growth in interest income earned on the commercial and consumer loan portfolios as well as from the securities portfolio and other earning assets. The yield on average interest-earning assets for the fourth quarter of 2022 increased to 4.40% from 3.91% in the linked quarter due primarily to a 39 basis point (“bp”) increase in the average loan yield, a 60 bp increase in the yield earned on securities and a 103 bp increase in the yield earned on other earning assets. Compared to the linked quarter, average loan balances increased $215.5 million, or 6.8%, while the average balance of securities decreased $27.7 million, or 4.6%, and the average balance of other earning assets decreased $38.6 million, or 20.5%.

Interest income earned on commercial loans was positively impacted by higher rates and average balances in the variable rate small business lending, construction and commercial and industrial portfolios as well as strong growth and higher new origination yields in the franchise finance portfolio. Other portfolios also benefitted from higher average balances and increases in new origination yields as well as higher prepayment fees. In the consumer portfolio, interest income was up due to the combination of higher new origination yields and growth in the residential mortgage, trailers and recreational vehicles portfolios.

New funded portfolio origination yields increased 84 bps compared to the third quarter, and for the full year 2022 were approximately 118 bps higher than for 2021. Because of the fixed rate nature of certain larger portfolios, there is a lagging impact of the higher origination yields on the portfolio.

The Federal Reserve increased the federal funds (“Fed Funds”) target rate 425 bps in 2022. During the course of the year, the Company increased the rates paid on consumer, small business and commercial interest-bearing demand deposits. While money market deposit pricing was relatively rational during the first half of the year, competition in both the digital banking space and local markets intensified in the third quarter and continued into the fourth quarter, and deposit betas increased as a result.

Total interest expense for the fourth quarter of 2022 was $24.0 million, an increase of 58.9% compared to the third quarter of 2022, and an increase of 124.6% compared to the fourth quarter of 2021. During the fourth quarter of 2022, the average balance of interest-bearing deposits increased $79.7 million, or 2.7%, compared to the third quarter of 2022 and the cost of these deposits increased 104 bps. The increase in average interest-bearing deposit balances was due to an increase in average certificates and brokered deposit balances, which increased $183.2 million, or 17.7%, during the quarter while the cost of these deposits increased 76 bps. Additionally, the average balance of money market accounts increased $71.8 million, or 5.2%, compared to the third quarter of 2022 while the cost of these deposits increased 156 bps.

The average balance of noninterest-bearing deposits increased $11.6 million, or 9.4%, during the fourth quarter compared to the linked quarter, driven by deposits related to growth in construction lending. The average balance of BaaS – brokered deposits declined significantly as a large relationship was exited early in the quarter. However, deposits related to the program with Ramp on-boarded during the quarter began to see deposit inflows in December, which totaled $13.6 million at year end and are priced significantly lower than the exited relationship.

Additionally, with the inverted yield curve, the Company used medium- and longer-term brokered deposits, as well as longer-term FHLB advances, to supplement funding needs, manage long term interest rate risk and offset the impact of further increases in Fed Funds and other short term interest rates.



Net interest margin (“NIM”) was 2.09% for the fourth quarter of 2022, down from 2.40% for the third quarter of 2022 and 2.30% for the fourth quarter of 2021. Fully-taxable equivalent NIM (“FTE NIM”) was 2.22% for the fourth quarter of 2022, down from 2.53% for the third quarter of 2022 and 2.43% for the fourth quarter of 2021. The decreases in NIM and FTE NIM compared to the linked quarter were driven primarily by the effect of higher interest-bearing deposit costs, partially offset by higher yields on loans, securities and other earning assets and higher average loan balances.

Noninterest Income
Noninterest income for the fourth quarter of 2022 was $5.8 million, up $1.5 million, or 34.5%, from the third quarter of 2022, and down $1.9 million, or 24.5%, from the fourth quarter of 2021. Gain on sale of loans totaled $2.9 million for the fourth quarter of 2022, up $0.1 million, or 5.5%, from the linked quarter. Gain on sale revenue in the quarter consisted entirely of gain on the sales of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans. The increase in revenue related to SBA loan sales was due to a higher volume of sales, partially offset by lower net gain on sale premiums. Other income totaled $1.5 million for the fourth quarter of 2022, increasing $1.4 million compared to the linked quarter due to distributions received on certain Small Business Investment Company and venture capital fund investments. Mortgage banking revenue totaled $1.0 million for the fourth quarter of 2022 as the higher interest rate environment and other economic factors continued to impact interest rate lock and sold loan volume as well as gain on sale margins.

Noninterest Expense
Noninterest expense for the fourth quarter of 2022 was $18.5 million, up $0.5 million, or 2.9%, from the third quarter of 2022 and up $1.6 million, or 9.2%, from the fourth quarter of 2021. Other expense, consulting and professional fees, deposit insurance premium and premises and equipment costs increased from the linked quarter, while marketing, advertising and promotion costs and loan expenses were lower. The increases in other expense and premises and equipment were due to several items, none of which were individually significant. The increase in consulting and professional fees was due primarily to the timing of third party loan review. The increase in deposit insurance premium was due primarily to year-over-year asset growth as well as the composition of loans and deposits. The decreases in marketing costs and loan expenses were due primarily to lower mortgage origination activity.

