First Internet Bancorp
07/21/2021 | Press release | Distributed by Public on 07/21/2021 14:34
First Internet Bancorp Reports Second Quarter 2021 Results (Form 8-K)
First Internet Bancorp Reports Second Quarter 2021 Results
Highlights for the second quarter include:
•Record net income of $13.1 million, an increase of 233.1% over the second quarter of 2020
•Record diluted earnings per share of $1.31, an increase of 227.5% over the second quarter of 2020
•Adjusted net income of $11.1 million, or $1.11 per diluted share, when excluding a $2.5 million pre-tax gain on the sale of the Company's corporate headquarters
•Total revenue of $30.6 million, an increase of 57.6% over the second quarter of 2020
•Adjusted revenue of $28.0 million, an increase of 44.6% over the second quarter of 2020
•Net interest margin and fully-taxable equivalent net interest margin each increased 7 basis points ('bps') from the first quarter of 2021, driven by a 13 bp decrease in the cost of interest-bearing deposits
Fishers, Indiana, July 21, 2021 - First Internet Bancorp (the 'Company') (Nasdaq: INBK), the parent company of First Internet Bank (the 'Bank'), announced today financial and operational results for the second quarter of 2021. Net income for the second quarter of 2021 was $13.1 million, or $1.31 diluted earnings per share. This compares to net income of $10.5 million, or $1.05 diluted earnings per share, for the first quarter of 2021, and net income of $3.9 million, or $0.40 diluted earnings per share, for the second quarter of 2020.
'We produced strong operating results for the second quarter of 2021 driven by net interest margin expansion and disciplined expense management,' said David Becker, Chairman and Chief Executive Officer. 'We also maintained excellent credit quality, as nonperforming loans declined during the quarter and delinquencies were at historically low levels. Additionally, our growing national SBA platform steadily gained momentum and drove higher gain-on-sale revenue. Looking forward, pipelines in SBA, as well as in other key lines of business, grew significantly during the quarter, leaving us well-positioned to capitalize on loan growth opportunities in the second half of 2021.
Mr. Becker concluded, 'We continue to challenge ourselves to imagine more. First Internet Bank has fostered a workplace culture that promotes innovation, collaboration and customer focus. This is reflected in our being named one of the 'Top Workplaces in Central Indiana' for the eighth consecutive year. I would like to thank the entire First Internet Bank team for helping to deliver record earnings performance for the quarter.'
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2021 was $21.6 million, compared to $20.5 million for the first quarter of 2021 and $14.4 million for the second quarter of 2020. On a fully-taxable equivalent
basis, net interest income for the second quarter of 2021 was $23.0 million, compared to $21.9 million for the first quarter of 2021 and $15.9 million for the second quarter of 2020.
Total interest income for the second quarter of 2021 was $33.4 million, an increase of 0.3% compared to the first quarter of 2021 and a decrease of 2.5% compared to the second quarter of 2020. On a fully-taxable equivalent basis, total interest income for the second quarter of 2021 was $34.8 million, an increase of 0.4% compared to the first quarter of 2021 and a decrease of 2.5% compared to the second quarter of 2020. The modest increase in total interest income compared to the first quarter of 2021 was driven primarily by a 0.7% increase in the average balance of interest-earning assets, which was partially offset by a 5 bp decrease in the yield on these assets. The yield on interest-earning assets for the second quarter of 2021 decreased to 3.26% from 3.31% in the prior quarter due primarily to changes in the earning asset mix. Average loan balances, including loans held for sale, decreased $62.8 million, or 2.0%, while the average balances of other earning assets and securities increased $63.7 million, or 14.3%, and $26.3 million, or 4.8%, respectively.
Total interest expense for the second quarter of 2021 was $11.8 million, a decrease of 7.7% compared to the first quarter of 2021 and a decrease of 40.5% compared to the second quarter of 2020. The decrease in total interest expense compared to the linked quarter was due primarily to a 13 bp decline in the cost of interest-bearing deposits as well as a slight decline of 0.2% in the average balance of these deposits. The decrease in deposit costs reflects the continued decline in the rates paid on interest-bearing deposits as well as a shift in the deposit mix due to a reduction in the average balance of certificates and brokered deposits.
During the second quarter of 2021, the cost of money market deposits remained stable compared to the linked quarter while the average balance of these deposits increased $46.8 million, or 3.4%. Furthermore, the cost of certificates and brokered deposits decreased by 21 bps and average balances decreased by $75.4 million, or 5.0%. During the second quarter of 2021, new certificates of deposit were originated at a weighted average cost of 44 bps while maturing certificates of deposit had a weighted average cost of 174 bps, a difference of 130 bps.
Net interest margin ('NIM') improved to 2.11% for the second quarter of 2021, up from 2.04% for the first quarter of 2021 and 1.37% for the second quarter of 2020. Fully-taxable equivalent NIM ('FTE NIM') increased to 2.25% for the second quarter of 2021, up from 2.18% for the first quarter of 2021 and 1.50% for the second quarter of 2020. The increases in NIM and FTE NIM compared to the linked quarter were driven primarily by lower interest-bearing deposit costs, partially offset by the change in the earning asset mix.
Noninterest Income
Noninterest income for the second quarter of 2021 was $9.0 million, compared to $8.4 million for the first quarter of 2021 and $5.0 million for the second quarter of 2020. The increase compared to the linked quarter was driven primarily by a gain on sale of premises and equipment and gain on sale of loans, partially offset by lower revenues from mortgage banking activities. During the second quarter of 2021, the Company completed the sale of its headquarters, resulting in a $2.5 million gain. Gain on sale of loans totaled $3.0 million for the quarter, increasing $1.3 million compared to the first quarter of 2021, due to an increase in the volume of U.S. Small Business Administration ('SBA') 7(a) guaranteed loan sales and an increase in secondary market premiums during the quarter. Mortgage banking revenue totaled $2.7 million for the second quarter of 2021, down $3.1 million from the linked quarter, due primarily to decreases in interest rate locks, sold loan volume and margins.
