First Internet Bancorp Reports Fourth Quarter and Full Year 2024 Results

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01/22/2025 - 05:01 PM

FISHERS, Ind.--(BUSINESS WIRE)-- 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, 2024.

Fourth Quarter 2024 Financial Highlights

Net income of $7.3 million, an increase of 4.9% from the third quarter of 2024
Diluted earnings per share of $0.83, an increase of 3.8% from the third quarter of 2024
Net interest income of $23.6 million and fully taxable equivalent net interest income of $24.7 million¹, increases of 8.2% and 7.9%, respectively, from the third quarter of 2024
Net interest margin of 1.67% and fully taxable equivalent net interest margin of 1.75%¹, both increasing 5 basis points (“bps”) from the third quarter of 2024
Loan growth of $134.8 million, a 3.3% increase from the third quarter of 2024; deposit growth of $135.5 million, a 2.8% increase from the third quarter of 2024; loans to deposits ratio of 84.5%
- Closed $63.1 million in SBA loans in December; guaranteed portion to be sold to the secondary market in the first quarter of 2025
Nonperforming loans to total loans of 0.68%; net charge-offs to average loans of 0.91%; allowance for credit losses to total loans of 1.07%
Tangible common equity to tangible assets of 6.62%¹, and 7.40% ex-AOCI and adjusted for normalized cash balances¹; CET1 ratio of 9.30%; tangible book value per share of $43.77¹

Full Year 2024 Financial Highlights

Net income of $25.3 million, an increase of 200.3% from 2023
Diluted earnings per share of $2.88, an increase of 203.2% from 2023
Net interest income of $87.4 million and fully taxable equivalent net interest income of $92.0 million¹, increases of 16.7% and 14.8%, respectively, from 2023
Net interest margin of 1.65% and fully taxable equivalent net interest margin of 1.74%¹, increases of 9 bps and 7 bps, respectively, from 2023
Loan growth of $330.4 million, an 8.6% increase from 2023 and deposit growth of $866.2 million, a 21.3% increase from 2023
Annual tangible book value per share growth of 5.7%¹

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."

“Our performance throughout 2024 reflects a year of remarkable growth and significantly improved performance,” said David Becker, Chairman and Chief Executive Officer. “Full year net income and earnings per share increased substantially from 2023, driven by growth in net interest income and greater gain on sale revenue from our small business lending business. Strong commercial loan growth, particularly in construction, investor commercial real estate and small business lending, enhanced our interest rate risk profile and drove loan yields higher. As a result, total revenue growth for the year far outpaced expense growth, driving significant operating leverage.

“Several of these key operating trends continued through the fourth quarter, providing a high level of momentum as we enter the new year. Our liquidity and capital positions are solid, and measures of asset quality remain sound. We anticipate continued net interest margin expansion. We are excited about the outlook for 2025 as the combination of our core businesses, a more favorable interest rate environment, and emerging opportunities leave us well-positioned to deliver continued earnings growth and increased profitability.”

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2024 was $23.6 million, compared to $21.8 million for the third quarter of 2024, and $19.8 million for the fourth quarter of 2023. On a fully taxable equivalent basis, net interest income for the fourth quarter of 2024 was $24.7 million, compared to $22.9 million for the third quarter of 2024, and $21.0 million for the fourth quarter of 2023.

Total interest income for the fourth quarter of 2024 was $77.8 million, an increase of 3.7% compared to the third quarter of 2024, and an increase of 17.4% compared to the fourth quarter of 2023. On a fully taxable equivalent basis, total interest income for the fourth quarter of 2024 was $78.9 million, an increase of 3.7% compared to the third quarter of 2024, and an increase of 16.9% compared to the fourth quarter of 2023. The yield on average interest-earning assets for the fourth quarter of 2024 decreased to 5.52% from 5.58% for the third quarter of 2024 due to a 54 basis point (“bp”) decrease in the yield earned on other earning assets and a 3 bp decrease in the yield earned on securities, partially offset by a 3 bp increase in the yield earned on loans. Compared to the linked quarter, average loan balances, including loans held-for-sale, increased $99.8 million, or 2.5%, the average balance of securities increased $49.3 million, or 6.2%, and the average balance of other earning assets increased $110.0 million, or 20.9%.

Interest income earned on commercial loans was higher due primarily to increased average balances within the investor commercial real estate, construction and small business lending portfolios. This was partially offset by lower average balances in the healthcare and franchise finance portfolios. The continued shift in the loan mix reflects the Company’s focus on higher-yielding variable rate and shorter-duration products, in part, to help improve the interest rate risk profile of the balance sheet.

In the consumer loan portfolio, interest income was up due to the combination of higher average balances and continued strong new origination yields in the trailers and RV portfolios, partially offset by lower average balances in the residential mortgage and home equity portfolios.

The yield on funded portfolio loan originations was 7.26% in the fourth quarter of 2024, down from 8.85% in the third quarter of 2024, reflecting 100 bps of Fed rate cuts since late in the third quarter of 2024, as well as the larger volume of originations in fixed-rate portfolios which are priced at lower spreads over US treasuries, but are still significantly higher than historical yields in these portfolios.

Interest income earned on securities during the fourth quarter of 2024 increased $0.4 million, or 5.2%, compared to the third quarter of 2024 due to the increase in average balances, partially offset by a slight decrease in the yield earned on the portfolio. The yield on the securities portfolio decreased 3 bps to 3.98%, driven primarily by variable rate securities repricing lower following the Fed rate cuts and the maturity of an interest rate swap tied to the securities portfolio. Interest earned on other earning asset balances increased $0.6 million, or 8.8%, in the fourth quarter of 2024 compared to the linked quarter, due primarily to higher average cash balances, partially offset by the decrease in yields earned on those balances due to the Fed rate cuts.