Income Taxes
The Company reported an income tax expense of $0.5 million for the fourth quarter of 2022 and an effective tax rate of 7.3%, compared to an income tax expense of $1.0 million and an effective tax rate of 10.5% for the third quarter of 2022 and an income tax expense of $2.0 million and an effective tax rate of 13.8% for the fourth quarter of 2021. The lower effective tax rate for the fourth quarter of 2022 reflects the impact of the decline in taxable income during the second half of the year compared to estimates earlier in the year.

Loans and Credit Quality
Total loans as of December 31, 2022 were $3.5 billion, an increase of $243.5 million, or 7.5%, compared to September 30, 2022, and an increase of $611.7 million, or 21.2%, compared to December 31, 2021. Total commercial loan balances were $2.7 billion as of December 31, 2022, an increase of $184.3 million, or 7.3%, compared to September 30, 2022, and an increase of $355.5 million, or 15.0%, compared to December 31, 2021. Compared to the linked quarter, the increase in commercial loan balances was driven primarily by growth in franchise finance, single tenant lease financing, construction, commercial and industrial and small business lending balances. These items were partially offset by continued runoff in the healthcare finance portfolio.



Total consumer loan balances were $733.3 million as of December 31, 2022, an increase of $61.1 million, or 9.1%, compared to September 30, 2022, and an increase of $263.3 million, or 56.0%, compared to December 31, 2021. The increase compared to the linked quarter was due to higher balances in the residential mortgage, recreational vehicles and trailers loan portfolios.

Total delinquencies 30 days or more past due were 0.17% of total loans as of December 31, 2022, compared to 0.06% at September 30, 2022 and 0.04% as of December 31, 2022. The increase in delinquencies during the fourth quarter of 2022 was due to one construction loan that was brought current subsequent to year end. Overall credit quality remained strong during the quarter as nonperforming loans to total loans was 0.22% as of December 31, 2022, compared to 0.18% at September 30, 2022 and 0.26% as of December 31, 2021. Nonperforming loans totaled $7.5 million at December 31, 2022, up from $6.0 million at September 30, 2022.

The allowance for loan losses as a percentage of total loans was 0.91% as of December 31, 2022, compared to 0.92% as of September 30, 2022 and 0.96% as of December 31, 2021. While growth in the allowance for loan losses was generally in-line with overall loan portfolio growth, the slight decline in the allowance coverage ratio compared to the linked quarter reflects the removal of a specific reserve due to positive developments on a certain monitored loan, growth in certain portfolios with lower coverage ratios and the continued decline in healthcare finance balances that have a higher coverage ratio.

Net charge-offs of $0.2 million were recognized during the fourth quarter of 2022, resulting in net charge-offs to average loans of 0.03%, compared to net charge-offs to average loans of 0.02% for the third quarter of 2022 and net recoveries to average loans of 0.01% for the fourth quarter of 2021.

The provision for loan losses in the fourth quarter of 2022 was $2.1 million, compared to a provision of $0.9 million for the third quarter of 2022 and a benefit of $0.2 million for the fourth quarter of 2021. The provision for the quarter was driven by the overall growth in the loan portfolio, partially offset by the reduction in specific reserves mentioned above.

During the first quarter of 2023, the Company will be replacing its incurred loss model for recognizing credit losses with an expected loss model referred to as the current expected credit losses (“CECL”) model. As a result, the Company expects its initial adjustment to the allowance for credit losses to be in the range of $2.5 million to $3.0 million.

Capital
As of December 31, 2022, total shareholders’ equity was $365.0 million, an increase of $4.1 million, or 1.1%, compared to September 30, 2022, and a decrease of $15.4 million, or 4.0%, compared to December 31, 2021. The increase in shareholders’ equity during the fourth quarter of 2022 was due primarily to the net income earned during the quarter and a decrease in accumulated other comprehensive loss resulting from an increase in the value of the available-for-sale securities portfolio caused by the decline in long-term interest rates during the quarter. This was partially offset by a decrease in the fair value of interest rate swaps classified as cash flow hedges and stock repurchase activity. Book value per common share increased to $40.26 as of December 31, 2022, up from $38.84 as of September 30, 2022 and $38.99 as of December 31, 2021. Tangible book value per share was $39.74, up from $38.34 as of September 30, 2022 and $38.51 as of December 31, 2021.

In connection with its previously announced stock repurchase program, the Company repurchased 284,286 shares of its common stock during the fourth quarter of 2022 at an average price of $25.16 per share. Including shares repurchased during the fourth quarter of 2021, the Company has repurchased $32.2 million of stock under its authorized programs.



The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of December 31, 2022.

As of December 31, 2022
CompanyBank
Total shareholders' equity to assets 8.03 %9.72 %
Tangible common equity to tangible assets 1
7.94 %9.62 %
Tier 1 leverage ratio 2
9.06 %10.84 %
Common equity tier 1 capital ratio 2
10.93 %13.10 %
Tier 1 capital ratio 2
10.93 %13.10 %
Total risk-based capital ratio 2
14.75 %13.99 %
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 2:00 p.m. Eastern Time on Thursday, January 26, 2023 to discuss its quarterly financial results. The call can be accessed via telephone at (844) 200-6205; access code: 960605. A recorded replay can be accessed through February 25, 2023 by dialing (866) 813-9403; access code: 361353.

