Shares of First Internet Bancorp (INBK, Financial) fell 3.46% in mid-day trading on Oct 2. The stock reached an intraday low of $32.06, down from its previous close of $33.21. This places INBK 18.75% below its 52-week high of $39.46 and 127.21% above its 52-week low of $14.11. Trading volume was 5,915 shares, 17.3% of the average daily volume of 34,200. Wall Street Analysts Forecast Based on the one-year price targets offered by 5 analysts, the average target price for First Internet Bancorp (INBK, Financia ...

Investors in First Internet Bancorp (INBK) need to pay close attention to the stock based on moves in the options market lately. That is because the Aug 16, 2024 $12.50 Put had some of the highest implied volatility of all equity options today. What is Implied Volatility? Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It cou ...

Financial Data and Key Metrics Changes - The company reported net income of $5.8 million, an increase of 11.5%, and diluted earnings per share of $0.67, up 11.7% from the first quarter [101] - Net interest income for the quarter was $21.3 million, up 2.9% from the first quarter, with a fully taxable equivalent net interest margin increasing by 1 basis point [30][117] - The tangible book value per share increased over 1% during the quarter and is up over 6% year-over-year [6] Business Line Data and Key Metrics Changes - The SBA business saw year-to-date originations up 15% and solid loan volume up 58% compared to the first half of 2023 [4] - Non-interest income for the quarter was $11 million, up 32% from the first quarter, driven by record gains on sale revenue [108] - The construction team originated over $115 million in new commitments, with average construction loan balances up 16% compared to the first quarter [7] Market Data and Key Metrics Changes - Deposits from FinTech partners increased by 34% from the first quarter, totaling $375 million at quarter-end [10] - Average interest-bearing deposits were up over $185 million during the quarter, while average loan balances increased by only $44 million [12] - The company’s exposure to office commercial real estate remains less than 1% of the total loan portfolio [119] Company Strategy and Development Direction - The company is focused on optimizing the loan portfolio and diversifying revenue streams while maintaining deposit costs [3] - FinTech partnerships are seen as vital for developing innovative solutions and enhancing shareholder returns, with total revenue from this line of business up 300% for the first half of 2024 compared to the same period last year [8] - The company aims to achieve annual net interest income growth of 20% for 2024, with loan growth projected between 7.5% to 10% [110] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of net interest income and net interest margin, anticipating a stable environment for deposit costs [13][117] - The company is optimistic about the outlook for the remainder of 2024, citing strong pipelines and a focus on high-quality sales personnel [145] - Management noted that regulatory scrutiny in the fintech space has increased, but the company is well-prepared to navigate these challenges [131] Other Important Information - The allowance for credit losses as a percentage of total loans was 1.10% at the end of the second quarter, reflecting growth in the loan portfolio [62] - The company has reduced its outstanding balances related to Red Lobster by $3 million, with no delinquencies reported [100] - Non-interest expense for the quarter was $22.3 million, up 3.5% from the first quarter, including almost $600,000 of non-recurring expenses [127] Q&A Session Summary Question: How do you view the revenue trajectory for SBA in the second half of the year? - Management indicated that while it may be difficult to replicate the production in Q2, they expect to continue seeing growth in SBA revenue [42] Question: Can you provide insights on the technology contracts mentioned? - Management clarified that the termination of some tech contracts was due to finding better alternatives and does not indicate a reduction in capabilities [24][25] Question: What are the expectations for loan growth in the back half of the year? - Management forecasted loan balances to be up between 7.5% to 10%, with a focus on maintaining a higher level of originations [142]