Total interest expense for the fourth quarter of 2024 was $54.2 million, an increase of $1.0 million, or 1.9%, compared to the linked quarter, due to a 7.8% increase in average interest-bearing deposit balances throughout the quarter, partially offset by lower costs on those deposits and a decline in the average balance of FHLB advances. Interest expense related to interest-bearing deposits increased $1.7 million, or 3.6%, driven primarily by higher average balances, partially offset by a decline of 17 bps in the cost of funds to 4.13%.

The increase in interest expense was driven primarily by CDs as average balances increased $185.9 million, or 9.7%, compared to the linked quarter, driven by strong consumer demand, partially offset by a 4 bp decrease in the cost of funds. The decrease in the cost of funds for CDs is the second consecutive quarter of declining costs, reflecting the favorable repricing gap between new production and maturities. The weighted-average cost of new CDs during the fourth quarter of 2024 was 4.23%, or 78 bps lower than the cost of maturing CDs. Although medium-to-longer term treasury rates increased during the fourth quarter of 2024, the Company held CD pricing constant through most of the quarter and further lowered CD rates in December following the Fed’s rate cut that month. Additionally, the average balance of fintech – brokered deposits increased $55.5 million, or 36.3%, due to higher payments volume, partially offset by a 34 bp decrease in the cost of funds. Furthermore, the average balance of interest-bearing demand deposits increased $63.1 million, or 12.3%, which was almost completely offset by a decline of 23 bps in the cost of funds. During the fourth quarter of 2024, the Bank submitted a notice of reliance on the primary purpose exemption with the Federal Deposit Insurance Corporation related to fintech deposits that had been classified as brokered, and as of December 31, 2024, reclassified these deposits to interest-bearing demand deposits.

These increases were partially offset by a decline in interest expense related to money market accounts and brokered deposits. While the average balance of money market accounts increased slightly, the cost of funds decreased 26 bps. Similarly, the average balance of brokered deposits increased during the fourth quarter, which was more than offset by a decline of 30 bps in the cost of funds. The decline in the cost of money market accounts and brokered deposits was driven primarily by the Fed rate cuts in the third and fourth quarters of 2024. Additionally, the Company paid down higher- cost brokered CD issuances during the fourth quarter of 2024.

Interest expense also benefitted from a lower average balance of FHLB advances as the Company deployed liquidity to pay down $220.0 million of advances during the fourth quarter of 2024.

Net interest margin (“NIM”) was 1.67% for the fourth quarter of 2024, up from 1.62% for the third quarter of 2024, and up from 1.58% for the fourth quarter of 2023. Fully taxable equivalent NIM (“FTE NIM”) was 1.75% for the fourth quarter of 2024, up from 1.70% for the third quarter of 2024, and up from 1.68% for the fourth quarter of 2023. The increases in NIM and FTE NIM compared to the linked quarter were due to the decline in the cost of interest-bearing liabilities outpacing the decrease in the yield on interest-earning assets following the Fed rate cuts that began in late September of 2024.

Noninterest Income

Noninterest income for the fourth quarter of 2024 was $15.9 million, up from $12.0 million in the third quarter of 2024, and up from $7.4 million in the fourth quarter of 2023. During the fourth quarter of 2024, the Company recognized $4.7 million of prepayment and terminated interest rate swap gains related to the paydown of FHLB advances. Excluding these gains, adjusted noninterest income for the quarter was $11.2 million, down 6.9% from the third quarter of 2024. Gain on sale of loans totaled $8.6 million for the fourth quarter of 2024, down $1.4 million, or 13.7%, from the linked quarter. Gain on sale revenue consisted almost entirely of sales of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans during the fourth quarter of 2024. SBA loan sale volume during the fourth quarter of 2024 was down 18.5% compared to the third quarter of 2024, while net premiums increased 30 bps. The decline in loan sale volume was due mainly to a timing issue as a significant portion of originations during the quarter closed late in December and will not be sold in the secondary market until January of 2025. The decline in gain-on-sale revenue was partially offset by higher net loan servicing revenue, which increased $0.7 million, due primarily to growth in the servicing portfolio and a lower fair value adjustment to the loan servicing asset.

Noninterest Expense

Noninterest expense totaled $24.0 million for the fourth quarter of 2024, compared to $22.8 million for the third quarter of 2024, and $20.1 million for the fourth quarter of 2023, representing increases of 5.1% and 19.5%, respectively. The increase of $1.2 million compared to the linked quarter was due primarily to higher salaries and employee benefits, other noninterest expense and deposit insurance premium. The increase in salaries and employee benefits was driven by staff additions in small business lending, risk management and information technology as the Company continues to invest in key areas. The increase in other noninterest expense was due to seasonal expenses while the increase in deposit insurance premium was due mainly to year-over-year asset growth.

Income Taxes

The Company recorded income tax expense of $1.0 million and an effective tax rate of 12.0% for the fourth quarter of 2024, compared to income tax expense of $0.6 million and an effective tax rate of 8.1% for the third quarter of 2024, and an income tax benefit of $0.6 million for the fourth quarter of 2023. The increase in the effective tax rate for the fourth quarter of 2024 reflects higher pre-tax income compared to prior quarters.