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 financial holding company with assets of $4.5 billion as of December 31, 2022. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. First Internet Bank provides consumer and small business deposit, SBA financing, franchise finance, 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 First Internet Bank, including its products and services, is available at www.firstib.com.


Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements with respect to 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,” “continue,” “could,” “estimate,” “expect,” “growth,” “help,” “may,” “opportunities,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “thereafter,” “well-positioned,” “will,” 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: 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 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 and industrial, construction, SBA, and franchise finance loan portfolios;


competition with national, regional and community financial institutions; the loss of any key members of senior management; the anticipated impacts of inflation and rising interest rates on the general economy; 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, adjusted 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, provision (benefit) for loan losses, excluding tax refund advance loans, average loans, excluding tax refund advance loans, net charge-offs (recoveries) to average loans, excluding tax refund advance loans, allowance for loan losses to loans, excluding PPP loans, adjusted total revenue, adjusted noninterest income, adjusted noninterest expense, 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, adjusted effective income tax rate, income before income taxes, excluding tax refund advance loans, income tax provision, excluding tax refund advance loans and net income, excluding tax refund advance loans 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 EndedTwelve Months Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Net income$6,351 $8,436 $12,478 $35,541 $48,114 
Per share and share information
Earnings per share - basic$0.68 $0.89 $1.26 $3.73 $4.85 
Earnings per share - diluted0.68 0.89 1.25 3.70 4.82 
Dividends declared per share0.06 0.06 0.06 0.24 0.24 
Book value per common share40.26 38.84 38.99 40.26 38.99 
Tangible book value per common share 1
39.74 38.34 38.51 39.74 38.51 
Common shares outstanding9,065,883 9,290,885 9,754,455 9,065,883 9,754,455 
Average common shares outstanding:
Basic9,281,309 9,458,259 9,903,856 9,530,921 9,918,083 
Diluted9,343,533 9,525,855 9,989,951 9,595,115 9,976,261 
Performance ratios
Return on average assets0.59 %0.82 %1.19 %0.85 %1.14 %
Return on average shareholders' equity6.91 %9.01 %13.14 %9.53 %13.44 %
Return on average tangible common equity 1
7.00 %9.13 %13.30 %9.65 %13.61 %
Net interest margin2.09 %2.40 %2.30 %2.41 %2.11 %
Net interest margin - FTE 1,2
2.22 %2.53 %2.43 %2.54 %2.25 %
Capital ratios 3
Total shareholders' equity to assets8.03 %8.46 %9.03 %8.03 %9.03 %
Tangible common equity to tangible assets 1
7.94 %8.36 %8.93 %7.94 %8.93 %
Tier 1 leverage ratio9.06 %9.49 %9.22 %9.06 %9.22 %
Common equity tier 1 capital ratio10.93 %11.72 %12.93 %10.93 %12.93 %
Tier 1 capital ratio10.93 %11.72 %12.93 %10.93 %12.93 %
Total risk-based capital ratio14.75 %15.73 %17.37 %14.75 %17.37 %
Asset quality
Nonperforming loans$7,529 $6,006 $7,401 $7,529 $7,401 
Nonperforming assets7,571 6,006 8,618 7,571 8,618 
Nonperforming loans to loans0.22 %0.18 %0.26 %0.22 %0.26 %
Nonperforming assets to total assets0.17 %0.14 %0.20 %0.17 %0.20 %
Allowance for loan losses to:
Loans0.91 %0.92 %0.96 %0.91 %0.96 %
Loans, excluding PPP loans 1
0.91 %0.92 %0.97 %0.91 %0.97 %
Nonperforming loans421.5 %497.3 %376.2 %421.5 %376.2 %
Net charge-offs (recoveries) to average loans0.03 %0.02 %(0.01 %)0.03 %0.09 %
Average balance sheet information
Loans$3,382,212 $3,161,850 $2,914,858 $3,123,972 $2,972,224 
Total securities578,608 606,329 677,580 613,303 629,095 
Other earning assets149,910 188,467 431,621 278,073 466,608 
Total interest-earning assets4,119,897 3,970,650 4,056,254 4,033,542 4,094,935 
Total assets4,263,246 4,105,688 4,177,578 4,170,526 4,205,926 
Noninterest-bearing deposits135,702 124,067 113,887 120,325 101,825 
Interest-bearing deposits3,041,022 2,961,327 3,032,435 3,022,794 3,098,706 
Total deposits3,176,724 3,085,394 3,146,322 3,143,119 3,200,531 
Shareholders' equity364,657 371,303 376,832 372,844 358,105 
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, 2021)
Dollar amounts in thousands
December 31,
2022		September 30,
2022		December 31,
2021
Assets
Cash and due from banks$17,426 $14,743 $7,492 
Interest-bearing deposits239,126 206,309 435,468 
Securities available-for-sale, at fair value390,384 393,565 603,044 
Securities held-to-maturity, at amortized cost189,168 191,057 59,565 
Loans held-for-sale21,511 23,103 47,745 
Loans3,499,401 3,255,906 2,887,662 
Allowance for loan losses(31,737)(29,866)(27,841)
Net loans3,467,664 3,226,040 2,859,821 
Accrued interest receivable21,069 16,918 16,037 
Federal Home Loan Bank of Indianapolis stock28,350 28,350 25,650 
Cash surrender value of bank-owned life insurance39,859 39,612 38,900 
Premises and equipment, net72,711 70,747 59,842 
Goodwill4,687 4,687 4,687 
Servicing asset6,255 5,795 4,702 
Other real estate owned— — 1,188 
Accrued income and other assets44,894 43,498 46,853 
Total assets$4,543,104 $4,264,424 $4,210,994 
Liabilities
Noninterest-bearing deposits$175,315 $142,875 $117,531 
Interest-bearing deposits3,265,930 3,049,769 3,061,428 
Total deposits3,441,245 3,192,644 3,178,959 
Advances from Federal Home Loan Bank614,928 589,926 514,922 
Subordinated debt104,532 104,456 104,231 
Accrued interest payable2,913 1,887 2,018 
Accrued expenses and other liabilities14,512 14,654 30,526 
Total liabilities4,178,130 3,903,567 3,830,656 
Shareholders' equity
Voting common stock192,935 200,123 218,946 
Retained earnings205,675 199,877 172,431 
Accumulated other comprehensive loss(33,636)(39,143)(11,039)
Total shareholders' equity364,974 360,857 380,338 
Total liabilities and shareholders' equity$4,543,104 $4,264,424 $4,210,994 


