EX-99.1 2 inbk-2q2023xex991.htm EX-99.1 Document



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First Internet Bancorp Reports Second Quarter 2023 Results

Fishers, Indiana, July 26, 2023 – First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the second quarter ended June 30, 2023.

Second Quarter 2023 Financial Highlights

•Net income of $3.9 million and diluted earnings per share of $0.44

•Deposit growth of $232.0 million, a 6.4% increase from the first quarter of 2023

•Loan growth of $39.6 million, a 1.1% increase from the first quarter of 2023

•The loans to deposits ratio was 94.6%, compared to 99.6% in the first quarter of 2023

•Net interest margin of 1.53% and fully-taxable equivalent net interest margin of 1.64%, compared to 1.76% and 1.89%, respectively, for the first quarter of 2023

•Nonperforming loans declined to 0.17% of total loans

•Repurchased 203,000 common shares at an average price of $13.52 per share

•Tangible common equity to tangible assets of 7.07%; CET1 ratio of 10.10%; tangible book value per share of $39.85, a 1.6% increase from the first quarter of 2023
•
“Following the events in the banking sector that occurred in March, we responded quickly to further enhance our balance sheet liquidity,” said David Becker, Chairman and Chief Executive Officer. “These actions resulted in higher deposit costs and cash balances, which impacted our earnings, but further solidified our strong foundation. Moreover, credit measures improved during the second quarter, asset quality overall remains sound, and our capital position is strong, leaving us well-positioned for the road ahead. At the same time, we continued to execute our strategy of optimizing the loan portfolio composition through funding high quality variable rate and higher yielding loans. New origination yields continued to meaningfully improve during the quarter, and our SBA team delivered strong results, setting the stage for us to achieve stronger earnings and profitability as deposit costs stabilize.”

Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2023 was $18.1 million, compared to $19.6 million for the first quarter of 2023, and $25.7 million for the second quarter of 2022. On a fully-taxable







equivalent basis, net interest income for the second quarter of 2023 was $19.5 million, compared to $21.0 million for the first quarter of 2023, and $27.1 million for the second quarter of 2022.

Total interest income for the second quarter of 2023 was $58.1 million, an increase of 11.7% compared to the first quarter of 2023, and an increase of 61.0% compared to the second quarter of 2022. On a fully-taxable equivalent basis, total interest income for the second quarter of 2023 was $59.5 million, an increase of 11.3% compared to the first quarter of 2023 and an increase of 58.7% compared to the second quarter of 2022. The increase from the linked quarter was due primarily to growth in interest income earned on loans, other earning assets and securities. The yield on average interest-earning assets for the second quarter of 2023 increased to 4.89% from 4.69% for the first quarter of 2023 due primarily to a 19 basis point (“bp”) increase in the average loan yield, a 49 bp increase in the yield earned on other earning assets, and a 7 bp increase in the yield earned on securities. Compared to the linked quarter, average loan balances increased $72.9 million, or 2.0%, while the average balance of other earning assets increased $180.0 million, or 54.3%, and the average balance of securities increased $18.9 million, or 3.2%.

Interest income earned on commercial loans was higher due to increased average balances and the positive impact of higher rates in the variable rate small business lending, construction and investor commercial real estate portfolios, as well as growth and higher yields on new originations in the franchise finance portfolio. This was partially offset by lower average balances in the healthcare finance and public finance portfolios.

In the consumer portfolio, interest income was up due to higher yields on new originations and growth in the average balances of the trailers, recreational vehicles and other consumer loans portfolios. Additionally, the average balance in the residential mortgage portfolio increased due to draws on existing construction/perm loans.

The yield on funded portfolio originations was 8.42% in the second quarter of 2023, an increase of 66 bps compared to the first quarter of 2023, and an increase of 366 bps compared to the second quarter of 2022. Because of the fixed-rate nature of certain larger portfolios, there is a lagging impact of origination yields on the portfolio, which are expected to increase over time.

Interest earned on cash and other earning asset balances increased $2.7 million, or 72.2%, during the quarter due to the impact of higher short-term interest rates on cash balances as well as a $180.0 million, or 60.0%, increase in average cash balances. Furthermore, interest income earned on securities increased $0.3 million, or 6.6%, during the second quarter of 2023 due to an increase in the yield earned on the portfolio and an increase in average balances. The yield on the portfolio increased 7 bps to 3.12%, driven primarily by variable rate securities resetting higher and higher yields on new purchases.

Total interest expense for the second quarter of 2023 was $40.0 million, an increase of $7.5 million, or 23.2%, compared to the linked quarter, due to increases in both market interest rates and average interest-bearing deposit balances throughout the quarter. Interest expense related to interest-bearing deposits increased $7.4 million, or 27.2%, driven primarily by higher costs on CDs and brokered deposits and, to a lesser extent, interest-bearing demand deposits. The cost of interest-bearing deposits was 3.75% for the second quarter, compared to 3.24% for the first quarter of 2023. The pace of increase in deposit costs during the second quarter was the slowest experienced by the Company in the past four quarters.