Financial Performance - Net income reached $5.8 million, with diluted EPS at $0.67, showing increases of 11.5% and 13.6% respectively compared to 1Q24 [6] - Adjusted net income was $6.2 million, a 20.2% increase from 1Q24 [6] - Adjusted diluted EPS increased by 22.0% to $0.72 [6] - Total revenue increased by 11.3% from 1Q24, reaching $32.4 million [6] Loan Portfolio - Total portfolio loan balances increased by 1.3% from 1Q24 [7, 10] - Commercial loan balances increased by $46.9 million, or 1.5%, from 1Q24 [10] - Consumer loan balances increased by $7.0 million, or 0.9%, from 1Q24 [10] - The weighted average yield on new loans funded in 2Q24 was 8.88% [7, 10] Deposits and Liquidity - Total deposits remained stable compared to 1Q24, reaching $4.3 billion as of June 30, 2024, and are up 10.9% from 2Q23 [12] - Cash and unused borrowing capacity totaled $1.7 billion at June 30, 2024 [20] - The loan to deposits ratio is 92.7% [7, 20] Asset Quality and Capital - NPAs to total assets ratio is 0.24% [7] - TCE / TA ratio is 6.88%, and the CET1 ratio is 9.47% [8] - Tangible book value per share increased by 1.3% to $42.37 [8] Net Interest Margin - Net interest margin was 1.67%, and FTE NIM was 1.76%, both improving by 1 bp from 1Q24 [7] - Deposit costs increased 4 bps from 1Q24 to 4.29% for 2Q24 [28] Noninterest Income and Expense - Noninterest income increased by 32.2% to $11.0 million from $8.3 million in 1Q24 [30] - Gain on sale of loans increased by 26.9% to $8.3 million from $6.5 million in 1Q24 [30] - Noninterest expense increased by 6.2% to $22.3 million from $21.0 million in 1Q24 [36]

Core Insights - First Internet Bancorp (INBK) reported revenue of $32.36 million for the quarter ended June 2024, marking a year-over-year increase of 34.7% [5] - The reported revenue exceeded the Zacks Consensus Estimate of $30.55 million, resulting in a surprise of +5.93% [1] - Earnings per share (EPS) for the quarter was $0.72, compared to $0.44 a year ago, indicating significant growth [5] Financial Metrics - Net Interest Margin was reported at 1.7%, matching the average estimate from two analysts [3] - Net Interest Income (FTE) was $22.50 million, slightly below the average estimate of $23.11 million [3] - Total noninterest income reached $11.03 million, surpassing the average estimate of $8.64 million [3] - Net Interest Income was $21.33 million, compared to the average estimate of $21.91 million [3] Stock Performance - Shares of First Internet Bancorp have returned +47.9% over the past month, significantly outperforming the Zacks S&P 500 composite, which changed by +1.8% [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

First Internet Bancorp (INBK) came out with quarterly earnings of $0.72 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.44 per share a year ago. These figures are adjusted for non-recurring items. Over the last four quarters, the company has surpassed consensus EPS estimates two times. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the ear ...

[First Internet Bancorp Q2 2024 Financial Results](index=1&type=section&id=First%20Internet%20Bancorp%20Reports%20Second%20Quarter%202024%20Results) [Second Quarter 2024 Financial Highlights](index=1&type=section&id=Second%20Quarter%202024%20Financial%20Highlights) First Internet Bancorp reported strong upward earnings trajectory in Q2 2024, with net income rising 11.5% to $5.8 million and diluted EPS increasing 13.6% to $0.67 compared to Q1 2024 Q2 2024 Key Financial Metrics (vs. Q1 2024) | Metric | Q2 2024 | Change from Q1 2024 | | :--- | :--- | :--- | | Net Income | $5.8 million | +11.5% | | Adjusted Net Income | $6.2 million | +20.2% | | Diluted EPS | $0.67 | +13.6% | | Adjusted Diluted EPS | $0.72 | +22.0% | | Net Interest Income | $21.3 million | +2.9% | | Net Interest Margin | 1.67% | +1 bp | | Noninterest Income | $11.0 million | +32.2% | | Loan Growth | $51.3 million | +1.3% | | Tangible Book Value per Share | $42.37 | +1.3% | - Chairman and CEO David Becker attributed the strong earnings to an increasingly diversified revenue base, optimization of the loan portfolio, solid loan growth, increasing asset yields, and stabilization of