First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited, except for the twelve months ended December 31, 2021)
Dollar amounts in thousands, except per share data
Three Months EndedTwelve Months Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Interest income
Loans$40,354 $34,643 $31,621 $140,600 $123,467 
Securities - taxable3,222 2,701 1,973 10,711 7,970 
Securities - non-taxable699 491 236 1,767 1,017 
Other earning assets1,394 1,264 362 3,830 1,429 
Total interest income45,669 39,099 34,192 156,908 133,883 
Interest expense
Deposits18,807 10,520 6,399 41,832 29,822 
Other borrowed funds5,193 4,585 4,288 17,983 17,505 
Total interest expense24,000 15,105 10,687 59,815 47,327 
Net interest income21,669 23,994 23,505 97,093 86,556 
Provision (benefit) for loan losses2,109 892 (238)4,977 1,030 
Net interest income after provision (benefit) for loan losses19,560 23,102 23,743 92,116 85,526 
Noninterest income
Service charges and fees226 248 292 1,071 1,114 
Loan servicing revenue715 653 544 2,573 1,934 
Loan servicing asset revaluation(539)(333)(400)(1,639)(1,069)
Mortgage banking activities1,010 871 2,776 5,464 15,050 
Gain on sale of loans2,862 2,713 4,137 11,372 11,598 
Gain on sale of premises and equipment— — — — 2,523 
Other1,533 164 345 2,416 1,694 
Total noninterest income5,807 4,316 7,694 21,257 32,844 
Noninterest expense
Salaries and employee benefits10,404 10,439 10,183 41,553 38,223 
Marketing, advertising and promotion837 1,041 896 3,554 3,261 
Consulting and professional fees914 790 1,262 4,826 4,054 
Data processing567 483 425 1,989 1,649 
Loan expenses1,018 1,142 654 4,435 2,112 
Premises and equipment2,921 2,808 2,188 10,688 7,063 
Deposit insurance premium355 229 283 1,152 1,213 
Other1,497 1,063 1,064 5,076 4,223 
Total noninterest expense18,513 17,995 16,955 73,273 61,798 
Income before income taxes6,854 9,423 14,482 40,100 56,572 
Income tax provision503 987 2,004 4,559 8,458 
Net income$6,351 $8,436 $12,478 $35,541 $48,114 
Per common share data
Earnings per share - basic$0.68 $0.89 $1.26 $3.73 $4.85 
Earnings per share - diluted$0.68 $0.89 $1.25 $3.70 $4.82 
Dividends declared per share$0.06 $0.06 $0.06 $0.24 $0.24 
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
December 31, 2022September 30, 2022December 31, 2021
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield/ Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,391,379 $40,354 4.72 %$3,175,854 $34,643 4.33 %$2,947,053 $31,621 4.26 %
Securities - taxable508,725 3,222 2.51 %532,470 2,701 2.01 %595,024 1,973 1.32 %
Securities - non-taxable69,883 699 3.97 %73,859 491 2.64 %82,556 236 1.13 %
Other earning assets149,910 1,394 3.69 %188,467 1,264 2.66 %431,621 362 0.33 %
Total interest-earning assets4,119,897 45,669 4.40 %3,970,650 39,099 3.91 %4,056,254 34,192 3.34 %
Allowance for loan losses(30,543)(29,423)(27,946)
Noninterest-earning assets173,892 164,461 149,270 
Total assets$4,263,246 $4,105,688 $4,177,578 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$326,102 $628 0.76 %$342,116 $551 0.64 %$210,283 $158 0.30 %
Savings accounts47,799 104 0.86 %57,700 111 0.76 %63,575 58 0.36 %
Money market accounts1,441,583 10,508 2.89 %1,369,783 4,581 1.33 %1,453,447 1,507 0.41 %
BaaS - brokered deposits4,563 13 1.13 %153,936 859 2.21 %— — 0.00 %
Certificates and brokered deposits1,220,975 7,554 2.45 %1,037,792 4,418 1.69 %1,305,130 4,676 1.42 %
Total interest-bearing deposits3,041,022 18,807 2.45 %2,961,327 10,520 1.41 %3,032,435 6,399 0.84 %
Other borrowed funds712,465 5,193 2.89 %637,877 4,585 2.85 %619,115 4,288 2.75 %
Total interest-bearing liabilities3,753,487 24,000 2.54 %3,599,204 15,105 1.67 %3,651,550 10,687 1.16 %
Noninterest-bearing deposits135,702 124,067 113,887 
Other noninterest-bearing liabilities9,400 11,114 35,309 
Total liabilities3,898,589 3,734,385 3,800,746 
Shareholders' equity364,657 371,303 376,832 
Total liabilities and shareholders' equity$4,263,246 $4,105,688 $4,177,578 