Average CD balances increased $231.1 million, or 21.9%, while the cost of funds increased 72 bps, as strong consumer and small business demand resumed during the quarter. The average balance of brokered deposits increased $147.3 million, or 24.9%, due in part to funding early in the quarter to supplement on-balance sheet liquidity, while the cost of funds increased 54 bps.

The average balance of BaaS deposits increased by $62.3 million, or 137.3%, from the first quarter of 2023 and totaled $154.5 million at quarter-end as existing programs grew and other Fintech programs were onboarded during the quarter.

Net interest margin (“NIM”) was 1.53% for the second quarter of 2023, down from 1.76% for the first quarter of 2023, and 2.60% for the second quarter of 2022. Fully-taxable equivalent NIM (“FTE NIM”) was 1.64% for the second quarter of 2023, down from 1.89% for the first quarter of 2023, and 2.74% for the second quarter of 2022. The decreases in NIM and FTE NIM compared to the linked quarter were driven primarily by the effect of higher interest-bearing deposit costs, partially offset by higher yields on loans, other earning assets and securities. Additionally, given the volatility in the banking industry over the last several months, the Company carried higher cash balances during the quarter, which were estimated to have negatively impacted NIM and FTE NIM by 6 to 7 bps.

Noninterest Income
Noninterest income for the second quarter of 2023 was $5.9 million, up $0.4 million, or 7.8%, from the first quarter of 2023, and up $1.6 million, or 36.1%, from the second quarter of 2022. Gain on sale of loans totaled $4.9 million for the second quarter of 2023, up $0.8 million, or 19.9%, from the linked quarter. Gain on sale revenue in the quarter consisted entirely of gain on the sales of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans, which increased due to a higher volume of loan sales, as well as modestly higher net premiums. Net loan servicing revenue declined $0.2 million during the quarter due to amortization and a lower fair value adjustment to the loan servicing asset.

Noninterest Expense
Noninterest expense for the second quarter of 2023 was $18.7 million, down $2.3 million, or 10.9%, from the first quarter of 2023, and up $0.7 million, or 3.8%, from the second quarter of 2022. Excluding $3.1 million of mortgage operation and exit costs, noninterest expense totaled $17.9 million for the first quarter of 2023. On a comparable basis, noninterest expense increased $0.8 million, or 4.3%, in the second quarter as compared to the adjusted noninterest expense for the first quarter. Salaries and employee benefits expense increased $1.1 million in the second quarter due primarily to higher SBA incentive compensation driven by increased origination activity. In addition, deposit insurance premiums increased from the linked quarter due primarily to year-over-year asset growth and changes in the composition of the loan and deposit portfolios. These increases were partially offset by declines in loan expenses, consulting and professional fees and data processing expenses.

Income Taxes
The Company recognized an income tax benefit of $0.2 million for the second quarter of 2023, compared to an income tax benefit of $2.3 million for the first quarter of 2023, and an income tax expense of $1.3 million and an effective tax rate of 11.8% for the second quarter of 2022. The income tax benefit in the second quarter of 2023 reflects the benefit of tax-exempt income relative to the lower amount of stated pre-tax income.








Loans and Credit Quality
Total loans as of June 30, 2023 were $3.6 billion, an increase of $39.6 million, or 1.1%, compared to March 31, 2023, and an increase of $564.7 million, or 18.3%, compared to June 30, 2022. Total commercial loan balances were $2.8 billion as of June 30, 2023, an increase of $25.2 million, or 0.9%, compared to March 31, 2023, and an increase of $393.3 million, or 16.1%, compared to June 30, 2022. Compared to the linked quarter, the increase in commercial loan balances was driven primarily by growth in construction and small business lending balances, as well as modest growth in franchise finance balances. These items were partially offset by decreases in the public finance and single tenant lease financing portfolios as well as continued runoff in the healthcare finance portfolio.

Total consumer loan balances were $772.7 million as of June 30, 2023, an increase of $16.3 million, or 2.2%, compared to March 31, 2023, and an increase of $178.6 million, or 30.1%, compared to June 30, 2022. The increase compared to the linked quarter was due primarily to higher balances in the trailers, recreational vehicles and other consumer loans portfolios, as well as draws on existing residential mortgage construction/perm loans.

