First Internet Bancorp Reports Fourth Quarter and Full Year 2021 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 fourth quarter and full year ended December 31, 2021. Net income for the fourth quarter of 2021 was $12.5 million, or $1.25 diluted earnings per share. This compares to net income of $12.1 million, or $1.21 diluted earnings per share, for the third quarter of 2021, and net income of $11.1 million, or $1.12 diluted earnings per share, for the fourth quarter of 2020.
For the full year ended December 31, 2021, net income was a record $48.1 million and diluted earnings per share were a record $4.82, compared to net income of $29.5 million and diluted earnings per share of $2.99 for the year ended December 31, 2020.
“We generated record annual net income for 2021, closing out our 22nd year on a high note and paving the path for a bright future ahead,” said David Becker, Chairman and Chief Executive Officer. “Over the course of the year, we built momentum on several fronts. Our expanding national SBA platform steadily gained traction and contributed to our year-over-year revenue growth, while our recently formed franchise finance business funded over $80 million in loans in conjunction with our partner ApplePie Capital. Solid pipelines in SBA, franchise finance, construction and other key business lines position us well for the year ahead.
“With respect to our strategies designed to build sustainable fee revenue, our transformational acquisition of First Century Bancorp, announced in November, will add several attractive and scalable business lines, providing us multiple growth opportunities, a further diversified revenue profile and access to a stable, low-cost deposit base,” Mr. Becker added. “This is a compelling, strategic acquisition that we believe will bolster the combined company’s long-term earnings power.
“Looking forward, we plan to further build out our national small business platform, integrate First Century Bancorp and expand our banking-as-a-service capabilities, as evidenced by our recently announced partnership with Synctera. We will also continue to look for Fintech partners that will help to further position us as a premier technology-forward digital financial services provider.”
Mr. Becker concluded, “I want to thank the entire First Internet team for their exceptional work this year. We foster a workplace culture that promotes innovation and collaboration, and we all aspire to have a more meaningful and lasting positive impact on our customers and the communities we call home. We were named one of the “Best Banks to Work For” by American Banker for the ninth consecutive year, a recognition that amplifies our success attracting, developing and retaining a talented, diverse and dedicated workforce.”
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2021 was $23.5 million, compared to $20.9 million for the third quarter of 2021, and $18.9 million for the fourth quarter of 2020. On a fully-taxable equivalent basis, net interest income for the fourth quarter of 2021 was $24.9 million, compared to $22.3 million for the third quarter of 2021, and $20.3 million for the fourth quarter of 2020.
Total interest income for the fourth quarter of 2021 was $34.2 million, an increase of 3.5% compared to the third quarter of 2021, and an increase of 1.6% compared to the fourth quarter of 2020. On a fully-taxable equivalent basis, total interest income for the fourth quarter of 2021 was $35.5 million, an increase of 3.3% compared to the third quarter of 2021, and an increase of 1.4% compared to the fourth quarter of 2020. The increase in total interest income compared to the third quarter of 2021 was driven primarily by an 18 bp increase in the yield on average interest-earning assets, partially offset by a 2.2% decrease in the average balance of those assets. The yield on interest-earning assets for the fourth quarter of 2021 increased to 3.34% from 3.16% in the linked quarter due primarily to an increase in loan fee income as well as higher yields on new loan production. Average loan balances decreased $9.3 million, or 0.3%, while the average balance of securities and other earning assets decreased $35.8 million and $47.4 million, respectively.
Total interest expense for the fourth quarter of 2021 was $10.7 million, a decrease of 11.8% compared to the third quarter of 2021, and a decrease of 27.7% compared to the fourth quarter of 2020. The decrease in total interest expense compared to the linked quarter was due primarily to a 51 bp decline in the cost of other borrowed funds and a 6 bp decline in the cost of interest-bearing deposits. The decrease in the cost of other borrowed funds reflects the recognition of $0.8 million of pre-tax costs associated with the redemption of subordinated notes in the third quarter of 2021.