Net interest income$21,669 $23,994 $23,505 
Interest rate spread1.86 %2.24 %2.18 %
Net interest margin2.09 %2.40 %2.30 %
Net interest margin - FTE 2,3
2.22 %2.53 %2.43 %
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
Twelve Months Ended
December 31, 2022December 31, 2021
Average BalanceInterest / DividendsYield/CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,142,166 $140,600 4.47 %$2,999,232 $123,467 4.12 %
Securities - taxable537,921 10,711 1.99 %544,613 7,970 1.46 %
Securities - non-taxable75,382 1,767 2.34 %84,482 1,017 1.20 %
Other earning assets278,073 3,830 1.38 %466,608 1,429 0.31 %
Total interest-earning assets4,033,542 156,908 3.89 %4,094,935 133,883 3.27 %
Allowance for loan losses(29,143)(29,068)
Noninterest-earning assets166,127 140,059 
Total assets$4,170,526 $4,205,926 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$333,737 $2,056 0.62 %$195,699 $583 0.30 %
Savings accounts58,156 336 0.58 %56,967 203 0.36 %
Money market accounts1,423,185 18,513 1.30 %1,434,829 5,892 0.41 %
BaaS - brokered deposits60,699 1,033 1.70 %— — 0.00 %
Certificates and brokered deposits1,147,017 19,894 1.73 %1,411,211 23,144 1.64 %
Total interest-bearing deposits3,022,794 41,832 1.38 %3,098,706 29,822 0.96 %
Other borrowed funds638,526 17,983 2.82 %600,035 17,505 2.92 %
Total interest-bearing liabilities3,661,320 59,815 1.63 %3,698,741 47,327 1.28 %
Noninterest-bearing deposits120,325 101,825 
Other noninterest-bearing liabilities16,037 47,255 
Total liabilities3,797,682 3,847,821 
Shareholders' equity372,844 358,105 
Total liabilities and shareholders' equity$4,170,526 $4,205,926 
Net interest income$97,093 $86,556 
Interest rate spread2.26 %1.99 %
Net interest margin2.41 %2.11 %
Net interest margin - FTE 2,3
2.54 %2.25 %
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
December 31, 2022September 30, 2022December 31, 2021
AmountPercentAmountPercentAmountPercent
Commercial loans
Commercial and industrial$126,108 3.6 %$104,780 3.2 %$96,008 3.3 %
Owner-occupied commercial real estate61,836 1.8 %58,615 1.8 %66,732 2.3 %
Investor commercial real estate93,121 2.7 %91,021 2.8 %28,019 1.0 %
Construction181,966 5.2 %139,509 4.3 %136,619 4.7 %
Single tenant lease financing939,240 26.8 %895,302 27.4 %865,854 30.0 %
Public finance621,032 17.7 %614,139 18.9 %592,665 20.5 %
Healthcare finance272,461 7.8 %293,686 9.0 %387,852 13.4 %
Small business lending123,750 3.5 %113,001 3.5 %108,666 3.8 %
Franchise finance299,835 8.6 %225,012 6.8 %81,448 2.8 %
Total commercial loans2,719,349 77.7 %2,535,065 77.7 %2,363,863 81.8 %
Consumer loans
Residential mortgage383,948 11.0 %337,565 10.4 %186,770 6.5 %
Home equity24,712 0.7 %22,114 0.7 %17,665 0.6 %
Trailers167,326 4.8 %162,161 5.0 %146,267 5.1 %
Recreational vehicles121,808 3.5 %115,694 3.6 %90,654 3.1 %
Other consumer loans35,464 1.0 %34,657 1.1 %28,557 1.0 %
Total consumer loans733,258 21.0 %672,191 20.8 %469,913 16.3 %
Net deferred loan fees, premiums, discounts and other 1
46,794 1.3 %48,650 1.5 %53,886 1.9 %
Total loans$3,499,401 100.0 %$3,255,906 100.0 %$2,887,662 100.0 %
December 31, 2022September 30, 2022December 31, 2021
AmountPercentAmountPercentAmountPercent
Deposits
Noninterest-bearing deposits$175,315 5.1 %$142,635 4.5 %$117,531 3.7 %
Interest-bearing demand deposits335,611 9.8 %337,765 10.6 %247,967 7.8 %
Savings accounts44,819 1.3 %52,228 1.6 %59,998 1.9 %
Money market accounts1,418,599 41.2 %1,378,087 43.2 %1,483,936 46.7 %
BaaS - brokered deposits13,607 0.4 %96,287 3.0 %— 0.0 %
Certificates of deposits874,490 25.4 %773,040 24.2 %970,107 30.5 %
Brokered deposits 578,804 16.8 %412,602 12.9 %299,420 9.4 %
Total deposits$3,441,245 100.0 %$3,192,644 100.0 %$3,178,959 100.0 %
1 Includes carrying value adjustments of $32.5 million, $33.9 million and $37.5 million related to terminated interest rate swaps associated with public finance loans as of December 31, 2022, September 30, 2022 and December 31, 2021, respectively.






















