First Internet Bancorp Reports First Quarter 2020 Results
First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the first quarter of 2020. Net income for the first quarter of 2020 was $6.0 million, or $0.62 diluted earnings per share. This compares to net income of $7.1 million, or $0.72 diluted earnings per share, for the fourth quarter of 2019, and net income of $5.7 million, or $0.56 diluted earnings per share, for the first quarter of 2019.
“The current public health crisis confronting our country has required a dramatic shift in our operations as well as in those of our customers,” said David Becker, Chairman, President and Chief Executive Officer. “Our most important priority in this unprecedented environment is the health of our team, customers and shareholders.
“While the duration of the coronavirus pandemic still remains unknown, we have the financial strength to serve our valued customers throughout this difficult period.
“We have proactively implemented a payment deferral program that allows impacted clients to preserve cash and liquidity. Additionally, our lending teams have been enrolling small business clients in the SBA Paycheck Protection Program, which will provide much needed capital and liquidity to many of our small business entrepreneurs. As of April 16, we had received approvals from the SBA for 268 loans totaling $45.0 million. This was accomplished in 10 days through an all-hands-on-deck effort by the First Internet team, who have been working tirelessly for our customers.
Chairman Becker added, “I am pleased with our first quarter financial performance as well as our efforts to date in April. I thank the entire First Internet team for their resilience and dedication during these challenging times. The high level of engagement throughout the organization remains the key to our ongoing success.”
Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2020 was $15.0 million, compared to $15.4 million for the fourth quarter of 2019 and $16.2 million for the first quarter of 2019. On a fully-taxable equivalent basis, net interest income for the first quarter was $16.6 million, compared to $17.0 million for the fourth quarter of 2019 and $17.8 million for the first quarter of 2019.
Total interest income for the first quarter of 2020 was $36.2 million, a decrease of 4.3%, compared to the fourth quarter of 2019, and an increase of 3.6% compared to the first quarter of 2019. On a fully-taxable equivalent basis, total interest income for the first quarter was $37.8 million, a decrease of 4.3% compared to the fourth quarter of 2019, and an increase of 3.4% compared to the first quarter of 2019. The decline in total interest income compared to the fourth quarter of 2019 was driven primarily by an 11 basis point (“bp”) decrease in the yield on average interest-earning assets, as the average balance of those assets was down slightly quarter-over-quarter. The yield on interest-earning assets for the first quarter of 2020 declined to 3.62% from 3.73% in the prior quarter due primarily to the decline in short term rates during the quarter following the Federal Reserve rate cut in the fourth quarter of 2019 and additional rate cuts during the first quarter of 2020, which negatively impacted the yields earned on variable rate loans and securities as well as cash balances, which remained elevated throughout the quarter.
Total interest expense for the first quarter of 2020 was $21.2 million, a decrease of 5.7% compared to the fourth quarter of 2019, and an increase of 13.2% compared to the first quarter of 2019. The decrease in interest expense compared to the linked quarter was due mainly to a decline of 11 bps in the cost of interest-bearing deposits and a decrease of $21.5 million, or 0.6%, in the average balance of these deposits. The decrease in average interest-bearing deposit balances was due primarily to a $132.1 million, or 6.0%, decrease in the average balance of certificates and brokered deposits but was partially offset by a $113.7 million, or 15.1%, increase in the average balance of money market accounts. The decrease in deposit costs reflects a decline in the rates paid on money market accounts and certificates and brokered deposits as well as a shift in the deposit mix due to the growth in money market accounts. During the first quarter of 2020, the cost of money market deposits decreased by 18 bps and the cost of certificates and brokered deposits decreased 4 bps as rates paid on new production and renewals were below the rates paid on maturing time deposits.
Net interest margin (“NIM”) was 1.50% for the first quarter of 2020, compared to 1.51% for the fourth quarter of 2019 and 1.86% for the first quarter of 2019. On a fully-taxable equivalent basis, NIM decreased 2 bps to 1.65% for the first quarter of 2020, from 1.67% for the fourth quarter of 2019, and was down from 2.04% for the first quarter of 2019. The decrease in fully-taxable equivalent NIM compared to the linked quarter was due mainly to the decline in loan yields, which had a negative impact of 7 bps, and the lower yields earned on elevated cash balances, which had a negative impact of 5 bps. Additionally, other interest-earning assets and other interest-bearing liabilities had a combined negative impact of 2 bps. These were partially offset by deposit costs and the securities portfolio, which had a positive impact of 9 bps and 3 bps, respectively.