Loans and Credit Quality

Total loans as of December 31, 2024, were $4.2 billion, an increase of $134.8 million, or 3.3%, compared to September 30, 2024, and an increase of $330.4 million, or 8.6%, compared to December 31, 2023. Total commercial loan balances were $3.3 billion as of December 31, 2024, an increase of $139.1 million, or 4.3%, compared to September 30, 2024, and an increase of $336.7 million, or 11.2%, compared to December 31, 2023. During the fourth quarter of 2024, the Company experienced strong growth across most of its commercial lines of business with notable contributions from construction, small business lending, public finance and single tenant lease financing.

Total consumer loan balances were $801.4 million as of December 31, 2024, a decrease of $2.0 million, or 0.2%, compared to September 30, 2024, and an increase of $4.5 million, or 0.6%, compared to December 31, 2023. The decrease compared to the linked quarter was due primarily to lower balances in the residential mortgage and home equity portfolios, partially offset by a higher balance in the trailers portfolio.

Total delinquencies 30 days or more past due, excluding nonperforming loans, were 0.63% of total performing loans as of December 31, 2024, compared to 0.36% at September 30, 2024 and 0.11% as of December 31, 2023. The increase compared to the linked quarter was due primarily to an increase in delinquencies in the small business lending and franchise finance portfolios, some of which was due to the timing of principal and interest payments. Subsequent to quarter end, payments were received from certain borrowers and as of the date of this release, delinquencies 30 days or more past due declined to 0.44% of total performing loans.

Nonperforming loans were 0.68% of total loans as of December 31, 2024, compared to 0.56% as of September 30, 2024, and 0.26% as of December 31, 2023. Nonperforming loans totaled $28.4 million at December 31, 2024, up from $22.5 million at September 30, 2024, and up from $10.0 million at December 31, 2023. The increase in nonperforming loans during the fourth quarter of 2024 was due primarily to franchise finance and small business lending loans that were placed on nonaccrual during the quarter. At quarter end, there were $8.2 million of specific reserves held against the balance of nonperforming loans.

The allowance for credit losses (“ACL”) as a percentage of total loans was 1.07% as of December 31, 2024, compared to 1.13% as of September 30, 2024, and 1.01% as of December 31, 2023. The decrease in the ACL compared to the linked quarter reflects the decline in specific reserves and the elevated net charge-off activity discussed below, partially offset by qualitative adjustments to the small business lending ACL and overall loan growth.

Net charge-offs of $9.4 million were recognized during the fourth quarter of 2024, resulting in net charge-offs to average loans of 0.91%, compared to $1.5 million, or 0.15%, for the third quarter of 2024 and $1.2 million, or 0.12%, for the fourth quarter of 2023. Net charge-offs in the fourth quarter of 2024 were elevated as the Company took action to resolve problem small business lending loans and de-risk the portfolio. Approximately $3.4 million of net charge-offs recognized during the quarter were related to small business lending loans with existing specific reserves.

The provision for credit losses in the fourth quarter of 2024 was $7.2 million, compared to $3.4 million for the third quarter of 2024, and $3.6 million for the fourth quarter of 2023. The provision for the fourth quarter of 2024 was driven primarily by the elevated net charge-offs, qualitative adjustments to the small business lending ACL and overall loan growth, partially offset by the decline in specific reserves and adjustments to qualitative factors on other portfolios.

Capital

As of December 31, 2024, total shareholders’ equity was $384.1 million, a decrease of $1.1 million, or 0.3%, compared to September 30, 2024, and an increase of $21.3 million, or 5.9%, compared to December 31, 2023. The modest decrease in shareholders’ equity during the fourth quarter of 2024 compared to the linked quarter was due primarily to an increase in accumulated other comprehensive loss driven by higher intermediate and long-term interest rates at quarter end, partially offset by the net income earned during the quarter. Book value per common share was $44.31 as of December 31, 2024, down from $44.43 as of September 30, 2024, and up from $41.97 as of December 31, 2023. Tangible book value per share was $43.77, down from $43.89 as of September 30, 2024, and up from $41.43 as of December 31, 2023.

The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of December 31, 2024.

	As of December 31, 2024
	Company	Bank

Total shareholders' equity to assets	6.69%	8.01%
Tangible common equity to tangible assets ¹	6.62%	7.93%
Tier 1 leverage ratio ²	6.91%	8.22%
Common equity tier 1 capital ratio ²	9.30%	11.06%
Tier 1 capital ratio ²	9.30%	11.06%
Total risk-based capital ratio ²	12.61%	12.11%

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 23, 2025 to discuss its quarterly financial results. The call can be accessed via telephone at (800) 549-8228; access code: 28199. A recorded replay can be accessed through January 30, 2025 by dialing (888) 660-6264; access code: 28199 #.

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 $5.7 billion as of December 31, 2024. 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,” :improve,” “may,” “ongoing,” “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 and SBA 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, net interest income – FTE, net interest margin – FTE, adjusted total revenue, adjusted noninterest income, adjusted noninterest expense, adjusted income before income taxes, adjusted income tax provision (benefit), adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders’ equity and adjusted return on average tangible common equity 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.”