First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedTwelve Months Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Total equity - GAAP$364,974 $360,857 $380,338 $364,974 $380,338 
Adjustments:
     Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible common equity$360,287 $356,170 $375,651 $360,287 $375,651 
Total assets - GAAP$4,543,104 $4,264,424 $4,210,994 $4,543,104 $4,210,994 
Adjustments:
     Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible assets$4,538,417 $4,259,737 $4,206,307 $4,538,417 $4,206,307 
Common shares outstanding9,065,883 9,290,885 9,754,455 9,065,883 9,754,455 
Book value per common share$40.26 $38.84 $38.99 $40.26 $38.99 
Effect of goodwill(0.52)(0.50)(0.48)(0.52)(0.48)
Tangible book value per common share$39.74 $38.34 $38.51 $39.74 $38.51 
Total shareholders' equity to assets8.03 %8.46 %9.03 %8.03 %9.03 %
Effect of goodwill(0.09 %)(0.10 %)(0.10 %)(0.09 %)(0.10 %)
Tangible common equity to tangible assets7.94 %8.36 %8.93 %7.94 %8.93 %
Total average equity - GAAP$364,657 $371,303 $376,832 $372,844 $358,105 
Adjustments:
      Average goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Average tangible common equity$359,970 $366,616 $372,145 $368,157 $353,418 
Return on average shareholders' equity6.91 %9.01 %13.14 %9.53 %13.44 %
Effect of goodwill0.09 %0.12 %0.16 %0.12 %0.17 %
Return on average tangible common equity7.00 %9.13 %13.30 %9.65 %13.61 %
Total interest income$45,669 $39,099 $34,192 $156,908 $133,883 
Adjustments:
      Fully-taxable equivalent adjustments 1
1,384 1,280 1,348 5,355 5,453 
Total interest income - FTE$47,053 $40,379 $35,540 $162,263 $139,336 
Total interest income - FTE$47,053 $40,379 $35,540 $162,263 $139,336 
Adjustments:
     Income from tax refund advance loans— — — (3,013)— 
Adjusted total interest income - FTE$47,053 $40,379 $35,540 $159,250 $139,336 
Net interest income$21,669 $23,994 $23,505 $97,093 $86,556 
Adjustments:
      Fully-taxable equivalent adjustments 1
1,384 1,280 1,348 5,355 5,453 
Net interest income - FTE$23,053 $25,274 $24,853 $102,448 $92,009 
Net interest income$21,669 $23,994 $23,505 $97,093 $86,556 
Adjustments:
      Subordinated debt redemption cost— — — — 810 
      Income from tax refund advance loans— — — (3,013)— 
Adjusted net interest income $21,669 $23,994 $23,505 94,080 $87,366 
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 EndedTwelve Months Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Net interest income$21,669 $23,994 $23,505 $97,093 $86,556 
Adjustments:
      Fully-taxable equivalent adjustments 1
1,384 1,280 1,348 5,355 5,453 
      Subordinated debt redemption cost— — — — 810 
      Income from tax refund advance loans— — — (3,013)— 
Adjusted net interest income - FTE$23,053 $25,274 $24,853 $99,435 $92,819 
Net interest margin2.09 %2.40 %2.30 %2.41 %2.11 %
Effect of fully-taxable equivalent adjustments 1
0.13 %0.13 %0.13 %0.13 %0.14 %
Net interest margin - FTE2.22 %2.53 %2.43 %2.54 %2.25 %
Net interest margin2.09 %2.40 %2.30 %2.41 %2.11 %
Effect of subordinated debt redemption cost0.00 %0.00 %0.00 %0.00 %0.02 %
Effect of income from tax refund advance loans0.00 %0.00 %0.00 %(0.07 %)0.00 %
Adjusted net interest margin2.09 %2.40 %2.30 %2.34 %2.13 %
Net interest margin2.09 %2.40 %2.30 %2.41 %2.11 %
Effect of fully-taxable equivalent adjustments 1
0.13 %0.13 %0.13 %0.13 %0.14 %
Effect of subordinated debt redemption cost0.00 %0.00 %0.00 %0.00 %0.02 %
Effect of income from tax refund advance loans0.00 %0.00 %0.00 %(0.07 %)0.00 %
Adjusted net interest margin - FTE2.22 %2.53 %2.43 %2.47 %2.27 %
Provision (benefit) for loan losses$2,109 $892 $(238)$4,977 $1,030 
Adjustments:
    Provision for tax refund advance loans losses— — — (1,860)— 
Provision (benefit) for loan losses, excluding tax refund advance loans$2,109 $892 $(238)$3,117 $1,030 
Average loans$3,382,212 $3,161,850 $2,914,858 $3,123,972 $2,972,224 
Adjustments:
    Average tax refund advance loans— — — (15,712)— 
Average loans, excluding tax refund advance loans$3,382,212 $3,161,850 $2,914,858 $3,108,260 $2,972,224 
Net charge-offs (recoveries) to average loans0.03 %0.02 %(0.01 %)0.03 %0.09 %
Adjustments:
Effect of tax refund advance lending net charge-offs (recoveries) to average loans0.00 %0.00 %0.00 %(0.06 %)0.00 %
Net charge-offs (recoveries) to average loans, excluding tax refund advance loans0.03 %0.02 %(0.01 %)(0.03 %)0.09 %
Allowance for loan losses$31,737 $29,866 $27,841 $31,737 $27,841 
Loans$3,499,401 $3,255,906 $2,887,662 $3,499,401 $2,887,662 
Adjustments:
     PPP loans— — (3,152)— (3,152)
Loans, excluding PPP loans$3,499,401 $3,255,906 $2,884,510 $3,499,401 $2,884,510 
Allowance for loan losses to loans0.91 %0.92 %0.96 %0.91 %0.96 %
Effect of PPP loans0.00 %0.00 %0.01 %0.00 %0.01 %
Allowance for loan losses to loans, excluding PPP loans0.91 %0.92 %0.97 %0.91 %0.97 %