Noninterest Income
Noninterest income for the first quarter of 2020 was $6.2 million, up from $5.4 million for the fourth quarter of 2019, and up from $2.4 million for the first quarter of 2019. The increase compared to the fourth quarter of 2019 was driven primarily by an increase in revenue from mortgage banking activities, the gain on sale of loans sold during the quarter and loan servicing revenue, but partially offset by a decrease in the valuation of the servicing asset. The increase in mortgage banking revenue of $0.7 million, or 24.2%, was due mainly to an increase in origination volumes as mortgage interest rates continued to decline during the quarter. During the first quarter of 2020, the Company sold $99.9 million of public finance, single tenant lease financing and U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans at premiums to book value. The Company also sold $90.8 million of portfolio residential mortgage loans, which included seasoned lower-yielding loans, at a modest discount to book value. Related to the increase in loan servicing revenue, the Company earned a full quarter’s worth of revenue from the SBA servicing portfolio acquired during the fourth quarter of 2019, which was partially offset by the loan servicing asset revaluation recognized during the quarter.
Noninterest Expense
Noninterest expense for the first quarter of 2020 was $13.5 million, compared to $12.6 million for the fourth quarter of 2019 and $11.1 million for the first quarter of 2019. The increase from the fourth quarter of 2019 was due primarily to a $0.6 million increase in salaries and employee benefits and a $0.3 million increase in loan expenses, but partially offset by a $0.1 million decrease in deposit insurance premium. The increase of $0.6 million in salaries and employee benefits was due mainly to seasonal resets of employee benefits and incentive compensation accruals, an increase in headcount which includes a full quarter’s impact of personnel growth in the Company’s small business lending platform and higher mortgage incentive compensation. The increase of $0.3 million in loan expenses was driven primarily by costs associated with nonperforming loans. The decline in deposit insurance premium was due primarily to a decline in the Bank’s one-year asset growth rate which is a component of the formula used to determine the premium amount.
Income Taxes
The Company reported income tax expense of $0.3 million for the first quarter of 2020 and an effective tax rate of 4.2%, compared to income tax expense of $0.6 million and an effective tax rate of 7.8% for the fourth quarter of 2019 and income tax expense of $0.5 million and an effective tax rate of 8.5% for the first quarter of 2019. Compared to the linked quarter, the decline in income tax expense and the effective tax rate was primarily due to a tax law change associated with the Coronavirus Aid, Relief and Economic Security (“CARES”) Act that now allows recognition of certain prior period net operating losses, partially offset by tax expense associated with the annual vesting of equity compensation.
Loans and Credit Quality
Total loans as of March 31, 2020 were $2.9 billion, a decrease of $71.5 million, or 2.4%, compared to December 31, 2019 and an increase of $52.2 million, or 1.8%, compared to March 31, 2019. Total commercial loan balances were $2.3 billion as of March 31, 2020, consistent with December 31, 2019 and an increase of $190.9 million, or 9.1%, compared to March 31, 2019. Compared to the linked quarter, production in healthcare finance, small business lending and construction was offset by lower balances in the single tenant lease financing and public finance loan portfolios due primarily to sales of $94.4 million of loans in these categories during the quarter.
Total consumer loan balances were $539.2 million as of March 31, 2020, a decrease of $94.3 million, or 14.9%, compared to December 31, 2019 and a decrease of $178.7 million, or 24.9%, compared to March 31, 2019. The decline in consumer loan balances from December 31, 2019 was due primarily to the sale of $90.8 million of portfolio residential mortgage loans, which included seasoned lower-yielding loans.
Total delinquencies 30 days or more past due increased to 0.32% of total loans as of March 31, 2020, up from 0.24% as of December 31, 2019 and 0.18% as of March 31, 2019. The increase in delinquencies compared to the linked quarter was due primarily to a residential mortgage loan with a balance of $0.9 million and a commercial real estate loan with a balance of $0.7 million becoming past due. Overall credit quality remained relatively stable as nonperforming loans to total loans was 0.26% as of March 31, 2020, compared to 0.23% at December 31, 2019 and 0.12% as of March 31, 2019.
The allowance for loan losses as a percentage of total loans was 0.79% as of March 31, 2020, compared to 0.74% as of December 31, 2019 and 0.66% as of March 31, 2019. While total loan balances declined $71.5 million, or 2.4%, compared to the linked quarter, the Company made adjustments to qualitative factors related to economic conditions in its allowance model to reflect the economic uncertainty resulting from the COVID-19 pandemic crisis. As a result, both the amount of the allowance for loan losses and the allowance as a percentage of total loans increased compared to December 31, 2019.