First Internet Bancorp
Summary Financial Information (unaudited)
Dollar amounts in thousands, except per share data


	Three Months Ended									Twelve Months Ended

	December 31,			September 30,			December 31,			December 31,			December 31,
	2024			2024			2023			2024			2023

Net income	$	7,330		$	6,990		$	4,143		$	25,276		$	8,417

Per share and share information
Earnings per share - basic	$	0.84		$	0.80		$	0.48		$	2.91		$	0.95
Earnings per share - diluted		0.83			0.80			0.48			2.88			0.95
Dividends declared per share		0.06			0.06			0.06			0.24			0.24
Book value per common share		44.31			44.43			41.97			44.31			41.97
Tangible book value per common share ¹		43.77			43.89			41.43			43.77			41.43
Common shares outstanding		8,667,894			8,667,894			8,644,451			8,667,894			8,644,451
Average common shares outstanding:
Basic		8,696,704			8,696,634			8,683,331			8,690,416			8,837,558
Diluted		8,788,793			8,768,731			8,720,078			8,765,725			8,858,890
Performance ratios
Return on average assets		0.50	%		0.50	%		0.32	%		0.46	%		0.17	%
Return on average shareholders' equity		7.49	%		7.32	%		4.66	%		6.70	%		2.35	%
Return on average tangible common equity ¹		7.58	%		7.41	%		4.72	%		6.78	%		2.38	%
Net interest margin		1.67	%		1.62	%		1.58	%		1.65	%		1.56	%
Net interest margin - FTE ^1,2		1.75	%		1.70	%		1.68	%		1.74	%		1.67	%
Capital ratios ³
Total shareholders' equity to assets		6.69	%		6.61	%		7.02	%		6.69	%		7.02	%
Tangible common equity to tangible assets ¹		6.62	%		6.54	%		6.94	%		6.62	%		6.94	%
Tier 1 leverage ratio	6.91		%		7.13	%		7.33	%	6.91		%		7.33	%
Common equity tier 1 capital ratio	9.30		%		9.37	%		9.60	%	9.30		%		9.60	%
Tier 1 capital ratio	9.30		%		9.37	%		9.60	%	9.30		%		9.60	%
Total risk-based capital ratio	12.61		%		12.79	%		13.23	%	12.61		%		13.23	%
Asset quality
Nonperforming loans	$	28,421		$	22,478		$	9,962		$	28,421		$	9,962
Nonperforming assets		28,905			22,944			10,354			28,905			10,354
Nonperforming loans to loans		0.68	%		0.56	%		0.26	%		0.68	%		0.26	%
Nonperforming assets to total assets		0.50	%		0.39	%		0.20	%		0.50	%		0.20	%
Allowance for credit losses - loans to:
Loans		1.07	%		1.13	%		1.01	%		1.07	%		1.01	%
Nonperforming loans		157.5	%		203.4	%		389.2	%		157.5	%		389.2	%
Net charge-offs to average loans		0.91	%		0.15	%		0.12	%		0.32	%		0.31	%
Average balance sheet information
Loans	$	4,123,510		$	4,022,196		$	3,799,211		$	3,992,031		$	3,682,490
Total securities		841,700			792,409			683,468			770,793			624,050
Other earning assets		636,377			526,384			500,733			516,836			500,061
Total interest-earning assets		5,607,195			5,348,153			4,984,133			5,285,026			4,809,840
Total assets		5,782,116			5,523,910			5,154,285			5,462,730			4,968,514
Noninterest-bearing deposits		114,311			113,009			123,351			114,396			125,816
Interest-bearing deposits		4,726,449			4,384,078			3,935,519			4,318,926			3,744,964
Total deposits		4,840,760			4,497,087			4,058,870			4,433,322			3,870,780
Shareholders' equity		389,435			380,061			353,037			377,215			357,800

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, 2023)
Dollar amounts in thousands


	December 31,			September 30,			December 31,
	2024			2024			2023

Assets
Cash and due from banks	$	9,249		$	6,539		$	8,269
Interest-bearing deposits		457,161			705,940			397,629
Securities available-for-sale, at fair value		587,355			575,257			474,855
Securities held-to-maturity, at amortized cost, net of allowance for credit losses		249,796			263,320			227,153
Loans held-for-sale		54,695			32,996			22,052
Loans		4,170,646			4,035,880			3,840,220
Allowance for credit losses - loans		(44,769	)		(45,721	)		(38,774	)
Net loans		4,125,877			3,990,159			3,801,446
Accrued interest receivable		28,180			27,750			26,746
Federal Home Loan Bank of Indianapolis stock		28,350			28,350			28,350
Cash surrender value of bank-owned life insurance		41,394			41,111			40,882
Premises and equipment, net		71,453			72,150			73,463
Goodwill		4,687			4,687			4,687
Servicing asset		16,389			14,662			10,567
Other real estate owned		272			251			375
Accrued income and other assets		63,001			60,087			51,098
Total assets	$	5,737,859		$	5,823,259		$	5,167,572

Liabilities
Noninterest-bearing deposits	$	136,451		$	111,591		$	123,464
Interest-bearing deposits		4,796,755			4,686,119			3,943,509
Total deposits		4,933,206			4,797,710			4,066,973
Advances from Federal Home Loan Bank		295,000			515,000			614,934
Subordinated debt		105,150			105,071			104,838
Accrued interest payable		2,495			2,808			3,848
Accrued expenses and other liabilities		17,945			17,541			14,184
Total liabilities		5,353,796			5,438,130			4,804,777
Shareholders' equity
Voting common stock		186,094			185,631			184,700
Retained earnings		230,622			223,824			207,470
Accumulated other comprehensive loss		(32,653	)		(24,326	)		(29,375	)
Total shareholders' equity		384,063			385,129			362,795
Total liabilities and shareholders' equity	$	5,737,859		$	5,823,259		$	5,167,572