Noninterest Expense
Noninterest expense for the second quarter of 2021 was $15.1 million, compared to $15.3 million for the first quarter of 2021 and $13.2 million for the second quarter of 2020. Noninterest expense decreased slightly on a linked-quarter basis, driven primarily by decreases of $0.3 million in salaries
and employee benefits and $0.2 million in deposit insurance premium, which was partially offset by a $0.2 million increase in marketing, advertising and promotion expense. The decrease in salaries and employee benefits expense was due mainly to a decrease in medical claims expense in the second quarter of 2021. The decrease in deposit insurance premium was due to the decline in total assets year-over-year. The increase in marketing expenses was due to higher mortgage lead generation costs and sponsorship initiatives.
Income Taxes
The Company reported income tax expense of $2.4 million for the second quarter of 2021 and an effective tax rate of 15.4%, compared to income tax expense of $1.9 million and an effective tax rate of 15.1% for the first quarter of 2021 and an income tax benefit of $0.3 million for the second quarter of 2020.
Loans and Credit Quality
Total loans as of June 30, 2021 were $3.0 billion, a decrease of $101.1 million, or 3.3%, compared to March 31, 2021, and a decrease of $16.1 million, or 0.5%, compared to June 30, 2020. Total commercial loan balances were $2.4 billion as of June 30, 2021, a decrease of $85.1 million, or 3.4%, compared to March 31, 2021, and an increase of $48.3 million, or 2.0%, compared to June 30, 2020. Compared to the linked quarter, the decline in commercial loan balances was driven largely by net payoffs in healthcare finance, single tenant lease financing and public finance loans, which was partially offset by increases in commercial and industrial and investor commercial real estate loan balances.
Total consumer loan balances were $466.5 million as of June 30, 2021, a decrease of $11.9 million, or 2.5%, compared to March 31, 2021, and a decrease of $56.5 million, or 10.8%, compared to June 30, 2020. The decline in consumer loan balances from March 31, 2021 was due primarily to prepayment activity in the residential mortgage portfolio, partially offset by an increase in trailer balances.
Total delinquencies 30 days or more past due were 0.07% of total loans as of June 30, 2021, down from 0.23% as of March 31, 2021, and down from 0.25% as of June 30, 2020. Overall credit quality remained strong as nonperforming loans to total loans was 0.31% as of June 30, 2021, compared to 0.48% as of March 31, 2021, and 0.28% as of June 30, 2020. During the second quarter of 2021, nonperforming loans declined $5.4 million, or 36.8%, compared to the linked quarter due primarily to positive developments related to a single tenant lease financing relationship and a commercial and industrial relationship, both of which had been classified as nonaccrual. The single tenant lease financing relationship included two loans, one of which was paid off at net book value (unpaid principal balance less specific reserves) and the other was transferred to other real estate owned. The commercial and industrial relationship included four loans, two of which paid off during the quarter.
The allowance for loan losses as a percentage of total loans was 0.95% as of June 30, 2021, or 0.96% when excluding SBA Paycheck Protection Program ('PPP') loans, compared to 1.00% and 1.02%, respectively, as of March 31, 2021, and 0.82% and 0.84%, respectively, as of June 30, 2020. The decline in the allowance for loan losses compared to the linked quarter was due primarily to the elimination of $2.9 million of specific reserves related to the loan relationships discussed above as well as the decrease in total loan balances, which included commercial loan portfolios with higher allowance coverage ratios. These items were partially offset by additional adjustments to the qualitative factors in the Company's allowance model, resulting in a 6 bp increase to the allowance coverage ratio related to the general reserve on the Company's commercial loan portfolio, which totaled 0.99% at quarter end.
Net charge-offs of $2.6 million were recognized during the second quarter of 2021, resulting in net charge-offs to average loans of 0.35%, compared to 0.02% for the first quarter of 2021 and 0.12% for the second quarter of 2020. The increase in net charge-offs is primarily due to the single tenant lease financing relationship discussed above as the loan payoff and the transfer to other real estate owned were recorded at net book value. The provision for loan losses in the second quarter of 2021 was $21,000, compared to $1.3 million for the first quarter of 2021 and $2.5 million for the second quarter of 2020. The decrease in provision for loan losses for the second quarter of 2021 was due primarily to the $101.1 million decrease in loan balances mentioned above.
Capital
As of June 30, 2021, total shareholders' equity was $358.6 million, an increase of $14.1 million, or 4.1%, compared to March 31, 2021, and an increase of $50.9 million, or 16.6%, compared to June 30, 2020. The increase compared to the linked quarter was due primarily to net income earned during the quarter and a decrease in accumulated other comprehensive loss. Book value per common share increased to $36.39 as of June 30, 2021, up from $35.07 as of March 31, 2021, and $31.40 as of June 30, 2020. Tangible book value per share increased to $35.92, up from $34.60 and $30.92, each as of the same reference dates.
The following table presents the Company's and the Bank's regulatory and other capital ratios as of June 30, 2021.
| As of June 30, 2021 | ||
| Company | Bank | |
| Total shareholders' equity to assets | 8.53% | 9.45% |
|
Tangible common equity to tangible assets 1
|
8.43% | 9.35% |
|
Tier 1 leverage ratio 2
|
8.70% | 9.61% |
|
Common equity tier 1 capital ratio 2
|
12.23% | 13.54% |
|
Tier 1 capital ratio 2
|
12.23% | 13.54% |
|
Total risk-based capital ratio 2
|
15.51% | 14.48% |
|
1 This information represents a non-GAAP financial measure. For a discussion of non-GAAP financial measures, see the section below entitled 'Non-GAAP Financial Measures.'
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2 Regulatory capital ratios are preliminary pending filing of the Company's and the Bank's regulatory reports.
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Conference Call and Webcast
The Company will host a conference call and webcast at 12:00 p.m. Eastern Time on Thursday, July 22, 2021, to discuss its quarterly financial results. The call can be accessed via telephone at (888) 348-3664. A recorded replay can be accessed through August 22, 2021, by dialing (877) 344-7529; passcode: 10158195.