Total delinquencies 30 days or more past due were 0.09% of total loans as of June 30, 2023, compared to 0.13% at March 31, 2023, and 0.06% as of June 30, 2022. Nonperforming loans to total loans was 0.17% as of June 30, 2023, compared to 0.26% at March 31, 2023, and 0.15% as of June 30, 2022. Nonperforming loans totaled $6.2 million at June 30, 2023, down from $9.2 million at March 31, 2023. The decrease was due primarily to the resolution of one C&I participation loan that was placed on nonaccrual status in the first quarter of 2023.

The allowance for credit losses (“ACL”) as a percentage of total loans was 0.99% as of June 30, 2023, compared to 1.02% as of March 31, 2023, and 0.95% as of June 30, 2022. The decrease in the ACL reflects the positive impact of economic data on forecasted loss rates for certain portfolios.

Net charge-offs were $1.6 million in the second quarter of 2023, compared to net charge-offs of $7.2 million in the first quarter of 2023. The linked quarter decline was due to the partial charge-off of the aforementioned C&I participation loan in the first quarter, which totaled $6.9 million. Net charge-offs in the second quarter were driven primarily by small business lending, as well as one franchise finance loan. As a result, net charge-offs to average loans totaled 17 bps in the second quarter, down from 82 bps in the first quarter.

The provision for credit losses in the second quarter was $1.7 million, compared to $9.4 million for the first quarter of 2023, which included the charge-off of the C&I participation loan mentioned above. The provision for the second quarter was driven primarily by net charge-offs and an increase in the reserve for unfunded commitments, partially offset by the positive impact of economic forecasts on certain portfolios.


Capital
As of June 30, 2023, total shareholders’ equity was $354.3 million, a decrease of $1.2 million, or 0.3%, compared to March 31, 2023, and a decrease of $11.0 million, or 3.0%, compared to June 30, 2022. The decrease in shareholders’ equity during the second quarter of 2023 was due primarily to stock repurchase activity and an increase in accumulated other comprehensive loss, partially offset by net income earned during the quarter. Book value per common share was $40.38 as of June 30, 2023, up from $39.76 as of March 31, 2023, and up from $38.85 as of June 30, 2022. Tangible book







value per share was $39.85, up from $39.23 as of March 31, 2023, and up from $38.35 as of June 30, 2022.

In connection with its previously announced stock repurchase program, the Company repurchased 203,000 shares of its common stock during the second quarter of 2023 at an average price of $13.52 per share. The Company has repurchased $38.9 million of stock under its authorized programs since November of 2021.

The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of June 30, 2023.
As of June 30, 2023
CompanyBank
Total shareholders’ equity to assets 7.16%8.86%
Tangible common equity to tangible assets 1
7.07%8.77%
Tier 1 leverage ratio 2
7.63%9.35%
Common equity tier 1 capital ratio 2
10.10%12.39%
Tier 1 capital ratio 2
10.10%12.39%
Total risk-based capital ratio 2
13.87%13.37%
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, July 27, 2023 to discuss its quarterly financial results. The call can be accessed via telephone at (888) 259-6580; access code: 24458732. A recorded replay can be accessed through August 26, 2023 by dialing (877) 674-7070; access code: 458732

Additionally, interested parties can listen to a live webcast of the call on the Company's website at www.firstinternetbancorp.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.

About First Internet Bancorp
First Internet Bancorp is a financial holding company with assets of $4.9 billion as of June 30, 2023. 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”. Additional information about the Company is available at www.firstinternetbancorp.com and additional information about First Internet Bank, including its products and services, is available at www.firstib.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements with respect to the financial condition, results of operations, trends in lending policies and loan programs, plans and prospective business partnerships, objectives, future performance and business of the Company. Forward-looking statements are generally identifiable by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “growth,” “help,” “may,” “opportunities,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “thereafter,” “well-positioned,” “will,” or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause actual results to







differ materially from the information in the forward-looking statements. Such statements are subject to certain risks and uncertainties including: our business and operations and the business and operations of our vendors and customers: general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products; our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that is the collateral for our loans. Other factors that may cause such differences include: failures or breaches of or interruptions in the communications and information systems on which we rely to conduct our business; failure of our plans to grow our commercial and industrial, construction, SBA, and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; the anticipated impacts of inflation and rising interest rates on the general economy; risks relating to the regulation of financial institutions; and other factors identified in reports we file with the U.S. Securities and Exchange Commission. All statements in this press release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures, specifically tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, average tangible common equity, return on average tangible common equity, total interest income – FTE, net interest income – FTE, net interest margin – FTE, adjusted total revenue, adjusted noninterest income, adjusted noninterest expense, adjusted income (loss) before income taxes, adjusted income tax (benefit) provision, 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 used by the Company’s management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”