First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited, except for the twelve months ended December 31, 2023)
Dollar amounts in thousands, except per share data


	Three Months Ended									Twelve Months Ended

	December 31,			September 30,			December 31,			December 31,			December 31,
	2024			2024			2023			2024			2023

Interest income
Loans	$	61,523		$	59,792		$	52,690		$	233,844		$	192,337
Securities - taxable		7,619			6,953			5,447			26,742			17,189
Securities - non-taxable		794			1,042			962			3,775			3,532
Other earning assets		7,835			7,203			7,173			27,526			26,384
Total interest income		77,771			74,990			66,272			291,887			239,442
Interest expense
Deposits		49,111			47,415			41,078			183,150			143,363
Other borrowed funds		5,109			5,810			5,387			21,360			21,175
Total interest expense		54,220			53,225			46,465			204,510			164,538
Net interest income		23,551			21,765			19,807			87,377			74,904
Provision for credit losses		7,201			3,390			3,594			17,070			16,653
Net interest income after provision
for credit losses		16,350			18,375			16,213			70,307			58,251
Noninterest income
Service charges and fees		248			245			216			959			851
Loan servicing revenue		1,825			1,570			1,134			6,188			3,833
Loan servicing asset revaluation		(428	)		(846	)		(793	)		(2,537	)		(1,463	)
Mortgage banking activities		-			-			-			-			76
Gain on sale of loans		8,568			9,933			6,028			33,329			20,526
Other		5,723			1,127			816			9,406			2,302
Total noninterest income		15,936			12,029			7,401			47,345			26,125
Noninterest expense
Salaries and employee benefits		14,042			13,456			11,055			51,756			45,322
Marketing, advertising and promotion		696			548			518			2,589			2,567
Consulting and professional fees		967			902			893			3,744			3,082
Data processing		603			675			493			2,448			2,373
Loan expenses		1,381			1,524			1,371			5,947			5,756
Premises and equipment		3,004			2,918			2,846			11,902			10,599
Deposit insurance premium		1,464			1,219			1,334			5,000			3,880
Other		1,800			1,552			1,546			6,724			5,857
Total noninterest expense		23,957			22,794			20,056			90,110			79,436
Income before income taxes		8,329			7,610			3,558			27,542			4,940
Income tax provision (benefit)		999			620			(585	)		2,266			(3,477	)
Net income	$	7,330		$	6,990		$	4,143		$	25,276		$	8,417

Per common share data
Earnings per share - basic	$	0.84		$	0.80		$	0.48		$	2.91		$	0.95
Earnings per share - diluted	$	0.83		$	0.80		$	0.48		$	2.88		$	0.95
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, 2024							September 30, 2024							December 31, 2023

	Average			Interest /		Yield /		Average			Interest /		Yield /		Average			Interest /		Yield /
	Balance			Dividends		Cost		Balance			Dividends		Cost		Balance			Dividends		Cost

Assets
Interest-earning assets
Loans, including loans held-for-sale ¹	$	4,129,118		$	61,523	5.93	%	$	4,029,360		$	59,792	5.90	%	$	3,799,932		$	52,690	5.50	%
Securities - taxable		758,560			7,619	4.00	%		713,992			6,953	3.87	%		611,664			5,447	3.53	%
Securities - non-taxable		83,140			794	3.80	%		78,417			1,042	5.29	%		71,804			962	5.32	%
Other earning assets		636,377			7,835	4.90	%		526,384			7,203	5.44	%		500,733			7,173	5.68	%
Total interest-earning assets		5,607,195			77,771	5.52	%		5,348,153			74,990	5.58	%		4,984,133			66,272	5.28	%

Allowance for credit losses - loans		(46,427	)						(44,572	)						(36,792	)
Noninterest-earning assets		221,348							220,329							206,944
Total assets	$	5,782,116						$	5,523,910						$	5,154,285

Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits	$	574,577		$	2,910	2.01	%	$	511,446		$	2,880	2.24	%	$	382,427		$	1,646	1.71	%
Savings accounts		21,072			45	0.85	%		22,774			48	0.84	%		22,394			48	0.85	%
Money market accounts		1,236,116			12,309	3.96	%		1,224,680			12,980	4.22	%		1,225,781			12,739	4.12	%
Fintech - brokered deposits		208,545			2,111	4.03	%		153,012			1,682	4.37	%		62,098			685	4.38	%
Certificates and brokered deposits		2,686,139			31,736	4.70	%		2,472,166			29,825	4.80	%		2,242,819			25,960	4.59	%
Total interest-bearing deposits		4,726,449			49,111	4.13	%		4,384,078			47,415	4.30	%		3,935,519			41,078	4.14	%
Other borrowed funds		528,806			5,109	3.84	%		620,032			5,810	3.73	%		719,733			5,387	2.97	%
Total interest-bearing liabilities		5,255,255			54,220	4.10	%		5,004,110			53,225	4.23	%		4,655,252			46,465	3.96	%

Noninterest-bearing deposits		114,311							113,009							123,351
Other noninterest-bearing liabilities		23,115							26,730							22,645
Total liabilities		5,392,681							5,143,849							4,801,248

Shareholders' equity		389,435							380,061							353,037
Total liabilities and shareholders' equity	$	5,782,116						$	5,523,910						$	5,154,285