Additionally, interested parties can listen to a live webcast of the call on the Company's website at www.firstinternetbancorp.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.
About First Internet Bancorp
First Internet Bancorp is a bank holding company with assets of $4.2 billion as of June 30, 2021. The Company's subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. The Bank provides consumer and small business deposit, consumer loan, residential mortgage, and specialty finance services nationally as well as commercial real estate loans, commercial and industrial loans, SBA financing and treasury management services in select geographies. First Internet Bancorp's common stock trades on the Nasdaq Global Select Market under the symbol 'INBK' and is a component of the Russell 2000® Index. Additional information about the Company is available at
www.firstinternetbancorp.com and additional information about the Bank, including its products and services, is available at www.firstib.com.
Forward-Looking Statements
This press release may contain forward-looking statements with respect to the financial condition, results of operations, trends in lending policies, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by the use of words such as 'anticipate,' 'believe,' 'continue,' 'could,' 'designed,' 'estimate,' 'expect,' 'intend,' 'may,' 'optimistic,' 'pending,' 'plan,' 'position,' 'preliminary,' 'remain,' 'should,' 'will,' 'would' or other similar expressions. Such statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and are subject to certain risks and uncertainties including: the effects of the COVID-19 global pandemic and other adverse public health developments on the economy, our business and operations and the business and operations of our vendors and customers: general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products; our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we own or that is the collateral for our loans; failures or breaches of or interruptions in the communications and information systems on which we rely to conduct our business; failure of our plans to grow our commercial real estate, commercial and industrial, public finance, SBA and healthcare finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; fluctuations in interest rates; general economic conditions; risks relating to the regulation of financial institutions; and other factors identified in reports we file with the U.S. Securities and Exchange Commission. All statements in this press release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ('GAAP'). Non-GAAP financial measures, specifically tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, average tangible common equity, return on average tangible common equity, total interest income - FTE, net interest income - FTE, net interest margin - FTE, allowance for loan losses to loans, excluding PPP loans, adjusted revenue, adjusted income before income taxes, adjusted income tax provision, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders' equity, adjusted return on average tangible common equity and adjusted effective income tax rate are used by the Company's management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption 'Reconciliation of Non-GAAP Financial Measures.'
| Contact Information: | |
| Investors/Analysts | Media |
| Paula Deemer | Nicole Lorch |
| Director of Corporate Administration | President & Chief Operating Officer |
| (317) 428-4628 | (317) 532-7906 |
| [email protected] | [email protected] |
| First Internet Bancorp | ||||||||||
| Summary Financial Information (unaudited) | ||||||||||
| Dollar amounts in thousands, except per share data | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
|
June 30, 2021 |
March 31, 2021 |
June 30, 2020 |
June 30, 2021 |
June 30, 2020 |
||||||
| Net income | $ | 13,096 | $ | 10,450 | $ | 3,932 | $ | 23,546 | $ | 9,951 |
| Per share and share information | ||||||||||
| Earnings per share - basic | $ | 1.32 | $ | 1.06 | $ | 0.40 | $ | 2.37 | $ | 1.02 |
| Earnings per share - diluted | 1.31 | 1.05 | 0.40 | 2.36 | 1.02 | |||||
| Dividends declared per share | 0.06 | 0.06 | 0.06 | 0.12 | 0.12 | |||||
| Book value per common share | 36.39 | 35.07 | 31.40 | 36.39 | 31.40 | |||||
|
Tangible book value per common share 1
|
35.92 | 34.60 | 30.92 | 35.92 | 30.92 | |||||
| Common shares outstanding | 9,854,153 | 9,823,831 | 9,799,047 | 9,854,153 | 9,799,047 | |||||
| Average common shares outstanding: | ||||||||||
| Basic | 9,932,761 | 9,899,230 | 9,768,227 | 9,916,087 | 9,798,528 | |||||
| Diluted | 9,981,422 | 9,963,036 | 9,768,227 | 9,970,147 | 9,802,427 | |||||
| Performance ratios | ||||||||||