funding costs[3](index=3&type=chunk) - Noninterest income represented nearly **one-third** of total revenues in the first half of 2024, a significant increase from just under **one-quarter** in the same period last year, primarily driven by the SBA business[3](index=3&type=chunk) - Credit quality remained stable with nonperforming loans at **0.33%** of total loans and an allowance for credit losses of **1.10%** of total loans[4](index=4&type=chunk) [Net Interest Income and Net Interest Margin](index=2&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income (NII) rose to $21.3 million in Q2 2024, a 2.9% increase from Q1 2024, while Net Interest Margin (NIM) expanded by 1 basis point to 1.67% Net Interest Income and Margin Performance | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net Interest Income | $21.3 million | $20.7 million | $18.1 million | | FTE Net Interest Income | $22.5 million | $21.9 million | $19.5 million | | Net Interest Margin (NIM) | 1.67% | 1.66% | 1.53% | | FTE NIM | 1.76% | 1.75% | 1.64% | - Total interest income increased **4.1%** QoQ to **$71.0 million**, driven by a **10 bp** increase in loan yields and a **21 bp** increase in securities yields[6](index=6&type=chunk) - Total interest expense rose **4.6%** QoQ to **$49.6 million**, primarily due to a **$186.0 million** increase in average interest-bearing deposit balances, with the cost of these deposits rising **4 bps** to **4.29%**[10](index=10&type=chunk) - The company is strategically shifting its loan mix towards variable rate and higher-yielding products like construction, small business lending, and franchise finance to improve its interest rate risk profile[7](index=7&type=chunk) [Noninterest Income](index=3&type=section&id=Noninterest%20Income) Noninterest income surged to $11.0 million in Q2 2024, a 32.2% increase from Q1 2024 and an 87.2% increase year-over-year, primarily driven by a 26.9% QoQ increase in gain on sale of loans Noninterest Income Breakdown | Category | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | **Total Noninterest Income** | **$11.0 million** | **$8.3 million** | **$5.9 million** | | Gain on sale of loans | $8.3 million | $6.5 million | $4.9 million | - The increase in gain on sale of loans was driven by a **18.9%** rise in loan sale volume and a **6 basis point** increase in net premiums compared to the linked quarter[15](index=15&type=chunk) - Other income increased by **$1.2 million** during the quarter, mainly due to distributions from fund investments[15](index=15&type=chunk) [Noninterest Expense](index=3&type=section&id=Noninterest%20Expense) Noninterest expense for Q2 2024 was $22.3 million, a 6.2% increase from the prior quarter, with adjusted expenses rising 3.5% QoQ after excluding non-recurring IT termination fees Noninterest Expense Overview | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Total Noninterest Expense | $22.3 million | $21.0 million | $18.7 million | | Adjusted Noninterest Expense | $21.8 million | $21.0 million | N/A | - Non-recurring costs in Q2 2024 included almost **$0.6 million** for IT termination fees and anniversary expenses[16](index=16&type=chunk) - The main drivers of the increase in recurring expenses were higher salaries and benefits (**$0.5 million**), consulting fees (**$0.2 million**), and loan expenses (**$0.2 million**)[16](index=16&type=chunk)[17](index=17&type=chunk) [Loans and Credit Quality](index=4&type=section&id=Loans%20and%20Credit%20Quality) Total loans grew by 1.3% QoQ to $4.0 billion, driven by growth in commercial loans, while credit quality remained stable with nonperforming loans at 0.33% and ACL increasing to 1.10% Key Credit Quality Metrics | Metric | June 30, 2024 | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Total Loans | $4.0 billion | $3.9 billion | $3.6 billion | | Nonperforming Loans to Total Loans | 0.33% | 0.33% | 0.17% | | Allowance for Credit Losses (ACL) to Total Loans | 1.10% | 1.05% | 0.99% | | Net Charge-offs to Average Loans (Quarterly) | 0.14% | 0.05% | 0.17% | - Commercial loan balances increased by **$46.9 million** (**1.5%**) QoQ, led by growth in investor commercial real estate, small business lending, and franchise finance[19](index=19&type=chunk) - The provision for credit