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 EndedTwelve Months Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Total revenue - GAAP$27,476 $28,310 $31,199 $118,350 $119,400 
Adjustments:
     Gain on sale of premises and equipment— — — — (2,523)
     Subordinated debt redemption cost— — — — 810 
Adjusted total revenue$27,476 $28,310 $31,199 $118,350 $117,687 
Noninterest income - GAAP$5,807 $4,316 $7,694 $21,257 $32,844 
Adjustments:
     Gain on sale of premises and equipment— — — — (2,523)
Adjusted noninterest income$5,807 $4,316 $7,694 $21,257 $30,321 
Noninterest expense - GAAP$18,513 $17,995 $16,955 $73,273 $61,798 
Adjustments:
     Acquisition-related expenses— — (163)(273)(163)
     Write-down of software— (125)— (125)— 
     IT Termination fee— — (475)— (475)
     Nonrecurring consulting fee— — — (875)— 
     Discretionary inflation bonus— — — (531)— 
     Accelerated equity compensation— — — (289)— 
Adjusted noninterest expense$18,513 $17,870 $16,317 $71,180 $61,160 
Income before income taxes - GAAP$6,854 $9,423 $14,482 $40,100 $56,572 
Adjustments:1
     Gain on sale of premises and equipment— — — — (2,523)
     Acquisition-related expenses— — 163 273 163 
     Write-down of software— 125 — 125 — 
     IT Termination fee— — 475 — 475 
     Subordinated debt redemption cost— — — — 810 
     Nonrecurring consulting fee— — — 875 — 
     Discretionary inflation bonus— — — 531 — 
     Accelerated equity compensation— — — 289 — 
Adjusted income before income taxes$6,854 $9,548 $15,120 $42,193 $55,497 
Income tax provision - GAAP$503 $987 $2,004 $4,559 $8,458 
Adjustments:1
     Gain on sale of premises and equipment— — — — (530)
     Acquisition-related expenses— — 34 57 34 
     Write-down of software— 26 — 26 — 
     IT Termination fee— — 100 — 100 
     Subordinated debt redemption cost— — — — 170 
     Nonrecurring consulting fee— — — 184 — 
     Discretionary inflation bonus— — — 112 — 
     Accelerated equity compensation— — — 61 — 
Adjusted income tax provision$503 $1,013 $2,138 $4,999 $8,232 
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 EndedTwelve Months Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Net income - GAAP$6,351 $8,436 $12,478 $35,541 $48,114 
Adjustments:
     Gain on sale of premises and equipment— — — — (1,993)
     Acquisition-related expenses— — 129 216 129 
     Write-down of software— 99 — 99 — 
     IT Termination fee— — 375 — 375 
     Subordinated debt redemption cost— — — — 640 
     Nonrecurring consulting fee— — — 691 — 
     Discretionary inflation bonus— — — 419 — 
     Accelerated equity compensation— — — 228 — 
Adjusted net income$6,351 $8,535 $12,982 $37,194 $47,265 
Diluted average common shares outstanding9,343,533 9,525,855 9,989,951 9,595,115 9,976,261 
Diluted earnings per share - GAAP$0.68 $0.89 $1.25 $3.70 $4.82 
Adjustments:
   Effect of gain on sale of premises and equipment— — — — (0.19)
   Effect of acquisition-related expenses— — 0.01 0.02 0.01 
   Effect of write-down of software— 0.01 — 0.01 — 
   Effect of IT termination fee— — 0.04 — 0.04 
   Effect of nonrecurring consulting fee— — — 0.07 — 
   Effect of subordinated debt redemption cost— — — — 0.06 
   Effect of discretionary inflation bonus— — — 0.04 — 
   Effect of accelerated equity compensation— — — 0.02 — 
Adjusted diluted earnings per share$0.68 $0.90 $1.30 $3.86 $4.74 
Return on average assets0.59 %0.82 %1.19 %0.85 %1.14 %
   Effect of gain on sale of premises and equipment 0.00 %0.00 %0.00 %0.00 %(0.05 %)
   Effect of acquisition-related expenses0.00 %0.00 %0.01 %0.01 %0.00 %
   Effect of write-down of software0.00 %0.01 %0.00 %0.00 %0.00 %
   Effect of IT termination fee0.00 %0.00 %0.04 %0.00 %0.01 %
   Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.02 %0.00 %
   Effect of subordinated debt redemption cost0.00 %0.00 %0.00 %0.00 %0.02 %
   Effect of discretionary inflation bonus0.00 %0.00 %0.00 %0.01 %0.00 %
   Effect of accelerated equity compensation0.00 %0.00 %0.00 %0.01 %0.00 %
Adjusted return on average assets0.59 %0.83 %1.24 %0.90 %1.12 %
Return on average shareholders' equity6.91 %9.01 %13.14 %9.53 %13.44 %
   Effect of gain on sale of premises and equipment0.00 %0.00 %0.00 %0.00 %(0.56 %)
   Effect of acquisition-related expenses0.00 %0.00 %0.14 %0.06 %0.04 %
   Effect of write-down of software0.00 %0.11 %0.00 %0.03 %0.00 %
   Effect of IT termination fee0.00 %0.00 %0.39 %0.00 %0.10 %
   Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.19 %0.00 %
   Effect of subordinated debt redemption cost0.00 %0.00 %0.00 %0.00 %0.18 %
   Effect of discretionary inflation bonus0.00 %0.00 %0.00 %0.11 %0.00 %
   Effect of accelerated equity compensation0.00 %0.00 %0.00 %0.06 %0.00 %
Adjusted return on average shareholders' equity6.91 %9.12 %13.67 %9.98 %13.20 %