| Return on average assets | 1.25 | % | 1.02 | % | 0.37 | % | 1.13 | % | 0.47 | % |
| Return on average shareholders' equity | 14.88 | % | 12.61 | % | 5.15 | % | 13.78 | % | 6.48 | % |
|
Return on average tangible common equity 1
|
15.09 | % | 12.79 | % | 5.23 | % | 13.97 | % | 6.58 | % |
| Net interest margin | 2.11 | % | 2.04 | % | 1.37 | % | 2.08 | % | 1.43 | % |
|
Net interest margin - FTE 1,2
|
2.25 | % | 2.18 | % | 1.50 | % | 2.21 | % | 1.58 | % |
|
Capital ratios 3
|
||||||||||
| Total shareholders' equity to assets | 8.53 | % | 8.23 | % | 7.12 | % | 8.53 | % | 7.12 | % |
|
Tangible common equity to tangible assets 1
|
8.43 | % | 8.12 | % | 7.01 | % | 8.43 | % | 7.01 | % |
| Tier 1 leverage ratio | 8.70 | % | 8.46 | % | 7.49 | % | 8.70 | % | 7.49 | % |
| Common equity tier 1 capital ratio | 12.23 | % | 11.81 | % | 10.94 | % | 12.23 | % | 10.94 | % |
| Tier 1 capital ratio | 12.23 | % | 11.81 | % | 10.94 | % | 12.23 | % | 10.94 | % |
| Total risk-based capital ratio | 15.51 | % | 15.18 | % | 14.13 | % | 15.51 | % | 14.13 | % |
| Asset quality | ||||||||||
| Nonperforming loans | $ | 9,264 | $ | 14,649 | $ | 8,195 | $ | 9,264 | $ | 8,195 |
| Nonperforming assets | 10,564 | 14,678 | 10,304 | 10,564 | 10,304 | |||||
| Nonperforming loans to loans | 0.31 | % | 0.48 | % | 0.28 | % | 0.31 | % | 0.28 | % |
| Nonperforming assets to total assets | 0.25 | % | 0.35 | % | 0.24 | % | 0.25 | % | 0.24 | % |
| Allowance for loan losses to: | ||||||||||
| Loans | 0.95 | % | 1.00 | % | 0.82 | % | 0.95 | % | 0.82 | % |
|
Loans, excluding PPP loans 1
|
0.96 | % | 1.02 | % | 0.84 | % | 0.96 | % | 0.84 | % |
| Nonperforming loans | 303.0 | % | 209.2 | % | 298.5 | % | 303.0 | % | 298.5 | % |
| Net charge-offs to average loans | 0.35 | % | 0.02 | % | 0.12 | % | 0.18 | % | 0.09 | % |
| Average balance sheet information | ||||||||||
| Loans | $ | 2,994,356 | $ | 3,047,915 | $ | 2,943,165 | $ | 3,020,987 | $ | 2,937,136 |
| Total securities | 574,684 | 548,429 | 657,622 | 561,630 | 644,251 | |||||
| Other earning assets | 509,735 | 446,045 | 594,296 | 478,065 | 505,111 | |||||
| Total interest-earning assets | 4,100,749 | 4,073,604 | 4,241,690 | 4,087,255 | 4,133,245 | |||||
| Total assets | 4,206,966 | 4,173,273 | 4,330,174 | 4,190,212 | 4,215,053 | |||||
| Noninterest-bearing deposits | 98,207 | 90,764 | 73,758 | 94,506 | 67,107 | |||||
| Interest-bearing deposits | 3,109,165 | 3,115,987 | 3,270,720 | 3,112,557 | 3,179,882 | |||||
| Total deposits | 3,207,372 | 3,206,751 | 3,344,478 | 3,207,063 | 3,246,989 | |||||
| Shareholders' equity | 352,894 | 335,968 | 306,868 | 344,478 | 308,937 |
1 Refer to 'Non-GAAP Financial Measures' section above and 'Reconciliation of Non-GAAP Financial Measures' below
2 On a fully-taxable equivalent ('FTE') basis assuming a 21% tax rate
3 Regulatory capital ratios are preliminary pending filing of the Company's regulatory reports
| First Internet Bancorp | ||||||
| Condensed Consolidated Balance Sheets (unaudited) | ||||||
| Dollar amounts in thousands | ||||||
|
June 30, 2021 |
March 31, 2021 |
June 30, 2020 |
||||
| Assets | ||||||
| Cash and due from banks | $ | 4,347 | $ | 4,440 | $ | 7,016 |
| Interest-bearing deposits | 324,450 | 411,765 | 491,603 | |||
| Securities available-for-sale, at fair value | 663,519 | 462,376 | 589,017 | |||
| Securities held-to-maturity, at amortized cost | 65,659 | 68,190 | 68,295 | |||
| Loans held-for-sale | 27,587 | 30,235 | 38,813 | |||
| Loans | 2,957,608 | 3,058,694 | 2,973,674 | |||
| Allowance for loan losses | (28,066) | (30,642) | (24,465) | |||
| Net loans | 2,929,542 | 3,028,052 | 2,949,209 | |||
| Accrued interest receivable | 16,345 | 16,433 | 21,093 | |||
| Federal Home Loan Bank of Indianapolis stock | 25,650 | 25,650 | 25,650 | |||
| Cash surrender value of bank-owned life insurance | 38,421 | 38,185 | 37,474 | |||
| Premises and equipment, net | 44,249 | 42,381 | 23,939 | |||
| Goodwill | 4,687 | 4,687 | 4,687 | |||
| Servicing asset | 4,120 | 3,817 | 2,522 | |||
| Other real estate owned | 1,300 | - | 2,065 | |||
| Accrued income and other assets | 54,766 | 52,359 | 63,217 | |||
| Total assets | $ | 4,204,642 | $ | 4,188,570 | $ | 4,324,600 |
| Liabilities | ||||||
| Noninterest-bearing deposits | $ | 113,996 | $ | 100,700 | $ | 82,864 |
| Interest-bearing deposits | 3,092,151 | 3,116,903 | 3,297,925 | |||
| Total deposits | 3,206,147 | 3,217,603 | 3,380,789 | |||
| Advances from Federal Home Loan Bank | 514,919 | 514,917 | 514,913 | |||
| Subordinated debt | 69,871 | 69,794 | 69,681 | |||
| Accrued interest payable | 1,132 | 1,418 | 1,073 | |||
| Accrued expenses and other liabilities | 53,932 | 40,272 | 50,433 | |||
| Total liabilities | 3,846,001 | 3,844,004 | 4,016,889 | |||
| Shareholders' equity | ||||||