losses was **$4.0 million** for the quarter, up from **$2.4 million** in Q1 2024, driven by loan growth, net charge-offs, and increased reserves for small business lending[25](index=25&type=chunk)[26](index=26&type=chunk) [Capital](index=5&type=section&id=Capital) Total shareholders' equity increased by 1.4% QoQ to $372.0 million, with tangible book value per share growing to $42.37, and regulatory capital ratios remaining well-capitalized - Tangible book value per share increased to **$42.37** as of June 30, 2024, up from **$41.83** at March 31, 2024, and **$39.85** at June 30, 2023[27](index=27&type=chunk) Regulatory Capital Ratios (Company) - As of June 30, 2024 | Ratio | Value | | :--- | :--- | | Tier 1 leverage ratio | 7.24% | | Common equity tier 1 capital ratio | 9.47% | | Tier 1 capital ratio | 9.47% | | Total risk-based capital ratio | 13.13% | [Financial Statements and Supplementary Data](index=7&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) [Summary Financial Information](index=7&type=section&id=Summary%20Financial%20Information) The summary financial information provides a comparative overview of key performance indicators for Q2 2024, highlighting significant year-over-year growth in net income to $5.8 million and improved performance ratios Performance Ratios | Ratio | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Return on average assets | 0.44% | 0.40% | 0.32% | | Return on average shareholders' equity | 6.28% | 5.64% | 4.35% | | Net interest margin | 1.67% | 1.66% | 1.53% | Asset Quality | Metric | June 30, 2024 | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Nonperforming loans to loans | 0.33% | 0.33% | 0.17% | | Allowance for credit losses to loans | 1.10% | 1.05% | 0.99% | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheet as of June 30, 2024, shows total assets of $5.34 billion, stable QoQ, with net loans increasing to $3.92 billion and total shareholders' equity growing to $372.0 million Key Balance Sheet Items (in thousands) | Item | June 30, 2024 | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Total Assets | $5,343,302 | $5,340,667 | $4,947,049 | | Net Loans | $3,917,741 | $3,868,913 | $3,610,774 | | Total Deposits | $4,273,922 | $4,273,768 | $3,854,308 | | Total Liabilities | $4,971,349 | $4,973,928 | $4,592,717 | | Total Shareholders' Equity | $371,953 | $366,739 | $354,332 | [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement for Q2 2024 shows net interest income of $21.3 million and total noninterest income of $11.0 million, resulting in net income of $5.8 million, or $0.67 per diluted share Income Statement Highlights (Q2 2024) | Item | Amount (in thousands) | | :--- | :--- | | Net Interest Income | $21,327 | | Provision for Credit Losses | $4,031 | | Total Noninterest Income | $11,033 | | Total Noninterest Expense | $22,336 | | Income Before Income Taxes | $5,993 | | **Net Income** | **$5,775** | [Loan and Deposit Composition](index=12&type=section&id=Loan%20and%20Deposit%20Composition) As of June 30, 2024, the $4.0 billion loan portfolio was 79.0% commercial, with the $4.3 billion deposit base led by certificates of deposits (42.8%) and money market accounts (28.6%) - Total commercial loans stood at **$3.1 billion** (**79.0%** of total), while total consumer loans were **$800.5 million** (**20.2%** of total)[42](index=42&type=chunk) - The largest components of the deposit base are Certificates of Deposits (**$1.8 billion** or **42.8%**) and Money Market accounts (**$1.2 billion** or **28.6%**)[42](index=42&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=13&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, with adjusted net income for Q2 2024 at $6.2 million and adjusted diluted EPS at $0.72 GAAP to Non-GAAP Reconciliation (Q2 2024) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Net Income | $5.8 million | $0.5 million | $6.2 million | | Diluted EPS | $0.67 | $0.05 | $0.72 | - Key non-GAAP adjustments for Q2 2024 included **$452 thousand** in IT termination fees and **$120 thousand** in anniversary expenses[44](index=44&type=chunk)