Net charge-offs of $0.4 million were recognized during the first quarter of 2020, resulting in net charge-offs to average loans of 0.06%, compared to 0.04% for the fourth quarter of 2019 and 0.05% for the first quarter of 2019. The provision for loan losses in the first quarter of 2020 was $1.5 million, compared to $0.5 million for the fourth quarter of 2019 and $1.3 million for the first quarter of 2019. The increase of $1.0 million, or 212.2%, compared to the linked quarter was due primarily to the adjustments to the economic qualitative factors in the allowance model discussed above.
Capital
As of March 31, 2020, total shareholders’ equity was $305.1 million, an increase of $0.2 million, or 0.1%, compared to December 31, 2019, primarily due to the net income earned during the quarter, partially offset by an increase in accumulated other comprehensive loss due to the net impact of fair value adjustments to the securities portfolio and interest rate swaps designated as cash flow hedges used for long term funding purposes. As a result of the COVID-19 pandemic crisis, the fixed income and interest rate markets experienced a significant level of volatility during March 2020 which negatively impacted the fair values of these financial instruments. Book value per common share decreased slightly to $31.13 as of March 31, 2020, down from $31.30 as of December 31, 2019 and up from $29.03 as of March 31, 2019. Tangible book value per share at March 31, 2020 was $30.65, down from $30.82 and up from $28.57, each as of the same reference dates.
The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of March 31, 2020.
As of March 31, 2020
Company
Bank
Total shareholders' equity to assets
7.32%
8.03%
Tangible common equity to tangible assets 1
7.22%
7.93%
Tier 1 leverage ratio 2
7.82%
8.54%
Common equity tier 1 capital ratio 2
10.78%
11.79%
Tier 1 capital ratio 2
10.78%
11.79%
Total risk-based capital ratio 2
13.90%
12.56%
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 12:00 p.m. Eastern Time on Thursday, April 23, 2020 to discuss its quarterly financial results. The call can be accessed via telephone at (888) 348-3664. A recorded replay can be accessed through May 23, 2020 by dialing (877) 344-7529; passcode: 10142059.
Additionally, interested parties can listen to a live webcast of the call on 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 $4.2 billion as of March 31, 2020. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. The Bank provides consumer and small business deposit, consumer loan, residential mortgage, and specialty finance services nationally as well as commercial real estate loans, commercial and industrial loans, SBA financing and treasury management services in select geographies. 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 the Bank, including its products and services, is available at www.firstib.com.
Forward-Looking Statements
This press release may contain forward-looking statements with respect to the financial condition, results of operations, trends in lending policies, timing of pending acquisitions, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “will,” “would” 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. The COVID-19 pandemic crisis is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects remains uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. 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 real estate, commercial and industrial, public finance, SBA and healthcare finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; fluctuations in interest rates; general economic conditions; risks relating to the regulation of financial institutions; failure to close any pending acquisitions; failure to satisfy or waive closing condition; 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, return on average tangible common equity, total interest income – FTE, net interest income – FTE, and net interest margin – FTE, 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 dataThree Months Ended