| Voting common stock | 222,486 | 221,911 | 220,418 | |||
| Retained earnings | 149,066 | 136,575 | 108,431 | |||
| Accumulated other comprehensive loss | (12,911) | (13,920) | (21,138) | |||
| Total shareholders' equity | 358,641 | 344,566 | 307,711 | |||
| Total liabilities and shareholders' equity | $ | 4,204,642 | $ | 4,188,570 | $ | 4,324,600 |
| First Internet Bancorp | ||||||||||
| Condensed Consolidated Statements of Income (unaudited) | ||||||||||
| Dollar amounts in thousands, except per share data | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
|
June 30, 2021 |
March 31, 2021 |
June 30, 2020 |
June 30, 2021 |
June 30, 2020 |
||||||
| Interest income | ||||||||||
| Loans | $ | 30,835 | $ | 30,885 | $ | 29,730 | $ | 61,720 | $ | 60,138 |
| Securities - taxable | 1,921 | 1,779 | 3,276 | 3,700 | 6,895 | |||||
| Securities - non-taxable | 259 | 281 | 457 | 540 | 1,029 | |||||
| Other earning assets | 362 | 335 | 759 | 697 | 2,404 | |||||
| Total interest income | 33,377 | 33,280 | 34,222 | 66,657 | 70,466 | |||||
| Interest expense | ||||||||||
| Deposits | 7,705 | 8,628 | 15,763 | 16,333 | 32,971 | |||||
| Other borrowed funds | 4,065 | 4,127 | 4,033 | 8,192 | 8,051 | |||||
| Total interest expense | 11,770 | 12,755 | 19,796 | 24,525 | 41,022 | |||||
| Net interest income | 21,607 | 20,525 | 14,426 | 42,132 | 29,444 | |||||
| Provision for loan losses | 21 | 1,276 | 2,491 | 1,297 | 3,952 | |||||
|
Net interest income after provision for loan losses |
21,586 | 19,249 | 11,935 | 40,835 | 25,492 | |||||
| Noninterest income | ||||||||||
| Service charges and fees | 280 | 266 | 182 | 546 | 394 | |||||
| Loan servicing revenue | 457 | 422 | 255 | 879 | 506 | |||||
| Loan servicing asset revaluation | (240) | (155) | (90) | (395) | (269) | |||||
| Mortgage banking activities | 2,674 | 5,750 | 3,408 | 8,424 | 7,076 | |||||
| Gain on sale of loans | 3,019 | 1,723 | 762 | 4,742 | 2,563 | |||||
| Gain on sale of securities | - | - | - | - | 41 | |||||
| Gain on sale of premises and equipment | 2,523 | - | - | 2,523 | - | |||||
| Other | 249 | 369 | 456 | 618 | 873 | |||||
| Total noninterest income | 8,962 | 8,375 | 4,973 | 17,337 | 11,184 | |||||
| Noninterest expense | ||||||||||
| Salaries and employee benefits | 9,232 | 9,492 | 7,789 | 18,724 | 15,563 | |||||
| Marketing, advertising and promotion | 872 | 680 | 411 | 1,552 | 786 | |||||
| Consulting and professional fees | 1,078 | 986 | 932 | 2,064 | 2,109 | |||||
| Data processing | 382 | 462 | 339 | 844 | 714 | |||||
| Loan expenses | 541 | 534 | 399 | 1,075 | 998 | |||||
| Premises and equipment | 1,587 | 1,601 | 1,602 | 3,188 | 3,227 | |||||
| Deposit insurance premium | 275 | 425 | 435 | 700 | 920 | |||||
| Other | 1,108 | 1,137 | 1,337 | 2,245 | 2,413 | |||||
| Total noninterest expense | 15,075 | 15,317 | 13,244 | 30,392 | 26,730 | |||||
| Income before income taxes | 15,473 | 12,307 | 3,664 | 27,780 | 9,946 | |||||
| Income tax provision (benefit) | 2,377 | 1,857 | (268) | 4,234 | (5) | |||||
| Net income | $ | 13,096 | $ | 10,450 | $ | 3,932 | $ | 23,546 | $ | 9,951 |
| Per common share data | ||||||||||
| Earnings per share - basic | $ | 1.32 | $ | 1.06 | $ | 0.40 | $ | 2.37 | $ | 1.02 |
| Earnings per share - diluted | $ | 1.31 | $ | 1.05 | $ | 0.40 | $ | 2.36 | $ | 1.02 |
| Dividends declared per share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.12 | $ | 0.12 |
All periods presented have been reclassified to conform to the current period classification
| First Internet Bancorp | ||||||||||||||||||
| Average Balances and Rates (unaudited) | ||||||||||||||||||
| Dollar amounts in thousands | ||||||||||||||||||
| Three Months Ended | ||||||||||||||||||
| June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||||||||
| Average Balance | Interest / Dividends | Yield / Cost | Average Balance | Interest / Dividends | Yield / Cost | Average Balance | Interest / Dividends | Yield / Cost | ||||||||||
| Assets | ||||||||||||||||||
| Interest-earning assets | ||||||||||||||||||
|
Loans, including loans held-for-sale 1
|
$ | 3,016,330 | $ | 30,835 | 4.10 | % | $ | 3,079,130 | $ | 30,885 | 4.07 | % | $ | 2,989,772 | $ | 29,730 | 4.00 | % |
| Securities - taxable | 490,634 | 1,921 | 1.57 | % | 461,300 | 1,779 | 1.56 | % | 560,947 | 3,276 | 2.35 | % | ||||||
| Securities - non-taxable | 84,050 | 259 | 1.24 | % | 87,129 | 281 | 1.31 | % | 96,675 | 457 | 1.90 | % | ||||||
| Other earning assets | 509,735 | 362 | 0.28 | % | 446,045 | 335 | 0.30 | % | 594,296 | 759 | 0.51 | % | ||||||
| Total interest-earning assets | 4,100,749 | 33,377 | 3.26 | % | 4,073,604 | 33,280 | 3.31 | % | 4,241,690 | 34,222 | 3.24 | % | ||||||
| Allowance for loan losses | (30,348) | (29,884) | (23,388) | |||||||||||||||