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents First Internet Bancorp's unaudited condensed consolidated financial statements and detailed notes on accounting policies [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The company reported total assets of $5,340.7 million and net income of $5.2 million for Q1 2024, a turnaround from a $3.0 million net loss in Q1 2023 | Financial Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Total Cash and Cash Equivalents | $481.3 million | $405.9 million | | Net Loans | $3,868.9 million | $3,801.4 million | | Total Assets | $5,340.7 million | $5,167.6 million | | **Liabilities & Equity** | | | | Total Deposits | $4,273.8 million | $4,067.0 million | | Total Liabilities | $4,973.9 million | $4,804.8 million | | Total Shareholders' Equity | $366.7 million | $362.8 million | | Income Statement Item | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net Interest Income | $20.7 million | $19.6 million | | Provision for Credit Losses | $2.5 million | $9.4 million | | Noninterest Income | $8.3 million | $5.4 million | | Noninterest Expense | $21.0 million | $21.0 million | | **Net Income (Loss)** | **$5.2 million** | **($3.0 million)** | | **Diluted EPS** | **$0.59** | **($0.33)** | - Net cash provided by financing activities was **$165.8 million**, driven by a **$206.8 million** increase in deposits, partially offset by **$40.0 million** in FHLB repayments, while net cash used in investing activities was **$93.3 million**[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, securities and loan portfolio composition, credit loss allowance, subordinated debt, and fair value measurements | Security Type | Amortized Cost (Mar 31, 2024) | Fair Value (Mar 31, 2024) | | :--- | :--- | :--- | | **Available-for-Sale** | **$523.0M** | **$482.4M** | | Agency mortgage-backed securities - residential | $253.2M | $220.5M | | U.S. Government-sponsored agencies | $93.3M | $92.1M | | **Held-to-Maturity** | **$236.0M** | **$214.2M** | | Agency mortgage-backed securities - residential | $178.8M | $161.9M | | Loan Category | Balance (Mar 31, 2024) | Balance (Dec 31, 2023) | | :--- | :--- | :--- | | **Total Commercial Loans** | **$3,081.1M** | **$3,005.9M** | | Single tenant lease financing | $941.6M | $936.6M | | Franchise finance | $543.1M | $525.8M | | Public finance | $498.3M | $521.8M | | **Total Consumer Loans** | **$793.4M** | **$796.9M** | | Residential mortgage | $390.0M | $395.6M | | Other consumer loans | $380.7M | $377.6M | | **Total Loans** | **$3,909.8M** | **$3,840.2M** | - The Allowance for Credit Losses (ACL) increased to **$40.9 million** from **$38.8 million**, with a Q1 2024 provision of **$2.6 million** and net charge-offs of **$0.5 million**[72](index=72&type=chunk) - The company had **$107.0 million** in subordinated debt outstanding as of March 31, 2024, qualifying as Tier 2 capital[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial performance, highlighting a significant increase in net income driven by reduced credit loss provision and higher noninterest income, covering financial condition, asset quality, and capital [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Net income for Q1 2024 was $5.2 million, a significant improvement from a prior-year loss, driven by reduced credit loss provision and increased noninterest income, despite NIM compression | Performance Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income (Loss) | $5.2 million | ($3.0 million) | | Diluted EPS | $0.59 | ($0.33) | | Return on Average Assets (ROAA) | 0.40% | (0.26%) | | Return on Average Shareholders' Equity (ROAE) | 5.64% | (3.37%) | - Q1 2023 results were impacted by a **$6.9 million** C&I loan charge-off and **$3.1 million** in mortgage business exit costs; adjusted net income for Q1 2023 would have been **$4.8 million**[203](index=203&type=chunk) - Noninterest income increased **53.3%** year-over-year to **$8.3 million** in Q1 2024, primarily due to a **$2.5 million** (60.9%) increase in gain on sale of loans from higher SBA 7(a) loan sales[214](index=214&type=chunk) - Noninterest expense remained flat at **$21.0 million** year-over-year, with a **$0.6 million** increase in deposit insurance premium offset by a **$0.5 million** decrease in loan expenses[216](index=216&type=chunk) [Financial Condition](index=51&type=section&id=Financial%20Condition) Total assets grew by $173.1 million to $5,340.7 million, funded