March 31,
December 31,
March 31,
2020
2019
2019
Net income$
6,019
$
7,096
$
5,696
Per share and share information Earnings per share - basic$
0.62
$
0.72
$
0.56
Earnings per share - diluted
0.62
0.72
0.56
Dividends declared per share
0.06
0.06
0.06
Book value per common share
31.13
31.30
29.03
Tangible book value per common share 1
30.65
30.82
28.57
Common shares outstanding
9,801,825
9,741,800
10,128,587
Average common shares outstanding: Basic
9,721,485
9,825,784
10,217,637
Diluted
9,750,528
9,843,829
10,230,531
Performance ratios Return on average assets
0.59%
0.69%
0.64%
Return on average shareholders' equity
7.78%
9.46%
7.91%
Return on average tangible common equity 1
7.90%
9.61%
8.04%
Net interest margin
1.50%
1.51%
1.86%
Net interest margin - FTE 1,2
1.65%
1.67%
2.04%
Capital ratios 3 Total shareholders' equity to assets
7.32%
7.44%
8.01%
Tangible common equity to tangible assets 1
7.22%
7.33%
7.89%
Tier 1 leverage ratio
7.82%
7.64%
8.34%
Common equity tier 1 capital ratio10.78%
10.84%
11.66%
Tier 1 capital ratio10.78%
10.84%
11.66%
Total risk-based capital ratio13.90%
13.99%
13.68%
Asset quality Nonperforming loans$
7,443
$
6,732
$
3,432
Nonperforming assets
9,622
8,872
6,071
Nonperforming loans to loans
0.26%
0.23%
0.12%
Nonperforming assets to total assets
0.23%
0.22%
0.17%
Allowance for loan losses to: Loans
0.79%
0.74%
0.66%
Nonperforming loans
307.1%
324.4%
549.0%
Net charge-offs to average loans
0.06%
0.04%
0.05%
Average balance sheet information Loans$
2,931,108
$
2,936,144
$
2,760,164
Total securities
630,879
597,049
523,265
Other earning assets
415,927
452,945
246,732
Total interest-earning assets
4,024,800
4,031,327
3,544,849
Total assets
4,099,932
4,108,216
3,627,508
Noninterest-bearing deposits
60,456
49,570
42,551
Interest-bearing deposits
3,089,045
3,110,501
2,728,674
Total deposits
3,149,501
3,160,071
2,771,225
Shareholders' equity
311,005
297,623
291,883
1
Refer to "Non-GAAP Financial Measures" section above and "Reconciliation of Non-GAAP Financial Measures" below2
On a fully-taxable equivalent ("FTE") basis assuming a 21% tax rate3
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, 2019) Amounts in thousandsMarch 31,
December 31,
March 31,
2020
2019
2019
Assets Cash and due from banks$
5,726
$
5,061
$
5,708
Interest-bearing deposits
345,542
322,300
124,786
Securities available-for-sale, at fair value
608,682
540,852
520,382
Securities held-to-maturity, at amortized cost
66,331
61,878
31,222
Loans held-for-sale
52,394
56,097
13,706
Loans
2,892,093
2,963,547
2,839,928
Allowance for loan losses
(22,857
)
(21,840
)
(18,841
)
Net loans
2,869,236
2,941,707
2,821,087
Accrued interest receivable
16,960
18,607
17,217
Federal Home Loan Bank of Indianapolis stock
25,650
25,650
23,625
Cash surrender value of bank-owned life insurance
37,238
37,002
36,293
Premises and equipment, net
18,883
14,630
13,737
Goodwill
4,687
4,687
4,687
Servicing asset
2,415
2,481
-
Other real estate owned
2,065
2,065
2,619
Accrued income and other assets
112,337
67,066
55,107
Total assets
$
4,168,146
$
4,100,083
$
3,670,176
Liabilities Noninterest-bearing deposits
$
70,562
$
57,115
$
45,878
Interest-bearing deposits
3,107,944
3,096,848
2,765,230
Total deposits
3,178,506
3,153,963
2,811,108
Advances from Federal Home Loan Bank
514,911
514,910
495,146
Subordinated debt
69,605
69,528
33,911
Accrued interest payable
3,293
3,767
1,549
Accrued expenses and other liabilities
96,704
53,002
34,449
Total liabilities
3,863,019
3,795,170
3,376,163
Shareholders' equity
Voting common stock
219,893
219,423
226,235
Retained earnings
105,100
99,681
81,946
Accumulated other comprehensive loss
(19,866
)
(14,191
)
(14,168
)
Total shareholders' equity