First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedTwelve Months Ended
December 31,
2022		September 30,
2022		December 31,
2021		December 31,
2022		December 31,
2021
Return on average tangible common equity7.00 %9.13 %13.30 %9.65 %13.61 %
   Effect of gain on sale of premises and equipment0.00 %0.00 %0.00 %0.00 %(0.56 %)
   Effect of acquisition-related expenses0.00 %0.00 %0.14 %0.06 %0.04 %
   Effect of write-down of software0.00 %0.11 %0.00 %0.03 %0.00 %
   Effect of IT termination fee0.00 %0.00 %0.40 %0.00 %0.10 %
   Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.19 %0.00 %
   Effect of subordinated debt redemption cost0.00 %0.00 %0.00 %0.00 %0.18 %
   Effect of discretionary inflation bonus0.00 %0.00 %0.00 %0.11 %0.00 %
   Effect of accelerated equity compensation0.00 %0.00 %0.00 %0.06 %0.00 %
Adjusted return on average tangible common equity7.00 %9.24 %13.84 %10.10 %13.37 %
Effective income tax rate7.3 %10.5 %13.8 %11.4 %15.0 %
   Effect of gain on sale of premises and equipment0.0 %0.0 %0.0 %0.0 %(0.4 %)
   Effect of acquisition-related expenses0.0 %0.0 %0.1 %0.1 %0.0 %
   Effect of write-down of software0.0 %0.3 %0.0 %0.1 %0.0 %
   Effect of IT termination fee0.0 %0.0 %0.2 %0.0 %0.1 %
   Effect of nonrecurring consulting fee0.0 %0.0 %0.0 %0.4 %0.0 %
   Effect of subordinated debt redemption cost0.0 %0.0 %0.0 %0.0 %0.1 %
   Effect of discretionary inflation bonus0.0 %0.0 %0.0 %0.3 %0.0 %
   Effect of accelerated equity compensation0.0 %0.0 %0.0 %0.1 %0.0 %
Adjusted effective income tax rate7.3 %10.8 %14.1 %12.4 %14.8 %
Income before income taxes - GAAP$6,854 $9,423 $14,482 $40,100 $56,572 
Adjustments:
   Income from tax refund advance lending— — — (3,013)— 
   Provision for tax refund advance lending losses— — — 1,860 — 
   Tax refund advance lending servicing fee— — — 930 — 
Income before income taxes, excluding tax refund advance loans$6,854 $9,423 $14,482 $39,877 $56,572 
Income tax provision - GAAP$503 $987 $2,004 $4,559 $8,458 
Adjustments: 1
   Income from tax refund advance lending— — — (633)— 
   Provision for tax refund advance lending losses— — — 391 — 
   Tax refund advance lending servicing fee— — — 195 — 
Income tax provision, excluding tax refund advance loans$503 $987 $2,004 $4,512 $8,458 
Net income - GAAP$6,351 $8,436 $12,478 $35,541 $48,114 
Adjustments:
   Income from tax refund advance lending — — — (2,380)— 
   Provision for tax refund advance lending losses— — — 1,469 — 
   Tax refund advance lending servicing fee— — — 735 — 
Net income, excluding tax refund advance loans$6,351 $8,436 $12,478 $35,365 $48,114 
1 Assuming a 21% tax rate