by a $206.8 million increase in deposits, with total loans rising to $3,909.8 million and tangible book value per share increasing to $41.83 | Balance Sheet Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $5,340.7M | $5,167.6M | | Total Loans | $3,909.8M | $3,840.2M | | Total Deposits | $4,273.8M | $4,067.0M | | Total Shareholders' Equity | $366.7M | $362.8M | - Book value per common share increased to **$42.37** and tangible book value per share increased to **$41.83** as of March 31, 2024[223](index=223&type=chunk) [Asset Quality](index=53&type=section&id=Asset%20Quality) Asset quality deteriorated with nonperforming loans increasing to $13.1 million (0.33% of total loans), and the allowance for credit losses (ACL) rising to $40.9 million (1.05% of total loans) | Asset Quality Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Nonperforming Loans | $13.1M | $10.0M | | Total Nonperforming Assets | $13.4M | $10.4M | | Nonperforming Loans to Total Loans | 0.33% | 0.26% | | Allowance for Credit Losses (ACL) | $40.9M | $38.8M | | ACL to Total Loans | 1.05% | 1.01% | - Net charge-offs for Q1 2024 were **$0.5 million** (0.05% of average loans), a significant decrease from **$7.2 million** (0.82% of average loans) in Q1 2023[231](index=231&type=chunk)[232](index=232&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $1.7 billion in available sources and all regulatory capital ratios well above 'well-capitalized' thresholds, continuing its stock repurchase program | Regulatory Capital Ratios (Consolidated) | March 31, 2024 | Minimum Required (w/ buffer) | | :--- | :--- | :--- | | Common Equity Tier 1 Capital Ratio | 9.52% | 7.00% | | Tier 1 Capital Ratio | 9.52% | 8.50% | | Total Capital Ratio | 13.18% | 10.50% | | Leverage Ratio | 7.33% | 4.00% | - As of March 31, 2024, the Bank had the ability to borrow an additional **$1.3 billion** from the FHLB, Federal Reserve, and correspondent banks[257](index=257&type=chunk) - The company repurchased **10,500 shares** of common stock in Q1 2024 at an average price of **$26.94** per share, with approximately **$14.3 million** remaining for repurchase under the current program[254](index=254&type=chunk)[282](index=282&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, monitored via NII and EVE sensitivity, with the balance sheet positioned to benefit from rate decreases and negatively impacted by increases | Instantaneous Parallel Rate Shock | % Change in NII (Year 1) | % Change in EVE | | :--- | :--- | :--- | | +100 bps | (7.0%) | (15.0%) | | +50 bps | (4.0%) | (7.6%) | | -100 bps | +10.5% | +17.3% | | -200 bps | +18.6% | +30.4% | [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - The company's management concluded that disclosure controls and procedures were effective as of March 31, 2024[274](index=274&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2024[275](index=275&type=chunk) [PART II OTHER INFORMATION](index=66&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, and details on unregistered sales of equity securities and use of proceeds [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company and its subsidiaries are not party to any material legal proceedings, with the Bank occasionally involved in routine legal actions - There are no material legal proceedings against the company or its subsidiaries[278](index=278&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have been reported since the Annual Report on Form 10-K for December 31, 2023 - No material changes to risk factors were reported since the last Annual Report on Form 10-K[279](index=279&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchase activity, including 10,500 shares bought in Q1 2024, with $14.3 million remaining under the current program | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2024 | 10,500 | $26.94 | | Feb 1 - Feb 29, 2024 | 0 | $0.00 | | Mar 1 - Mar 31, 2024 | 0 | $0.00 | | **Total Q1 2024** | **10,500** | **$26.94** | - As of March 31, 2024, approximately **$14.3 million** remained available for repurchase under the existing stock repurchase program[282](index=282&type=chunk)