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







First Internet Bancorp
Summary Financial Information (unaudited)
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2023		March 31, 2023June 30,
2022		June 30,
2023		June 30,
2022
Net Income (loss)$3,882 (3,017)$9,545 $865 $20,754 
Per share and share information
Earnings (loss) per share - basic$0.44 $(0.33)$0.99 $0.10 $2.14 
Earnings(loss) per share - diluted0.44 (0.33)0.99 0.10 2.13 
Dividends declared per share0.06 0.06 0.06 0.12 0.12 
Book value per common share40.38 39.76 38.85 40.38 38.85 
Tangible book value per common share 1
39.85 39.23 38.35 39.85 38.35 
Common shares outstanding8,774,507 8,943,477 9,404,000 8,774,507 9,404,000 
Average common shares outstanding:
Basic8,903,213 9,024,072 9,600,383 8,963,308 9,694,729 
Diluted8,908,180 9,024,072 9,658,689 8,980,262 9,764,232 
Performance ratios
Return on average assets0.32 %(0.26 %)0.93 %0.04 %1.01 %
Return on average shareholders' equity4.35 %(3.37 %)10.23 %0.48 %11.09 %
Return on average tangible common equity 1
4.40 %(3.41 %)10.36 %0.49 %11.23 %
Net interest margin1.53 %1.76 %2.60 %1.64 %2.58 %
Net interest margin - FTE 1,2
1.64 %1.89 %2.74 %1.76 %2.71 %
Capital ratios 3
Total shareholders' equity to assets7.16 %7.53 %8.91 %7.16 %8.91 %
Tangible common equity to tangible assets 1
7.07 %7.44 %8.81 %7.07 %8.81 %
Tier 1 leverage ratio7.63 %8.10 %9.45 %7.63 %9.45 %
Common equity tier 1 capital ratio10.10 %10.30 %12.46 %10.10 %12.46 %
Tier 1 capital ratio10.10 %10.30 %12.46 %10.10 %12.46 %
Total risk-based capital ratio13.87 %14.13 %16.74 %13.87 %16.74 %
Asset quality
Nonperforming loans$6,227 $9,221 $4,527 $6,227 $4.527 
Nonperforming assets6,397 9,346 4,550 6,397 4,550 
Nonperforming loans to loans0.17 %0.26 %0.15 %0.17 %0.15 %
Nonperforming assets to total assets0.13 %0.20 %0.11 %0.13 %0.11 %
Allowance for credit losses - loans to:
Loans0.99 %1.02 %0.95 %0.99 %0.95 %
Nonperforming loans579.1 %400.0 %644.0 %579.1 %644.0 %
Net charge-offs to average loans0.17 %0.82 %0.04 %0.49 %0.05 %
Average balance sheet information
Loans$3,653,839 $3,573,827 $2,998,144 $3,614,054 $2,973,173 
Total securities604,182 585,270 620,396 594,777 634,485 
Other earning assets511,295 331,294 322,302 421,793 388,760 
Total interest-earning assets4,771,623 4,499,782 3,962,589 4,636,453 4,021,330 
Total assets4,927,712 4,647,156 4,097,865 4,788,209 4,156,068 
Noninterest-bearing deposits117,496 134,988 108,980 126,194 110,605 
Interest-bearing deposits3,713,086 3,411,969 3,018,422 3,563,359 3,044,775 
Total deposits3,830,582 3,546,957 3,127,402 3,689,553 3,155,380 
Shareholders' equity358,312 363,273 374,274 360,779 377,504 

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,
2023		March 31,
2023		June 30,
2022
Assets
Cash and due from banks$9,503 $27,741 $6,155 
Interest-bearing deposits456,128 276,231 201,798 
Securities available-for-sale, at fair value379,394 395,833 425,489 
Securities held-to-maturity, at amortized cost, net of allowance for credit losses230,605 210,761 185,113 
Loans held-for-sale32,001 18,144 31,580 
Loans3,646,832 3,607,242 3,082,127 
Allowance for credit losses - loans(36,058)(36,879)(29,153)
Net loans3,610,774 3,570,363 3,052,974 
Accrued interest receivable24,101 22,322 17,466 
Federal Home Loan Bank of Indianapolis stock28,350 28,350 25,219 
Cash surrender value of bank-owned life insurance40,357 40,105 39,369 
Premises and equipment, net73,525 74,248 70,288 
Goodwill4,687 4,687 4,687 
Servicing asset8,252 7,312 5,345 
Other real estate owned106 106 — 
Accrued income and other assets49,266 45,116 34,323 
Total assets$4,947,049 $4,721,319 $4,099,806 
Liabilities
Noninterest-bearing deposits$119,291 $140,449 $126,153 
Interest-bearing deposits3,735,017 3,481,841 3,025,948 
Total deposits3,854,308 3,622,290 3,152,101 
Advances from Federal Home Loan Bank614,931 614,929 464,925 
Subordinated debt104,684 104,608 104,381 
Accrued interest payable3,338 2,592 2,005 
Accrued expenses and other liabilities15,456 21,328 11,062 
Total liabilities4,592,717 4,365,747 3,734,474 
Shareholders' equity
Voting common stock186,545 189,202 204,071 
Retained earnings200,973 197,623 192,011 
Accumulated other comprehensive loss(33,186)(31,253)(30,750)
Total shareholders' equity354,332 355,572 365,332 
Total liabilities and shareholders' equity$4,947,049 $4,721,319 $4,099,806 