Net interest income				$	23,551						$	21,765						$	19,807

Interest rate spread						1.42	%						1.35	%						1.32	%

Net interest margin						1.67	%						1.62	%						1.58	%

Net interest margin - FTE ^2,3						1.75	%						1.70	%						1.68	%

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, 2024							December 31, 2023

	Average			Interest /		Yield /		Average			Interest /		Yield /
	Balance			Dividends		Cost		Balance			Dividends		Cost

Assets
Interest-earning assets
Loans, including loans held-for-sale ¹	$	3,997,397		$	233,844	5.85	%	$	3,685,729		$	192,337	5.22	%
Securities - taxable		692,806			26,742	3.86	%		551,479			17,189	3.12	%
Securities - non-taxable		77,987			3,775	4.84	%		72,571			3,532	4.87	%
Other earning assets		516,836			27,526	5.33	%		500,061			26,384	5.28	%
Total interest-earning assets		5,285,026			291,887	5.52	%		4,809,840			239,442	4.98	%

Allowance for credit losses - loans		(42,758	)						(36,038	)
Noninterest-earning assets		220,462							194,712
Total assets	$	5,462,730						$	4,968,514

Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits	$	494,082		$	10,448	2.11	%	$	366,082		$	6,186	1.69	%
Savings accounts		22,336			189	0.85	%		29,200			249	0.85	%
Money market accounts		1,230,443			51,036	4.15	%		1,276,602			49,890	3.91	%
Fintech - brokered deposits		141,860			6,023	4.25	%		33,039			1,402	4.24	%
Certificates and brokered deposits		2,430,205			115,454	4.75	%		2,040,041			85,636	4.20	%
Total interest-bearing deposits		4,318,926			183,150	4.24	%		3,744,964			143,363	3.83	%
Other borrowed funds		629,137			21,360	3.40	%		719,617			21,175	2.94	%
Total interest-bearing liabilities		4,948,063			204,510	4.13	%		4,464,581			164,538	3.69	%

Noninterest-bearing deposits		114,396							125,816
Other noninterest-bearing liabilities		23,056							20,317
Total liabilities		5,085,515							4,610,714

Shareholders' equity		377,215							357,800
Total liabilities and shareholders' equity	$	5,462,730						$	4,968,514

Net interest income				$	87,377						$	74,904

Interest rate spread						1.39	%						1.29	%

Net interest margin						1.65	%						1.56	%

Net interest margin - FTE ^2,3						1.74	%						1.67	%

¹ Includes nonaccrual loans
² On a fully-taxable equivalent ("FTE") basis assuming a 21% tax rate
³ Refer to "Non-GAAP Financial Measures" section above and "Reconciliation of Non-GAAP Financial Measures" below

First Internet Bancorp
Loans and Deposits (unaudited)
Dollar amounts in thousands


	December 31, 2024				September 30, 2024				December 31, 2023

	Amount		Percent		Amount		Percent		Amount		Percent

Commercial loans
Commercial and industrial	$	120,175	2.9	%	$	111,199	2.8	%	$	129,349	3.4	%
Owner-occupied commercial real estate		53,591	1.3	%		56,461	1.4	%		57,286	1.5	%
Investor commercial real estate		269,431	6.5	%		260,614	6.5	%		132,077	3.4	%
Construction		413,523	9.9	%		340,954	8.4	%		261,750	6.8	%
Single tenant lease financing		949,748	22.7	%		932,148	23.1	%		936,616	24.4	%
Public finance		485,867	11.6	%		462,730	11.5	%		521,764	13.6	%
Healthcare finance		181,427	4.4	%		190,287	4.7	%		222,793	5.8	%
Small business lending		331,914	8.0	%		298,645	7.4	%		218,506	5.7	%
Franchise finance		536,909	12.9	%		550,442	13.6	%		525,783	13.7	%
Total commercial loans		3,342,585	80.2	%		3,203,480	79.4	%		3,005,924	78.3	%

Consumer loans
Residential mortgage		375,160	9.0	%		378,701	9.4	%		395,648	10.3	%
Home equity		18,274	0.4	%		20,264	0.5	%		23,669	0.6	%
Trailers		210,575	5.0	%		205,230	5.1	%		188,763	4.9	%
Recreational vehicles		149,342	3.6	%		150,378	3.7	%		145,558	3.8	%
Other consumer loans		48,030	1.2	%		48,780	1.2	%		43,293	1.1	%
Total consumer loans		801,381	19.2	%		803,353	19.9	%		796,931	20.7	%

Net deferred loan fees, premiums, discounts and other ¹		26,680	0.6	%		29,047	0.7	%		37,365	1.0	%

Total loans	$	4,170,646	100.0	%	$	4,035,880	100.0	%	$	3,840,220	100.0	%


	December 31, 2024				September 30, 2024				December 31, 2023

	Amount		Percent		Amount		Percent		Amount		Percent

Deposits
Noninterest-bearing deposits	$	136,451	2.8	%	$	111,591	2.3	%	$	123,464	3.0	%
Interest-bearing demand deposits		896,661	18.2	%		538,484	11.2	%		402,976	9.9	%
Savings accounts		19,823	0.4	%		21,712	0.5	%		21,364	0.5	%
Money market accounts		1,183,789	24.0	%		1,230,707	25.7	%		1,248,319	30.8	%
Fintech - brokered deposits		-	0.0	%		211,814	4.4	%		74,401	1.8	%
Certificates of deposits		2,133,455	43.2	%		2,110,618	44.0	%		1,605,156	39.5	%
Brokered deposits		563,027	11.4	%		572,784	11.9	%		591,293	14.5	%

Total deposits	$	4,933,206	100.0	%	$	4,797,710	100.0	%	$	4,066,973	100.0	%

¹ Includes carrying value adjustments of $22.9 million, $24.1 million and $27.8 million related to terminated interest rate swaps associated with public finance loans as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively.