| Noninterest-earning assets | 136,565 | 129,553 | 111,872 | |||||||||||||||
| Total assets | $ | 4,206,966 | $ | 4,173,273 | $ | 4,330,174 | ||||||||||||
| Liabilities | ||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||
| Interest-bearing demand deposits | $ | 192,777 | $ | 143 | 0.30 | % | $ | 180,746 | $ | 133 | 0.30 | % | $ | 137,487 | $ | 237 | 0.69 | % |
| Savings accounts | 55,811 | 49 | 0.35 | % | 46,035 | 40 | 0.35 | % | 37,204 | 92 | 0.99 | % | ||||||
| Money market accounts | 1,416,406 | 1,462 | 0.41 | % | 1,369,626 | 1,391 | 0.41 | % | 1,089,063 | 3,541 | 1.31 | % | ||||||
| Certificates and brokered deposits | 1,444,171 | 6,051 | 1.68 | % | 1,519,580 | 7,064 | 1.89 | % | 2,006,966 | 11,893 | 2.38 | % | ||||||
| Total interest-bearing deposits | 3,109,165 | 7,705 | 0.99 | % | 3,115,987 | 8,628 | 1.12 | % | 3,270,720 | 15,763 | 1.94 | % | ||||||
| Other borrowed funds | 584,751 | 4,065 | 2.79 | % | 583,780 | 4,127 | 2.87 | % | 584,543 | 4,033 | 2.77 | % | ||||||
| Total interest-bearing liabilities | 3,693,916 | 11,770 | 1.28 | % | 3,699,767 | 12,755 | 1.40 | % | 3,855,263 | 19,796 | 2.07 | % | ||||||
| Noninterest-bearing deposits | 98,207 | 90,764 | 73,758 | |||||||||||||||
| Other noninterest-bearing liabilities | 61,949 | 46,774 | 94,285 | |||||||||||||||
| Total liabilities | 3,854,072 | 3,837,305 | 4,023,306 | |||||||||||||||
| Shareholders' equity | 352,894 | 335,968 | 306,868 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,206,966 | $ | 4,173,273 | $ | 4,330,174 | ||||||||||||
| Net interest income | $ | 21,607 | $ | 20,525 | $ | 14,426 | ||||||||||||
| Interest rate spread | 1.98 | % | 1.91 | % | 1.17 | % | ||||||||||||
| Net interest margin | 2.11 | % | 2.04 | % | 1.37 | % | ||||||||||||
|
Net interest margin - FTE 2,3
|
2.25 | % | 2.18 | % | 1.50 | % |
1 Includes nonaccrual loans
2 On a fully-taxable equivalent ('FTE') basis assuming a 21% tax rate
3 Refer to 'Non-GAAP Financial Measures' section above and 'Reconciliation of Non-GAAP Financial Measures' below
| First Internet Bancorp | ||||||||||||
| Average Balances and Rates (unaudited) | ||||||||||||
| Dollar amounts in thousands | ||||||||||||
| Six Months Ended | ||||||||||||
| June 30, 2021 | June 30, 2020 | |||||||||||
| Average Balance | Interest / Dividends | Yield / Cost | Average Balance | Interest / Dividends | Yield / Cost | |||||||
| Assets | ||||||||||||
| Interest-earning assets | ||||||||||||
| Loans, including loans held-for-sale | $ | 3,047,560 | $ | 61,720 | 4.08 | % | $ | 2,983,883 | $ | 60,138 | 4.05 | % |
| Securities - taxable | 476,049 | 3,700 | 1.57 | % | 545,997 | 6,895 | 2.54 | % | ||||
| Securities - non-taxable | 85,581 | 540 | 1.27 | % | 98,254 | 1,029 | 2.11 | % | ||||
| Other earning assets | 478,065 | 697 | 0.29 | % | 505,111 | 2,404 | 0.96 | % | ||||
| Total interest-earning assets | 4,087,255 | 66,657 | 3.29 | % | 4,133,245 | 70,466 | 3.43 | % | ||||
| Allowance for loan losses | (30,117) | (22,724) | ||||||||||
| Noninterest-earning assets | 133,074 | 104,532 | ||||||||||
| Total assets | $ | 4,190,212 | $ | 4,215,053 | ||||||||
| Liabilities | ||||||||||||
| Interest-bearing liabilities | ||||||||||||
| Interest-bearing demand deposits | $ | 186,795 | $ | 276 | 0.30 | % | $ | 130,206 | $ | 456 | 0.70 | % |
| Savings accounts | 50,950 | 89 | 0.35 | % | 33,774 | 170 | 1.01 | % | ||||
| Money market accounts | 1,393,145 | 2,853 | 0.41 | % | 977,834 | 7,284 | 1.50 | % | ||||
| Certificates and brokered deposits | 1,481,667 | 13,115 | 1.78 | % | 2,038,068 | 25,061 | 2.47 | % | ||||
| Total interest-bearing deposits | 3,112,557 | 16,333 | 1.06 | % | 3,179,882 | 32,971 | 2.09 | % | ||||
| Other borrowed funds | 584,268 | 8,192 | 2.83 | % | 584,504 | 8,051 | 2.77 | % | ||||
| Total interest-bearing liabilities | 3,696,825 | 24,525 | 1.34 | % | 3,764,386 | 41,022 | 2.19 | % | ||||
| Noninterest-bearing deposits | 94,506 | 67,107 | ||||||||||
| Other noninterest-bearing liabilities | 54,403 | 74,623 | ||||||||||
| Total liabilities | 3,845,734 | 3,906,116 | ||||||||||
| Shareholders' equity | 344,478 | 308,937 | ||||||||||
| Total liabilities and shareholders' equity | $ | 4,190,212 | $ | 4,215,053 | ||||||||
| Net interest income | $ | 42,132 | $ | 29,444 | ||||||||
| Interest rate spread | 1.95 | % | 1.24 | % | ||||||||
| Net interest margin | 2.08 | % | 1.43 | % | ||||||||
|
Net interest margin - FTE 1
|
2.21 | % | 1.58 | % |
1 Includes nonaccrual loans
2 On a fully-taxable equivalent ('FTE') basis assuming a 21% tax rate
3 Refer to 'Non-GAAP Financial Measures' section above and 'Reconciliation of Non-GAAP Financial Measures' below
| First Internet Bancorp | ||||||||||||
| Loans and Deposits (unaudited) | ||||||||||||
