First Internet Bancorp(US:INBK)2021-04-23 05:49Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $1.05, down 6% from the previous quarter but up 69% from Q1 2020 [21] - Net interest margin increased by 27 basis points sequentially to 2.18%, with a return on average assets of 1.02% for the second consecutive quarter [21] - Revenue for Q1 totaled $28.9 million, up 36% from Q1 2020, reflecting a diversified revenue stream [10] Business Line Data and Key Metrics Changes - Total portfolio loans at the end of Q1 were $3.1 billion, a 5.8% increase compared to Q1 2020 [23] - Noninterest income for the quarter was $8.4 million, down from $12.7 million in the previous quarter, primarily due to lower mortgage banking revenues [29] - The direct-to-consumer mortgage business continued to perform well, driven by low interest rates and a strong housing market [12] Market Data and Key Metrics Changes - The SBA 7(a) loan activity began to pick up in March, with a target of $200 million-plus in originations for 2021 [11] - The company maintained a competitive position in the SBA market despite a slower start to the year [11] - Nonperforming loans to total loans were 0.46%, indicating strong credit quality [32] Company Strategy and Development Direction - The company aims to scale its SBA business and explore innovative, technology-driven partnerships to enhance existing lines of business [15] - There is a focus on improving efficiency while enhancing customer experience for both existing and prospective clients [15] - The company is developing an ESG strategy to support community initiatives and diversity, equity, and inclusion [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position and growth potential as the economy recovers from the pandemic [18] - The company anticipates continued improvement in net interest margin and expects to maintain a return on assets above 1% throughout 2021 [35] - Management noted that the availability of housing is a significant factor affecting the mortgage market [39] Other Important Information - The company made a $250,000 contribution to a local foundation supporting community initiatives during Q1 [17] - The tangible common equity to tangible assets ratio increased by 43 basis points to 8.12% [33] Q&A Session Summary Question: Outlook for the mortgage business - Management expects the second and third quarters to be stronger, with a focus on housing supply impacting the market [39] Question: Tax rate outlook - The tax rate is expected to remain in the 15% to 17% range moving forward [40] Question: Net interest margin and ROA guidance - Management anticipates a net interest margin of around 2.40% by the end of the year, with a 5 to 10 basis point increase quarterly [44] Question: Capital deployment strategy - The company is looking for opportunities to deploy excess capital, with a focus on balance sheet growth [48] Question: SBA business growth - Management aims to become a top 10 producer of SBA 7(a) loans, targeting $200 million in originations for 2021 [66] Question: Fintech partnerships - The company is exploring partnerships with fintechs to enhance services and improve valuation [78]