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,
2023		March 31,
2023		June 30,
2022		June 30,
2023		June 30,
2022
Interest income
Loans$46,906 $43,843 $32,415 $90,749 $65,603 
Securities - taxable3,835 3,606 2,567 7,441 4,788 
Securities - non-taxable860 798 328 1,658 577 
Other earning assets6,521 3,786 796 10,307 1,172 
Total interest income58,122 52,033 36,106 110,155 72,140 
Interest expense
Deposits34,676 27,270 6,408 61,946 12,505 
Other borrowed funds5,301 5,189 4,018 10,490 8,205 
Total interest expense39,977 32,459 10,426 72,436 20,710 
Net interest income18,145 19,574 25,680 37,719 51,430 
Provision for credit losses1,698 9,415 1,185 11,113 1,976 
Net interest income after provision for credit losses16,447 10,159 24,495 26,606 49,454 
Noninterest income
Service charges and fees218 209 281 427 597 
Loan servicing revenue850 785 620 1,635 1,205 
Loan servicing asset revaluation(358)(55)(470)(413)(767)
Mortgage banking activities— 76 1,710 76 3,583 
Gain on sale of loans4,868 4,061 1,952 8,929 5,797 
Other293 370 221 663 719 
Total noninterest income5,871 5,446 4,314 11,317 11,134 
Noninterest expense
Salaries and employee benefits10,706 11,794 10,832 22,500 20,710 
Marketing, advertising and promotion705 844 920 1,549 1,676 
Consulting and professional fees711 926 1,197 1,637 3,122 
Data processing520 659 490 1,179 939 
Loan expenses1,072 1,977 693 3,049 2,275 
Premises and equipment2,661 2,777 2,419 5,438 4,959 
Deposit insurance premium936 543 287 1,479 568 
Other1,359 1,434 1,147 2,793 2,516 
Total noninterest expense18,670 20,954 17,985 39,624 36,765 
Income (loss) before income taxes3,648 (5,349)10,824 (1,701)23,823 
Income tax (benefit) provision(234)(2,332)1,279 (2,566)3,069 
Net income (loss)$3,882 $(3,017)$9,545 $865 $20,754 
Per common share data
Earnings (loss) per share - basic$0.44 $(0.33)$0.99 $0.10 $2.14 
Earnings (loss) per share - diluted$0.44 $(0.33)$0.99 $0.10 $2.13 
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, 2023March 31, 2023June 30, 2022
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,656,146 $46,906 5.15 %$3,583,218 $43,843 4.96 %$3,019,891 $32,415 4.31 %
Securities - taxable531,040 3,835 2.90 %511,923 3,606 2.86 %543,422 2,567 1.89 %
Securities - non-taxable73,142 860 4.72 %73,347 798 4.41 %76,974 328 1.71 %
Other earning assets511,295 6,521 5.12 %331,294 3,786 4.63 %322,302 796 0.99 %
Total interest-earning assets4,771,623 58,122 4.89 %4,499,782 52,033 4.69 %3,962,589 36,106 3.65 %
Allowance for credit losses - loans(36,671)(35,075)(28,599)
Noninterest-earning assets192,760 182,449 163,875 
Total assets$4,927,712 $4,647,156 $4,097,865 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$359,969 $1,509 1.68 %$333,642 $900 1.09 %$348,274 $466 0.54 %
Savings accounts29,915 64 0.86 %38,482 82 0.86 %66,657 68 0.41 %
Money market accounts1,274,453 12,314 3.88 %1,377,600 12,300 3.62 %1,427,665 1,921 0.54 %
BaaS - brokered deposits22,918 230 4.03 %14,741 138 3.80 %71,234 154 0.87 %
Certificates and brokered deposits2,025,831 20,559 4.07 %1,647,504 13,850 3.41 %1,104,592 3,799 1.38 %
Total interest-bearing deposits3,713,086 34,676 3.75 %3,411,969 27,270 3.24 %3,018,422 6,408 0.85 %
Other borrowed funds719,577 5,301 2.95 %719,499 5,189 2.92 %583,553 4,018 2.76 %
Total interest-bearing liabilities4,432,663 39,977 3.62 %4,131,468 32,459 3.19 %3,601,975 10,426 1.16 %
Noninterest-bearing deposits117,496 134,988 108,980 
Other noninterest-bearing liabilities19,241 17,427 12,636 
Total liabilities4,569,400 4,283,883 3,723,591 
Shareholders' equity358,312 363,273 374,274 
Total liabilities and shareholders' equity$4,927,712 $4,647,156 $4,097,865 