| Dollar amounts in thousands | ||||||||||||
| June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||
| Commercial loans | ||||||||||||
| Commercial and industrial | $ | 96,203 | 3.3 | % | $ | 71,835 | 2.3 | % | $ | 81,687 | 2.7 | % |
| Owner-occupied commercial real estate | 87,136 | 2.9 | % | 87,930 | 2.9 | % | 86,897 | 2.9 | % | |||
| Investor commercial real estate | 28,871 | 1.0 | % | 14,832 | 0.5 | % | 13,286 | 0.4 | % | |||
| Construction | 117,970 | 4.0 | % | 123,483 | 4.0 | % | 77,591 | 2.6 | % | |||
| Single tenant lease financing | 913,115 | 30.9 | % | 941,322 | 30.8 | % | 980,292 | 33.0 | % | |||
| Public finance | 612,138 | 20.7 | % | 637,600 | 20.8 | % | 647,107 | 21.8 | % | |||
| Healthcare finance | 455,890 | 15.3 | % | 510,237 | 16.8 | % | 380,956 | 12.8 | % | |||
| Small business lending | 123,293 | 4.2 | % | 132,490 | 4.3 | % | 118,526 | 4.0 | % | |||
| Total commercial loans | 2,434,616 | 82.3 | % | 2,519,729 | 82.4 | % | 2,386,342 | 80.2 | % | |||
| Consumer loans | ||||||||||||
| Residential mortgage | 177,148 | 6.0 | % | 190,148 | 6.2 | % | 208,728 | 7.0 | % | |||
| Home equity | 17,510 | 0.6 | % | 17,949 | 0.6 | % | 22,640 | 0.8 | % | |||
| Trailers | 148,795 | 5.0 | % | 143,454 | 4.7 | % | 147,326 | 5.0 | % | |||
| Recreational vehicles | 91,030 | 3.1 | % | 92,221 | 3.0 | % | 102,088 | 3.4 | % | |||
| Other consumer loans | 31,971 | 1.1 | % | 34,534 | 1.1 | % | 42,218 | 1.4 | % | |||
| Total consumer loans | 466,454 | 15.8 | % | 478,306 | 15.6 | % | 523,000 | 17.6 | % | |||
|
Net deferred loan fees, premiums, discounts and other 1
|
56,538 | 1.9 | % | 60,659 | 2.0 | % | 64,332 | 2.2 | % | |||
| Total loans | $ | 2,957,608 | 100.0 | % | $ | 3,058,694 | 100.0 | % | $ | 2,973,674 | 100.0 | % |
| June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||
| Deposits | ||||||||||||
| Noninterest-bearing deposits | $ | 113,996 | 3.6 | % | $ | 100,700 | 3.1 | % | $ | 82,864 | 2.5 | % |
| Interest-bearing demand deposits | 196,841 | 6.1 | % | 186,015 | 5.8 | % | 152,391 | 4.5 | % | |||
| Savings accounts | 56,298 | 1.8 | % | 51,251 | 1.6 | % | 43,366 | 1.3 | % | |||
| Money market accounts | 1,432,355 | 44.6 | % | 1,397,449 | 43.4 | % | 1,241,874 | 36.7 | % | |||
| Certificates of deposits | 1,087,350 | 33.9 | % | 1,174,764 | 36.5 | % | 1,470,905 | 43.5 | % | |||
| Brokered deposits | 319,307 | 10.0 | % | 307,424 | 9.6 | % | 389,389 | 11.5 | % | |||
| Total deposits | $ | 3,206,147 | 100.0 | % | $ | 3,217,603 | 100.0 | % | $ | 3,380,789 | 100.0 | % |
1 Includes carrying value adjustments of $40.4 million, $41.6 million and $46.0 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2021, March 31, 2021 and June 30, 2020 respectively.
| First Internet Bancorp | ||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||
| Dollar amounts in thousands, except per share data | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
|
June 30, 2021 |
March 31, 2021 |
June 30, 2020 |
June 30, 2021 |
June 30, 2020 |
||||||
| Total equity - GAAP | $ | 358,641 | $ | 344,566 | $ | 307,711 | $ | 358,641 | $ | 307,711 |
| Adjustments: | ||||||||||
| Goodwill | (4,687) | (4,687) | (4,687) | (4,687) | (4,687) | |||||
| Tangible common equity | $ | 353,954 | $ | 339,879 | $ | 303,024 | $ | 353,954 | $ | 303,024 |
| Total assets - GAAP | $ | 4,204,642 | $ | 4,188,570 | $ | 4,324,600 | $ | 4,204,642 | $ | 4,324,600 |
| Adjustments: | ||||||||||
| Goodwill | (4,687) | (4,687) | (4,687) | (4,687) | (4,687) | |||||
| Tangible assets | $ | 4,199,955 | $ | 4,183,883 | $ | 4,319,913 | $ | 4,199,955 | $ | 4,319,913 |
| Common shares outstanding | 9,854,153 | 9,823,831 | 9,799,047 | 9,854,153 | 9,799,047 | |||||
| Book value per common share | $ | 36.39 | $ | 35.07 | $ | 31.40 | $ | 36.39 | $ | 31.40 |
| Effect of goodwill | (0.47) | (0.47) | (0.48) | (0.47) | (0.48) | |||||
| Tangible book value per common share | $ | 35.92 | $ | 34.60 | $ | 30.92 | $ | 35.92 | $ | 30.92 |
| Total shareholders' equity to assets | 8.53 | % | 8.23 | % | 7.12 | % | 8.53 | % | 7.12 | % |
| Effect of goodwill | (0.10 | %) | (0.11 | %) | (0.11 | %) | (0.10 | %) | (0.11 | %) |
| Tangible common equity to tangible assets | 8.43 | % | 8.12 | % | 7.01 | % | 8.43 | % | 7.01 | % |
| Total average equity - GAAP | $ | 352,894 | $ | 335,968 | $ | 306,868 | $ | 344,478 | $ | 308,937 |
| Adjustments: | ||||||||||
| Average goodwill | (4,687) | (4,687) | (4,687) | (4,687) | (4,687) | |||||
| Average tangible common equity | $ | 348,207 | $ | 331,281 | $ | 302,181 | $ | 339,791 | $ | 304,250 |
| Return on average shareholders' equity | 14.88 | % | 12.61 | % | 5.15 | % | 13.78 | % | 6.48 | % |
| Effect of goodwill | 0.21 | % | 0.18 | % | 0.08 | % | 0.19 | % | 0.10 | % |