First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data


	Three Months Ended									Twelve Months Ended

	December 31,			September 30,			December 31,			December 31,			December 31,
	2024			2024			2023			2024			2023

Total equity - GAAP	$	384,063		$	385,129		$	362,795		$	384,063		$	362,795
Adjustments:
Goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Tangible common equity	$	379,376		$	380,442		$	358,108		$	379,376		$	358,108

Total assets - GAAP	$	5,737,859		$	5,823,259		$	5,167,572		$	5,737,859		$	5,167,572
Adjustments:
Goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Tangible assets	$	5,733,172		$	5,818,572		$	5,162,885		$	5,733,172		$	5,162,885

Common shares outstanding		8,667,894			8,667,894			8,644,451			8,667,894			8,644,451

Book value per common share	$	44.31		$	44.43		$	41.97		$	44.31		$	41.97
Effect of goodwill		(0.54	)		(0.54	)		(0.54	)		(0.54	)		(0.54	)
Tangible book value per common share	$	43.77		$	43.89		$	41.43		$	43.77		$	41.43

Total shareholders' equity to assets		6.69	%		6.61	%		7.02	%		6.69	%		7.02	%
Effect of goodwill		(0.07	%)		(0.07	%)		(0.08	%)		(0.07	%)		(0.08	%)
Tangible common equity to tangible assets		6.62	%		6.54	%		6.94	%		6.62	%		6.94	%

Total average equity - GAAP	$	389,435		$	380,061		$	353,037		$	377,215		$	357,800
Adjustments:
Average goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Average tangible common equity	$	384,748		$	375,374		$	348,350		$	372,528		$	353,113

Return on average shareholders' equity		7.49	%		7.32	%		4.66	%		6.70	%		2.35	%
Effect of goodwill		0.09	%		0.09	%		0.06	%		0.08	%		0.03	%
Return on average tangible common equity		7.58	%		7.41	%		4.72	%		6.78	%		2.38	%

Total interest income	$	77,771		$	74,990		$	66,272		$	291,887		$	239,442
Adjustments:
Fully-taxable equivalent adjustments ¹		1,152			1,133			1,238			4,650			5,233
Total interest income - FTE	$	78,923		$	76,123		$	67,510		$	296,537		$	244,675

Net interest income	$	23,551		$	21,765		$	19,807		$	87,377		$	74,904
Adjustments:
Fully-taxable equivalent adjustments ¹		1,152			1,133			1,238			4,650			5,233
Net interest income - FTE	$	24,703		$	22,898		$	21,045		$	92,027		$	80,137

Net interest margin		1.67	%		1.62	%		1.58	%		1.65	%		1.56	%
Effect of fully-taxable equivalent adjustments ¹		0.08	%		0.08	%		0.10	%		0.09	%		0.11	%
Net interest margin - FTE		1.75	%		1.70	%		1.68	%		1.74	%		1.67	%

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 Ended								Twelve Months Ended

	December 31,			September 30,		December 31,			December 31,			December 31,
	2024			2024		2023			2024			2023

Total revenue - GAAP	$	39,487		$	33,794	$	27,208		$	134,722		$	101,029
Adjustments:
Mortgage-related revenue		-			-		-			-			(65	)
Gain on prepayment of FHLB advances		(1,829	)		-		-			(1,829	)		-
Gain on termination of swaps		(2,904	)		-		-			(2,904	)		-
Adjusted total revenue	$	34,754		$	33,794	$	27,208		$	129,989		$	100,964

Noninterest income - GAAP	$	15,936		$	12,029	$	7,401		$	47,345		$	26,125
Adjustments:
Mortgage-related revenue		-			-		-			-			(65	)
Gain on prepayment of FHLB advances		(1,829	)		-		-			(1,829	)		-
Gain on termination of swaps		(2,904	)		-		-			(2,904	)		-
Adjusted noninterest income	$	11,203		$	12,029	$	7,401		$	42,612		$	26,060

Noninterest expense - GAAP	$	23,957		$	22,794	$	20,056		$	90,110		$	79,436
Adjustments:
Mortgage-related costs		-			-		-			-			(3,052	)
IT termination fees		-			-		-			(452	)		-
Anniversary expenses		-			-		-			(120	)		-
Adjusted noninterest expense	$	23,957		$	22,794	$	20,056		$	89,538		$	76,384

Income before income taxes - GAAP	$	8,329		$	7,610	$	3,558		$	27,542		$	4,940
Adjustments:¹
Mortgage-related revenue		-			-		-			-			(65	)
Mortgage-related costs		-			-		-			-			3,052
Partial charge-off of C&I participation loan		-			-		-			-			6,914
IT termination fees		-			-		-			452			-
Anniversary expenses		-			-		-			120			-
Gain on prepayment of FHLB advances		(1,829	)		-		-			(1,829	)		-
Gain on termination of swaps		(2,904	)		-		-			(2,904	)		-
Adjusted income before income taxes	$	3,596		$	7,610	$	3,558		$	23,381		$	14,841