Net interest income$18,145 $19,574 $25,680 
Interest rate spread1.27 %1.50 %2.49 %
Net interest margin1.53 %1.76 %2.60 %
Net interest margin - FTE 2,3
1.64 %1.89 %2.74 %
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, 2023June 30, 2022
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,619,883 $90,749 5.06 %$2,998,085 $65,603 4.41 %
Securities - taxable521,533 7,441 2.88 %555,533 4,788 1.74 %
Securities - non-taxable73,244 1,658 4.56 %78,952 577 1.47 %
Other earning assets421,793 10,307 4.93 %388,760 1,172 0.61 %
Total interest-earning assets4,636,453 110,155 4.79 %4,021,330 72,140 3.62 %
Allowance for loan losses(35,877)(28,288)
Noninterest-earning assets187,633 163,026 
Total assets$4,788,209 $4,156,068 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$346,878 $2,409 1.40 %$333,361 $878 0.53 %
Savings accounts34,175 145 0.86 %63,653 121 0.38 %
Money market accounts1,325,741 24,614 3.74 %1,440,976 3,425 0.48 %
BaaS - brokered deposits18,852 368 3.94 %41,836 160 0.77 %
Certificates and brokered deposits1,837,713 34,410 3.78 %1,164,949 7,921 1.37 %
Total interest-bearing deposits3,563,359 61,946 3.51 %3,044,775 12,505 0.83 %
Other borrowed funds719,538 10,490 2.94 %601,274 8,205 2.75 %
Total interest-bearing liabilities4,282,897 72,436 3.41 %3,646,049 20,710 1.15 %
Noninterest-bearing deposits126,194 110,605 
Other noninterest-bearing liabilities18,339 21,910 
Total liabilities4,427,430 3,778,564 
Shareholders' equity360,779 377,504 
Total liabilities and shareholders' equity$4,788,209 $4,156,068 
Net interest income$37,719 $51,430 
Interest rate spread1.38 %2.47 %
Net interest margin1.64 %2.58 %
Net interest margin - FTE 2,3
1.76 %2.71 %
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, 2023March 31, 2023June 30, 2022
AmountPercentAmountPercentAmountPercent
Commercial loans
Commercial and industrial$112,423 3.1 %$113,198 3.1 %$110,540 3.6 %
Owner-occupied commercial real estate59,564 1.6 %59,643 1.7 %61,277 2.0 %
Investor commercial real estate137,504 3.8 %142,174 3.9 %52,648 1.7 %
Construction192,453 5.3 %158,147 4.4 %143,475 4.7 %
Single tenant lease financing947,466 25.9 %952,533 26.4 %867,181 28.1 %
Public finance575,541 15.8 %604,898 16.8 %613,759 19.9 %
Healthcare finance245,072 6.7 %256,670 7.1 %317,180 10.3 %
Small business lending 170,550 4.7 %136,382 3.8 %102,724 3.3 %
Franchise finance390,479 10.6 %382,161 10.6 %168,942 5.5 %
Total commercial loans2,831,052 77.5 %2,805,806 77.8 %2,437,726 79.1 %
Consumer loans
Residential mortgage396,154 10.9 %392,062 10.9 %281,124 9.1 %
Home equity24,375 0.7 %26,160 0.7 %19,928 0.6 %
Trailers178,035 4.9 %172,640 4.8 %154,555 5.0 %
Recreational vehicles133,283 3.7 %128,307 3.6 %105,876 3.4 %
Other consumer loans40,806 1.1 %37,186 1.0 %32,524 1.2 %
Total consumer loans772,653 21.3 %756,355 21.0 %594,007 19.3 %
Net deferred loan fees, premiums, discounts and other 1
43,127 1.2 %45,081 1.2 %50,394 1.6 %
Total loans$3,646,832 100.0 %$3,607,242 100.0 %$3,082,127 100.0 %
June 30, 2023March 31, 2023June 30, 2022
AmountPercentAmountPercentAmountPercent
Deposits
Noninterest-bearing deposits$119,291 3.1 %$140,449 3.9 %$126,153 4.0 %
Interest-bearing demand deposits398,899 10.3 %351,641 9.7 %350,551 11.1 %
Savings accounts28,239 0.7 %32,762 0.9 %65,365 2.1 %
Money market accounts1,232,719 32.0 %1,254,013 34.6 %1,363,424 43.3 %
BaaS - brokered deposits25,549 0.7 %25,725 0.7 %194,133 6.2 %
Certificates of deposits1,366,409 35.5 %1,170,094 32.3 %800,598 25.3 %
Brokered deposits 683,202 17.7 %647,606 17.9 %251,877 8.0 %
Total deposits$3,854,308 100.0 %$3,622,290 100.0 %$3,152,101 100.0 %

