First Internet Bancorp(INBK) - 2024 Q3 - Quarterly Report

Financial Performance - For the third quarter 2024, net income was $7.0 million, or$ 0.80 diluted earnings per share, representing an increase of 105.0% in net income compared to $3.4 million, or$ 0.39 diluted earnings per share in the third quarter 2023[232]. - During the nine months ended September 30, 2024, net income was $17.9 million, or$ 2.05 diluted earnings per share, an increase of 319.9% compared to $4.3 million, or$ 0.48 per diluted share in the same period of 2023[232]. - The increase in net income for the third quarter 2024 was primarily due to a $4.6 million, or 62.4%, increase in noninterest income and a$ 4.4 million, or 25.2%, increase in net interest income[233]. - The Company recognized $0.5 million in IT termination fees and$ 0.1 million in anniversary expenses during the nine months ended September 30, 2024, leading to an adjusted net income of $18.4 million[236]. - Adjusted net income for the nine months ended September 30, 2023, excluding the impact of exiting consumer mortgage, was$ 12.1 million, with adjusted diluted earnings per share of $1.35[239]. - Net income for September 30, 2024, was$ 6,990,000, an increase of 21.5% from $5,775,000 in June 2024[327]. - Adjusted diluted earnings per share for September 30, 2024, was$ 0.80, up from $0.72 in June 2024, reflecting a growth of 11.1%[327]. Assets and Liabilities - As of September 30, 2024, the Company had consolidated assets of$ 5.8 billion, consolidated deposits of $4.8 billion, and stockholders' equity of$ 385.1 million[230]. - Total assets reached $5,523,910 as of September 30, 2024, compared to$ 5,332,776 in the previous quarter[242]. - Total liabilities were $5,143,849 as of September 30, 2024, compared to$ 4,962,951 in the previous quarter[242]. - Shareholders' equity totaled $380,061 as of September 30, 2024, compared to$ 369,825 in the previous quarter[242]. - Total assets as of September 30, 2024, were $5,823,259,000, an increase from$ 5,169,023,000 as of September 30, 2023, representing a growth of 12.6%[323]. - Tangible common equity as of September 30, 2024, was $380,442,000, up from$ 343,057,000 a year earlier, marking an increase of 10.9%[323]. Income and Expenses - Total interest income for Q3 2024 increased by $12.0 million, or 19.0%, to$ 75.0 million from $63.0 million in Q3 2023[248]. - Total interest expense for Q3 2024 rose by$ 7.6 million, or 16.6%, to $53.2 million from$ 45.6 million in Q3 2023[248]. - Total noninterest expense for Q3 2024 was $22.8 million, up 15.4% from$ 19.8 million in Q3 2023, mainly due to higher salaries and employee benefits[265]. - Noninterest income for Q3 2024 was $12.0 million, a 62.4% increase from$ 7.4 million in Q3 2023, primarily driven by gains on loan sales[260]. - The increase in salaries and employee benefits for Q3 2024 was primarily due to higher small business lending incentive compensation and staff additions[265]. - Noninterest expense for the three months ended September 30, 2024, was $22,794,000, a rise of 15.4% from$ 19,756,000 in the same quarter of 2023[326]. Loans and Credit Quality - Loans increased to $4.0 billion as of September 30, 2024, compared to$ 3.7 billion as of September 30, 2023[269]. - Total nonperforming loans increased by $12.5 million, or 125.6%, to$ 22.5 million as of September 30, 2024, compared to $10.0 million as of December 31, 2023[282]. - The allowance for credit losses - loans to total loans ratio was 1.13% as of September 30, 2024, up from 1.10% in the previous quarter[281]. - The total nonperforming loans to total loans ratio increased to 0.56% as of September 30, 2024, compared to 0.33% in the previous quarter[281]. - The company experienced a slight decrease in public finance and single tenant lease financing portfolios, along with continued runoff in the healthcare finance portfolio[277]. - The company experienced a partial charge-off of C&I participation loans amounting to$ 5,462,000[327]. Deposits and Funding - Total deposits increased by $730.7 million, or 18.0%, to$ 4.8 billion as of September 30, 2024, compared to $4.1 billion as of December 31, 2023[299]. - Certificates of deposits rose by$ 505.5 million, or 31.5%, driven by strong consumer and small business demand throughout 2024[299]. - Interest-bearing demand deposits increased by $135.5 million, or 33.6%, primarily from growth in fintech partnership deposits[299]. - The Company maintained a Common Equity Tier 1 capital ratio of 9.37% as of September 30, 2024, exceeding the minimum required ratio of 7.00%[307]. - The company can borrow an additional$ 1.4 billion from various funding sources, totaling $2.1 billion in liquidity, which is 230% of adjusted uninsured deposit balances[317]. Capital and Shareholder Returns - The company declared a cash dividend of$ 0.06 per share, payable on October 15, 2024, to shareholders of record as of September 30, 2024[310]. - The company repurchased 559,522 shares of common stock at an average price of $19.06, totaling an investment of$ 10.7 million under a $25.0 million stock repurchase program[313]. - The total capital to risk-weighted assets ratio for the consolidated entity was 13.23%, well above the minimum required ratio of 10.50%[309]. - The leverage ratio for the consolidated entity was 7.33%, significantly higher than the minimum requirement of 4.00%[309]. Future Outlook and Strategy - Future outlook includes continued focus on revenue growth and cost management strategies to enhance profitability[326]. - The company believes it has sufficient liquidity and capital resources to meet its cash and capital expenditure requirements for the next twelve months[312].