305,127
304,913
294,013
Total liabilities and shareholders' equity
$
4,168,146
$
4,100,083
$
3,670,176
First Internet Bancorp Condensed Consolidated Statements of Income (unaudited) Amounts in thousands, except per share data
Three Months Ended
March 31,
December 31,
March 31,
2020
2019
2019
Interest income Loans$
30,408
$
31,574
$
29,218
Securities - taxable
3,619
3,475
3,324
Securities - non-taxable
572
604
684
Other earning assets
1,645
2,224
1,773
Total interest income
36,244
37,877
34,999
Interest expense Deposits
17,208
18,417
15,386
Other borrowed funds
4,018
4,086
3,369
Total interest expense
21,226
22,503
18,755
Net interest income
15,018
15,374
16,244
Provision for loan losses
1,461
468
1,285
Net interest income after provision for loan losses
13,557
14,906
14,959
Noninterest income Service charges and fees
212
213
236
Loan servicing revenue
251
166
-
Loan servicing asset revaluation
(179
)
-
-
Mortgage banking activities
3,668
2,953
1,617
Gain (loss) on sale of loans
1,801
1,721
(104
)
Gain on sale of securities
41
-
-
Other
417
352
623
Total noninterest income
6,211
5,405
2,372
Noninterest expense Salaries and employee benefits
7,774
7,168
6,321
Marketing, advertising and promotion
375
409
469
Consulting and professional fees
1,177
1,242
814
Data processing
375
312
317
Loan expenses
599
289
314
Premises and equipment
1,625
1,556
1,500
Deposit insurance premium
485
601
555
Other
1,076
1,036
819
Total noninterest expense
13,486
12,613
11,109
Income before income taxes
6,282
7,698
6,222
Income tax provision
263
602
526
Net income
$
6,019
$
7,096
$
5,696
Per common share data Earnings per share - basic
$
0.62
$
0.72
$
0.56
Earnings per share - diluted
$
0.62
$
0.72
$
0.56
Dividends declared per share
$
0.06
$
0.06
$
0.06
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 March 31, 2020 December 31, 2019 March 31, 2019 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
$
2,977,994
$
30,408
4.11
%
$
2,981,333
$
31,574
4.20
%
$
2,774,852
$
29,218
4.27
%
Securities - taxable
531,046
3,619
2.74
%
497,739
3,475
2.77
%
429,020
3,324
3.14
%
Securities - non-taxable
99,833
572
2.30
%
99,310
604
2.41
%
94,245
684
2.94
%
Other earning assets
415,927
1,645
1.59
%
452,945
2,224
1.95
%
246,732
1,773
2.91
%
Total interest-earning assets
4,024,800
36,244
3.62
%
4,031,327
37,877
3.73
%
3,544,849
34,999
4.00
%
Allowance for loan losses
(22,059
)
(21,967
)
(18,229
)
Noninterest-earning assets
97,191
98,856
100,888
Total assets
$
4,099,932
$
4,108,216
$
3,627,508
Liabilities Interest-bearing liabilities Interest-bearing demand deposits
$
122,925
$
219
0.72
%
$
122,031
$
223
0.73
%
$
109,453
$
212
0.79
%
Savings accounts
30,345
78
1.03
%
34,298
94
1.09
%
38,853
108
1.13
%
Money market accounts
866,605
3,743
1.74
%
752,941
3,653
1.92
%
563,106
2,752
1.98
%
Certificates and brokered deposits
2,069,170
13,168
2.56
%
2,201,231
14,447
2.60
%
2,017,262
12,314
2.48
%
Total interest-bearing deposits
3,089,045
17,208
2.24
%
3,110,501
18,417
2.35
%
2,728,674
15,386
2.29
%
Other borrowed funds
584,465
4,018
2.76
%
584,386
4,086
2.77
%
540,705
3,369
2.53
%
Total interest-bearing liabilities
3,673,510
21,226
2.32
%
3,694,887
22,503
2.42
%
3,269,379
18,755
2.33
%
Noninterest-bearing deposits
60,456
49,570
42,551
Other noninterest-bearing liabilities
54,961
66,136
23,695
Total liabilities
3,788,927
3,810,593
3,335,625
Shareholders' equity
311,005
297,623
291,883
Total liabilities and shareholders' equity
$
4,099,932
$
4,108,216
$
3,627,508
Net interest income
$
15,018
$
15,374
$
16,244
Interest rate spread1.30
%
1.31
%
1.67
%
Net interest margin1.50
%
1.51
%
1.86
%
Net interest margin - FTE 2,31.65
%
1.67
%
2.04
%
1
Includes nonaccrual loans2
On a fully-taxable equivalent ("FTE") basis assuming a 21% tax rate3
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 March 31, 2020 December 31, 2019 March 31, 2019 Amount Percent Amount Percent Amount Percent Commercial loans Commercial and industrial$