1 Includes carrying value adjustments of $30.5 million, $31.5 million and 35.4 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2023, March 31, 2023 and June 30, 2022, respectively.








First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2023		March 31,
2023		June 30,
2022		June 30,
2023		June 30,
2022
Total equity - GAAP$354,332 $355,572 $365,332 $354,332 $365,332 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible common equity$349,645 $350,885 $360,645 $349,645 $360,645 
Total assets - GAAP$4,947,049 $4,721,319 $4,099,806 $4,947,049 $4,099,806 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible assets$4,942,362 $4,716,632 $4,095,119 $4,942,362 $4,095,119 
Common shares outstanding8,774,507 8,943,477 9,404,000 8,774,507 9,404,000 
Book value per common share$40.38 $39.76 $38.85 $40.38 $38.85 
Effect of goodwill(0.53)(0.53)(0.50)(0.53)(0.50)
Tangible book value per common share$39.85 $39.23 $38.35 $39.85 $38.35 
Total shareholders' equity to assets7.16 %7.53 %8.91 %7.16 %8.91 %
Effect of goodwill(0.09 %)(0.09 %)(0.10 %)(0.09 %)(0.10 %)
Tangible common equity to tangible assets7.07 %7.44 %8.81 %7.07 %8.81 %
Total average equity - GAAP$358,312 $363,273 $374,274 $360,779 $377,504 
Adjustments:
           Average goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Average tangible common equity$353,625 $358,586 $369,587 $356,092 $372,817 
Return on average shareholders' equity4.35 %(3.37 %)10.23 %0.48 %11.09 %
Effect of goodwill0.05 %(0.04 %)0.13 %0.01 %0.14 %
Return on average tangible common equity4.40 %(3.41 %)10.36 %0.49 %11.23 %
Total interest income$58,122 $52,033 $36,106 $110,155 $72,140 
Adjustments:
Fully-taxable equivalent adjustments 1
1,347 1,383 1,377 2,731 2,691 
Total interest income - FTE$59,469 $53,416 $37,483 $112,886 $74,831 
Net interest income$18,145 $19,574 $25,680 $37,719 $51,430 
Adjustments:
Fully-taxable equivalent adjustments 1
1,347 1,383 1,377 2,731 2,691 
Net interest income - FTE$19,492 $20,957 $27,057 $40,450 $54,121 
Net interest margin1.53 %1.76 %2.60 %1.64 %2.58 %
Effect of fully-taxable equivalent adjustments 1
0.11 %0.13 %0.14 %0.12 %0.13 %
Net interest margin - FTE1.64 %1.89 %2.74 %1.76 %2.71 %
1Assuming a 21% tax rate







First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2023		March 31,
2023		June 30,
2022		June 30,
2023		June 30,
2022
Total revenue - GAAP$24,016 $25,020 $29,994 $49,036 $62,564 
Adjustments:
     Mortgage-related revenue— (65)— — — 
Adjusted total revenue$24,016 $24,955 $29,994 $49,036 $62,564 
Noninterest income - GAAP$5,871 $5,446 $4,314 $11,317 $11,134 
Adjustments:
     Mortgage-related revenue— (65)— (65)— 
Adjusted noninterest income$5,871 $5,381 $4,314 $11,252 $11,134 
Noninterest expense - GAAP$18,670 $20,954 $17,985 $39,624 $36,765 
Adjustments:
     Mortgage-related costs— (3,052)— (3,052)— 
     Acquisition-related expenses— — (103)— (273)
     Nonrecurring consulting fee— — — — (875)
     Discretionary inflation bonus— — (531)— (531)
     Accelerated equity compensation— — (289)— (289)
Adjusted noninterest expense$18,670 $17,902 $17,062 $36,572 $34,797 
Income (loss) before income taxes - GAAP$3,648 $(5,349)$10,824 $(1,701)$23,823 
Adjustments:1
     Mortgage-related revenue— (65)— (65)— 
     Mortgage-related costs— 3,052 — 3,052 — 
     Acquisition-related expenses— — 103 — 273 
     Partial charge-off of C&I participation loan— 6,914 — 6,914 — 
     Nonrecurring consulting fee— — — — 875 
     Discretionary inflation bonus— — 531 — 531 
     Accelerated equity compensation— — 289 — 289 
Adjusted income (loss) before income taxes$3,648 $4,552 $11,747 $8,200 $25,791 
Income tax (benefit) provision - GAAP$(234)$(2,332)$1,279 $(2,566)$3,069 
Adjustments:1
     Mortgage-related revenue— (14)— (14)— 
     Mortgage-related costs— 641 — 641 — 
     Acquisition-related expenses— — 21 — 57 
     Partial charge-off of C&I participation loan— 1,452 — 1,452 — 
     Nonrecurring consulting fee— — — — 184 
     Discretionary inflation bonus— — 112 — 112 
     Accelerated equity compensation— — 61 — 61 
Adjusted income tax (benefit) provision$(234)$(253)$1,473 $(487)$3,483 
Net income (loss) - GAAP$3,882 $(3,017)$9,545 $865 $20,754 
Adjustments:
     Mortgage-related revenue— (51)— (51)— 
     Mortgage-related costs— 2,411 — 2,411 — 
     Acquisition-related expenses— — 82 — 216 
     Partial charge-off of C&I participation loan— 5,462 — 5,462 — 
     Nonrecurring consulting fee— — — — 691 
     Discretionary inflation bonus— — 419 — 419 
     Accelerated equity compensation— — 228 — 228 
Adjusted net income$3,882 $4,805 $10,274 $8,687 $22,308 
1Assuming a 21% tax rate