Income tax provision (benefit) - GAAP	$	999		$	620	$	(585	)	$	2,266		$	(3,477	)
Adjustments:¹
Mortgage-related revenue		-			-		-			-			(14	)
Mortgage-related costs		-			-		-			-			641
Partial charge-off of C&I participation loan		-			-		-			-			1,452
IT termination fees		-			-		-			95			-
Anniversary expenses		-			-		-			25			-
Gain on prepayment of FHLB advances		(384	)		-		-			(384	)		-
Gain on termination of swaps		(610	)		-		-			(610	)		-
Adjusted income tax provision (benefit)	$	5		$	620	$	(585	)	$	1,392		$	(1,398	)

Net income - GAAP	$	7,330		$	6,990	$	4,143		$	25,276		$	8,417
Adjustments:
Mortgage-related revenue		-			-		-			-			(51	)
Mortgage-related costs		-			-		-			-			2,411
Partial charge-off of C&I participation loan		-			-		-			-			5,462
IT termination fees		-			-		-			357			-
Anniversary expenses		-			-		-			95			-
Gain on prepayment of FHLB advances		(1,445	)		-		-			(1,445	)		-
Gain on termination of swaps		(2,294	)		-		-			(2,294	)		-
Adjusted net income	$	3,591		$	6,990	$	4,143		$	21,989		$	16,239

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 Ended									Twelve Months Ended

	December 31,			September 30,			December 31,			December 31,			December 31,
	2024			2024			2023			2024			2023

Diluted average common shares outstanding		8,788,793			8,768,731			8,720,078			8,765,725			8,858,890

Diluted earnings per share - GAAP	$	0.83		$	0.80		$	0.48		$	2.88		$	0.95
Adjustments:
Effect of mortgage-related revenue		-			-			-			-			(0.01	)
Effect of mortgage-related costs		-			-			-			-			0.27
Effect of partial charge-off of C&I participation loan		-			-			-			-			0.62
Effect of IT termination fees		-			-			-			0.04			-
Effect of anniversary expenses		-			-			-			0.01			-
Effect of gain on prepayment of FHLB advances		(0.16	)		-			-			(0.16	)		-
Effect of gain on termination of swaps		(0.26	)		-			-			(0.26	)		-
Adjusted diluted earnings per share	$	0.41		$	0.80		$	0.48		$	2.51		$	1.83

Return on average assets		0.50	%		0.50	%		0.32	%		0.46	%		0.17	%
Effect of mortgage-related revenue		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Effect of mortgage-related costs		0.00	%		0.00	%		0.00	%		0.00	%		0.05	%
Effect of partial charge-off of C&I participation loan		0.00	%		0.00	%		0.00	%		0.00	%		0.11	%
Effect of IT termination fees		0.00	%		0.00	%		0.00	%		0.01	%		0.00	%
Effect of anniversary expenses		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Effect of gain on prepayment of FHLB advances		(0.10	%)		0.00	%		0.00	%		(0.03	%)		0.00	%
Effect of gain on termination of swaps		(0.16	%)		0.00	%		0.00	%		(0.04	%)		0.00	%
Adjusted return on average assets		0.24	%		0.50	%		0.32	%		0.40	%		0.33	%

Return on average shareholders' equity		7.49	%		7.32	%		4.66	%		6.70	%		2.35	%
Effect of mortgage-related revenue		0.00	%		0.00	%		0.00	%		0.00	%		(0.01	%)
Effect of mortgage-related costs		0.00	%		0.00	%		0.00	%		0.00	%		0.67	%
Effect of partial charge-off of C&I participation loan		0.00	%		0.00	%		0.00	%		0.00	%		1.53	%
Effect of IT termination fees		0.00	%		0.00	%		0.00	%		0.09	%		0.00	%
Effect of anniversary expenses		0.00	%		0.00	%		0.00	%		0.03	%		0.00	%
Effect of gain on prepayment of FHLB advances		(1.48	%)		0.00	%		0.00	%		(0.38	%)		0.00	%
Effect of gain on termination of swaps		(2.34	%)		0.00	%		0.00	%		(0.61	%)		0.00	%
Adjusted return on average shareholders' equity		3.67	%		7.32	%		4.66	%		5.83	%		4.54	%

Return on average tangible common equity		7.58	%		7.41	%		4.72	%		6.78	%		2.38	%
Effect of mortgage-related revenue		0.00	%		0.00	%		0.00	%		0.00	%		(0.01	%)
Effect of mortgage-related costs		0.00	%		0.00	%		0.00	%		0.00	%		0.68	%
Effect of partial charge-off of C&I participation loan		0.00	%		0.00	%		0.00	%		0.00	%		1.55	%
Effect of IT termination fees		0.00	%		0.00	%		0.00	%		0.10	%		0.00	%
Effect of anniversary expenses		0.00	%		0.00	%		0.00	%		0.03	%		0.00	%
Effect of gain on prepayment of FHLB advances		(1.49	%)		0.00	%		0.00	%		(0.39	%)		0.00	%
Effect of gain on termination of swaps		(2.37	%)		0.00	%		0.00	%		(0.62	%)		0.00	%
Adjusted return on average tangible common equity		3.72	%		7.41	%		4.72	%		5.90	%		4.60	%

View source version on businesswire.com: https://www.businesswire.com/news/home/20250120819618/en/

Investors/Analysts

Paula Deemer

Director of Corporate Administration

(317) 428-4628

investors@firstib.com

Media

PANBlast for First Internet Bank

Zach Weismiller

firstib@panblastpr.com

Source: First Internet Bancorp

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