95,227
3.3
%
$
96,420
3.3
%
$
110,560
3.8
%
Owner-occupied commercial real estate
74,737
2.6
%
73,392
2.5
%
75,317
2.7
%
Investor commercial real estate
13,421
0.5
%
12,567
0.4
%
11,188
0.4
%
Construction
64,581
2.2
%
60,274
2.0
%
42,319
1.5
%
Single tenant lease financing
972,275
33.6
%
995,879
33.6
%
975,841
34.3
%
Public finance
627,678
21.7
%
687,094
23.2
%
708,816
25.0
%
Healthcare finance
372,266
12.9
%
300,612
10.1
%
158,796
5.6
%
Small business lending
67,275
2.3
%
61,121
2.1
%
13,751
0.5
%
Total commercial loans
2,287,460
79.1
%
2,287,359
77.2
%
2,096,588
73.8
%
Consumer loans Residential mortgage
218,730
7.6
%
313,849
10.6
%
404,869
14.3
%
Home equity
23,855
0.8
%
24,306
0.8
%
27,794
1.0
%
Trailers
148,700
5.1
%
146,734
5.0
%
140,548
4.9
%
Recreational vehicles
103,868
3.6
%
102,702
3.5
%
95,871
3.4
%
Other consumer loans
44,037
1.5
%
45,873
1.5
%
48,840
1.7
%
Total consumer loans
539,190
18.6
%
633,464
21.4
%
717,922
25.3
%
Net deferred loan fees, premiums, discounts and other 1
65,443
2.3
%
42,724
1.4
%
25,418
0.9
%
Total loans$
2,892,093
100.0
%
$
2,963,547
100.0
%
$
2,839,928
100.0
%
March 31, 2020 December 31, 2019 March 31, 2019 Amount Percent Amount Percent Amount Percent Deposits Noninterest-bearing deposits$
70,562
2.2
%
$
57,115
1.8
%
$
45,878
1.6
%
Interest-bearing demand deposits
123,233
3.9
%
129,020
4.1
%
111,626
4.0
%
Savings accounts
32,485
1.0
%
29,616
0.9
%
41,958
1.5
%
Money market accounts
930,698
29.3
%
786,390
24.9
%
573,895
20.4
%
Certificates of deposits
1,493,644
47.0
%
1,613,453
51.2
%
1,464,543
52.1
%
Brokered deposits
527,884
16.6
%
538,369
17.1
%
573,208
20.4
%
Total deposits$
3,178,506
100.0
%
$
3,153,963
100.0
%
$
2,811,108
100.0
%
1
Includes carrying value adjustments of $44.6 million, $21.4 million and $11.5 million as of March 31, 2020, December 31, 2019 and March 31, 2019, respectively, related to interest rate swaps associated with public finance loans. First Internet Bancorp Reconciliation of Non-GAAP Financial Measures Dollar amounts in thousands, except per share dataThree Months Ended
March 31,
December 31,
March 31,
2020
2019
2019
Total equity - GAAP$
305,127
$
304,913
$
294,013
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
Tangible common equity$
300,440
$
300,226
$
289,326
Total assets - GAAP
$
4,168,146
$
4,100,083
$
3,670,176
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
Tangible assets$
4,163,459
$
4,095,396
$
3,665,489
Common shares outstanding
9,801,825
9,741,800
10,128,587
Book value per common share
$
31.13
$
31.30
$
29.03
Effect of goodwill
(0.48
)
(0.48
)
(0.46
)
Tangible book value per common share$
30.65
$
30.82
$
28.57
Total shareholders' equity to assets
7.32
%
7.44
%
8.01
%
Effect of goodwill
(0.10
%)
(0.11
%)
(0.12
%)
Tangible common equity to tangible assets
7.22
%
7.33
%
7.89
%
Total average equity - GAAP$
311,005
$
297,623
$
291,883
Adjustments: Average goodwill
(4,687
)
(4,687
)
(4,687
)
Average tangible common equity$
306,318
$
292,936
$
287,196
Return on average shareholders' equity
7.78
%
9.46
%
7.91
%
Effect of goodwill
0.12
%
0.15
%
0.13
%
Return on average tangible common equity
7.90
%
9.61
%
8.04
%
Total interest income$
36,244
$
37,877
$
34,999
Adjustments: Fully-taxable equivalent adjustments 1
1,535
1,570
1,557
Total interest income - FTE
$
37,779
$
39,447
$
36,556
Net interest income
$
15,018
$
15,374
$
16,244
Adjustments: Fully-taxable equivalent adjustments 1
1,535
1,570
1,557
Net interest income - FTE
$
16,553
$
16,944
$
17,801
Net interest margin
1.50
%
1.51
%
1.86
%
Effect of fully-taxable equivalent adjustments 1
0.15
%
0.16
%
0.18
%
Net interest margin - FTE
1.65
%
1.67
%
2.04
%
1
Assuming a 21% tax rate
View source version on businesswire.com: https://www.businesswire.com/news/home/20200422006013/en/