First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedSix Months Ended
June 30,
2023		March 31,
2023		June 30,
2022		June 30,
2023		June 30,
2022
Diluted average common shares outstanding8,908,180 9,024,072 9,658,689 8,980,262 9,764,232 
Diluted (loss) earnings per share - GAAP$0.44 $(0.33)$0.99 $0.10 $2.13 
Adjustments:
    Effect of mortgage-related revenue— (0.01)— (0.01)— 
    Effect of mortgage-related costs— 0.27 — 0.27 — 
    Effect of partial charge-off of C&I participation loan— 0.60 — 0.61 — 
    Effect of acquisition-related expenses— — 0.01 — 0.02 
    Effect of nonrecurring consulting fee— — — — 0.07 
    Effect of discretionary inflation bonus— — 0.04 — 0.04 
    Effect of accelerated equity compensation— — 0.02 — 0.02 
Adjusted diluted (loss) earnings per share$0.44 $0.53 $1.06 $0.97 $2.28 
Return on average assets0.32 %(0.26 %)0.93 %0.04 %1.01 %
    Effect of mortgage-related revenue0.00 %0.00 %0.00 %0.00 %0.00 %
    Effect of mortgage-related costs0.00 %0.21 %0.00 %0.10 %0.00 %
    Effect of partial charge-off of C&I participation loan0.00 %0.48 %0.00 %0.23 %0.00 %
    Effect of acquisition-related expenses0.00 %0.00 %0.01 %0.00 %0.01 %
    Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.00 %0.03 %
    Effect of discretionary inflation bonus0.00 %0.00 %0.04 %0.00 %0.02 %
    Effect of accelerated equity compensation0.00 %0.00 %0.02 %0.00 %0.01 %
Adjusted return on average assets0.32 %0.43 %1.00 %0.37 %1.08 %
Return on average shareholders' equity4.35 %(3.37 %)10.23 %0.48 %11.09 %
    Effect of mortgage-related revenue0.00 %(0.06 %)0.00 %(0.03 %)0.00 %
    Effect of mortgage-related costs0.00 %2.69 %0.00 %1.35 %0.00 %
    Effect of partial charge-off of C&I participation loan0.00 %6.10 %0.00 %3.05 %0.00 %
    Effect of acquisition-related expenses0.00 %0.00 %0.09 %0.00 %0.12 %
    Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.00 %0.37 %
    Effect of discretionary inflation bonus0.00 %0.00 %0.45 %0.00 %0.22 %
    Effect of accelerated equity compensation0.00 %0.00 %0.24 %0.00 %0.12 %
Adjusted return on average shareholders' equity4.35 %5.36 %11.01 %4.85 %11.92 %
Return on average tangible common equity4.40 %(3.41 %)10.36 %0.49 %11.23 %
    Effect of mortgage-related revenue0.00 %(0.06 %)0.00 %(0.03 %)0.00 %
    Effect of mortgage-related costs0.00 %2.73 %0.00 %1.37 %0.00 %
    Effect of partial charge-off of C&I participation loan0.00 %6.18 %0.00 %3.09 %0.00 %
    Effect of acquisition-related expenses0.00 %0.00 %0.09 %0.00 %0.12 %
    Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.00 %0.37 %
    Effect of discretionary inflation bonus0.00 %0.00 %0.45 %0.00 %0.23 %
    Effect of accelerated equity compensation0.00 %0.00 %0.25 %0.00 %0.12 %
Adjusted return on average tangible common equity4.40 %5.44 %11.15 %4.92 %12.07 %