Financial Data and Key Metrics Changes - Net interest income for the quarter was $20.7 million, up 4.7% from the previous quarter, and fully taxable equivalent net interest margin expanded by 7 basis points [39][87] - The yield on average interest-earning assets increased to 5.45% from 5.28%, primarily due to a 23-basis point increase in the yield earned on loans [39][87] - Non-performing loans increased to 33 basis points of total loans, while net charge-offs remained low at just five basis points [88][131] Business Line Data and Key Metrics Changes - The loan portfolio grew by $70 million or over 7% on an annualized basis, with significant contributions from commercial lending, construction, and small business lending [99][132] - SBA originations and sold loan volume were up 27% and 55% respectively compared to the previous year, indicating strong performance in the SBA segment [100] - Non-interest income for the quarter was $8.3 million, up $900,000 from the previous quarter, with gain on sale of loans totaling $6.5 million, setting a quarterly record for the SBA team [106] Market Data and Key Metrics Changes - Deposit balances grew by $206.8 million or 5.1% from the prior quarter, driven by strong demand across the customer base [9] - Uninsured deposit balances were $1.1 billion or 26% of total deposits, up $76 million from the end of the fourth quarter [9] - The loans to deposits ratio declined to 91.5% from 94.4% at the end of 2023, reflecting strong deposit growth outpacing loan growth [105] Company Strategy and Development Direction - The company aims to optimize the loan portfolio and balance sheet mix while managing deposit costs and improving interest rate risk profile [4][5] - There is a focus on enhancing FinTech partnerships, with expectations for FinTech partnership revenue to be about three times last year's revenue [72][102] - The company is committed to maintaining high liquidity levels and is positioned to capitalize on opportunities arising from market volatility [71][120] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of net interest income and net interest margin, expecting them to trend higher for the remainder of the year [5][41] - The company anticipates annual earnings per share for 2024 to be in the range of $3 per share, with loan yields expected to continue increasing [41][95] - Management noted that credit quality remains healthy, with minimal exposure to office real estate, which is a concern in the current market [131] Other Important Information - The tangible book value per share was $41.83, up 1% from the fourth quarter and nearly 7% year over year [41] - The common equity tier one capital ratio remains solid at 9.52%, indicating strong capital levels [41][131] - The company has been recognized for its operational discipline and prudent balance sheet management during challenging periods for the banking industry [6] Q&A Session Summary Question: Impact of potential rate cuts on NII and NIM - Management indicated that a 25-basis point rate cut could reduce net interest income by approximately $1 million on an annualized basis [14] Question: FinTech partner pipeline and growth expectations - Management noted a strong pipeline with expectations for revenue growth, but cautioned against expecting the same growth rate as the previous quarter [24][72] Question: Loan growth expectations and deposit growth consistency - Management expects loan growth to be in the range of 5% to 10% for the year, with deposit growth anticipated to keep pace with loan growth [58][126] Question: Tax rate expectations - The effective tax rate for the quarter was 7.5%, with expectations to rise to 10% to 12% in the future as income grows [129] Question: SBA performance and risk management - Management emphasized strong credit underwriting standards in the SBA segment, maintaining a low risk profile compared to industry standards [48][116]

First Internet Bancorp (INBK) reported $29.08 million in revenue for the quarter ended March 2024, representing a year-over-year increase of 16.2%. EPS of $0.59 for the same period compares to $0.53 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $28.6 million, representing a surprise of +1.68%. The company delivered an EPS surprise of +7.27%, with the consensus EPS estimate being $0.55.While investors scrutinize revenue and earnings changes year-over-year and how they compare wi ...