| Return on average tangible common equity | 15.09 | % | 12.79 | % | 5.23 | % | 13.97 | % | 6.58 | % |
| Total interest income | $ | 33,377 | $ | 33,280 | $ | 34,222 | $ | 66,657 | $ | 70,466 |
| Adjustments: | ||||||||||
|
Fully-taxable equivalent adjustments 1
|
1,394 | 1,356 | 1,437 | 2,750 | 2,972 | |||||
| Total interest income - FTE | $ | 34,771 | $ | 34,636 | $ | 35,659 | $ | 69,407 | $ | 73,438 |
| Net interest income | $ | 21,607 | $ | 20,525 | $ | 14,426 | $ | 42,132 | $ | 29,444 |
| Adjustments: | ||||||||||
|
Fully-taxable equivalent adjustments 1
|
1,394 | 1,356 | 1,437 | 2,750 | 2,972 | |||||
| Net interest income - FTE | $ | 23,001 | $ | 21,881 | $ | 15,863 | $ | 44,882 | $ | 32,416 |
| Net interest margin | 2.11 | % | 2.04 | % | 1.37 | % | 2.08 | % | 1.43 | % |
|
Effect of fully-taxable equivalent adjustments 1
|
0.14 | % | 0.14 | % | 0.13 | % | 0.13 | % | 0.15 | % |
| Net interest margin - FTE | 2.25 | % | 2.18 | % | 1.50 | % | 2.21 | % | 1.58 | % |
| Allowance for loan losses | $ | 28,066 | $ | 30,642 | $ | 24,465 | $ | 28,066 | $ | 24,465 |
| Loans | $ | 2,957,608 | $ | 3,058,694 | $ | 2,973,674 | $ | 2,957,608 | $ | 2,973,674 |
| Adjustments: | ||||||||||
| PPP loans | (39,682) | (53,365) | (58,948) | (39,682) | (58,948) | |||||
| Loans, excluding PPP loans | $ | 2,917,926 | $ | 3,005,329 | $ | 2,914,726 | $ | 2,917,926 | $ | 2,914,726 |
| Allowance for loan losses to loans | 0.95 | % | 1.00 | % | 0.82 | % | 0.95 | % | 0.82 | % |
| Effect of PPP loans | 0.01 | % | 0.02 | % | 0.02 | % | 0.01 | % | 0.02 | % |
| Allowance for loan losses to loans, excluding PPP loans | 0.96 | % | 1.02 | % | 0.84 | % | 0.96 | % | 0.84 | % |
1Assuming a 21% tax rate
| First Internet Bancorp | ||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||
| Dollar amounts in thousands, except per share data | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
|
June 30, 2021 |
March 31, 2021 |
June 30, 2020 |
June 30, 2021 |
June 30, 2020 |
||||||
| Total revenue - GAAP | $ | 30,569 | $ | 28,900 | $ | 19,399 | $ | 59,469 | $ | 40,628 |
| Adjustments: | ||||||||||
| Gain on sale of premises and equipment | (2,523) | - | - | (2,523) | - | |||||
| Adjusted revenue | $ | 28,046 | $ | 28,900 | $ | 19,399 | $ | 56,946 | $ | 40,628 |
| Income before income taxes - GAAP | $ | 15,473 | $ | 12,307 | $ | 3,664 | $ | 27,780 | $ | 9,946 |
| Adjustments: | ||||||||||
| Gain on sale of premises and equipment | (2,523) | - | - | (2,523) | - | |||||
| Adjusted income before income taxes | $ | 12,950 | $ | 12,307 | $ | 3,664 | $ | 25,257 | $ | 9,946 |
| Income tax provision - GAAP | $ | 2,377 | $ | 1,857 | $ | (268) | $ | 4,234 | $ | (5) |
| Adjustments: | ||||||||||
| Gain on sale of premises and equipment | (530) | - | - | (530) | - | |||||
| Adjusted income tax provision | $ | 1,847 | $ | 1,857 | $ | (268) | $ | 3,704 | $ | (5) |
| Net income - GAAP | $ | 13,096 | $ | 10,450 | $ | 3,932 | $ | 23,546 | $ | 9,951 |
| Adjustments: | ||||||||||
| Gain on sale of premises and equipment | (1,993) | - | - | (1,993) | - | |||||
| Adjusted net income | $ | 11,103 | $ | 10,450 | $ | 3,932 | $ | 21,553 | $ | 9,951 |
| Diluted average common shares outstanding | 9,981,422 | 9,963,036 | 9,768,227 | 9,970,147 | 9,802,427 | |||||
| Diluted earnings per share - GAAP | $ | 1.31 | $ | 1.05 | $ | 0.40 | $ | 2.36 | $ | 1.02 |
| Adjustments: | ||||||||||
| Effect of gain on sale of premises and equipment | (0.20) | - | - | (0.20) | - | |||||
| Adjusted diluted earnings per share | $ | 1.11 | $ | 1.05 | $ | 0.40 | $ | 2.16 | $ | 1.02 |
| Return on average assets | 1.25 | % | 1.02 | % | 0.37 | % | 1.13 | % | 0.47 | % |
| Effect of gain on sale of premises and equipment | (0.19 | %) | 0.00 | % | 0.00 | % | (0.09 | %) | 0.00 | % |
| Adjusted return on average assets | 1.06 | % | 1.02 | % | 0.37 | % | 1.04 | % | 0.47 | % |
| Return on average shareholders' equity | 14.88 | % | 12.61 | % | 5.15 | % | 13.78 | % | 6.48 | % |
| Effect of gain on sale of premises and equipment | (2.26 | %) | 0.00 | % | 0.00 | % | (1.16 | %) | 0.00 | % |
| Adjusted return on average shareholders' equity | 12.62 | % | 12.61 | % | 5.15 | % | 12.62 | % | 6.48 | % |
| Return on average tangible common equity | 15.09 | % | 12.79 | % | 5.23 | % | 13.97 | % | 6.58 | % |
| Effect of gain on sale of premises and equipment | (2.30 | %) | 0.00 | % | 0.00 | % | (1.18 | %) | 0.00 | % |
| Adjusted return on average tangible common equity | 12.79 | % | 12.79 | % | 5.23 | % | 12.79 | % | 6.58 | % |
| Effective income tax rate | 15.4 | % | 15.1 | % | (7.3 | %) | 15.2 | % | (0.1 | %) |
| Effect of gain on sale of premises and equipment | (1.1 | %) | 0.0 | % | 0.0 | % | (0.5 | %) | 0.0 | % |
| Adjusted effective income tax rate | 14.3 | % | 15.1 | % | (7.3 | %) | 14.7 | % | (0.1 | %) |