During the fourth quarter of 2021, the cost of non-maturity deposits remained stable compared to the linked quarter while the average balance of these deposits decreased $31.7 million, or 1.8%. Furthermore, the cost of certificates and brokered deposits decreased by 12 bps and average balances decreased by $73.5 million, or 5.3%. During the fourth quarter of 2021, new certificates of deposit were originated at a weighted average cost of 40 bps while maturing certificates of deposit had a weighted average cost of 146 bps, a difference of 106 bps.
Net interest margin (“NIM”) improved to 2.30% for the fourth quarter of 2021, up from 2.00% for the third quarter of 2021 and 1.78% in the fourth quarter of 2020. Fully-taxable equivalent NIM (“FTE NIM”) increased by 30 bps to 2.43% for the fourth quarter of 2021, up from 2.13% for the third quarter of 2021 and 1.91% in the fourth quarter of 2020. The increases in NIM and FTE NIM compared to the linked quarter were driven primarily by a combination of higher average loan yields and lower interest-bearing deposit costs, as well as the effect of lower securities and cash balances.
Noninterest Income
Noninterest income for the fourth quarter of 2021 was $7.7 million, compared to $7.8 million for the third quarter of 2021 and $12.7 million for the fourth quarter of 2020. The slight decrease compared to the linked quarter was driven primarily by lower revenues from mortgage banking activities, partially offset by an increase in gain on sale of loans. Gain on sale of loans totaled $4.1 million for the quarter, increasing $1.4 million compared to the third quarter of 2021, driven by a $0.9 million gain on the sale of $20.1 million of single tenant lease financing loans as well as a higher amount of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loan sales in the quarter. Mortgage banking revenue totaled $2.8 million for the fourth quarter of 2021, down $1.1 million from the linked quarter due to a decrease in interest rate locks, sold loan volume and margins.
Noninterest Expense
Noninterest expense for the fourth quarter of 2021 was $17.0 million, compared to $14.5 million for both the third quarter of 2021 and the fourth quarter of 2020. The increase of $2.5 million, or 17.3%, compared to the linked quarter was due primarily to higher salaries and employee benefits, consulting and professional fees and premises and equipment. The higher salaries and employee benefits expense was due mainly to higher incentive compensation in the Company’s small business lending division, higher medical claims expense and increased headcount. The increase in consulting and professional fees was primarily due to $0.2 million of acquisition-related expenses as well as the timing of third party external loan reviews. The increase in premises and equipment was driven primarily by a $0.5 million termination fee related to an information technology contract.
Income Taxes
The Company reported an income tax expense of $2.0 million for the fourth quarter of 2021 and an effective tax rate of 13.8%, compared to an income tax expense of $2.2 million and an effective tax rate of 15.5% for the third quarter of 2021 and an income tax expense of $3.1 million and an effective tax rate of 21.6% for the fourth quarter of 2020.
Loans and Credit Quality
Total loans as of December 31, 2021 were $2.9 billion, a decrease of $48.5 million, or 1.7%, compared to September 30, 2021, and a decrease of $171.6 million, or 5.6%, compared to December 31, 2020. Total commercial loan balances were $2.4 billion as of December 31, 2021, a decrease of $41.6 million, or 1.7%, compared to September 30, 2021 and a decrease of $151.8 million, or 6.0%, compared to December 31, 2020. Compared to the linked quarter, the decline in commercial loan balances was driven primarily by net payoffs in single tenant lease financing, healthcare finance, owner-occupied commercial real estate, commercial and industrial and public finance loans as well as the sale of single tenant lease financing loans discussed above. These items were partially offset by growth in franchise finance, construction and small business lending.
Total consumer loan balances were $469.9 million as of December 31, 2021, a decrease of $5.2 million, or 1.1%, compared to September 30, 2021 and a decrease of $12.4 million, or 2.6%, compared to December 31, 2020. The decrease compared to the linked quarter was due to prepayment activity in the residential mortgage, trailers and other consumer loan portfolios.
Total delinquencies 30 days or more past due decreased to 0.04% of total loans as of December 31, 2021, down from 0.06% as of September 30, 2021 and down from 0.17% as of December 31, 2020. Overall credit quality improved as nonperforming loans to total loans was 0.26% as of December 31, 2021, compared to 0.27% at September 30, 2021 and 0.33% as of December 31, 2020.
The allowance for loan losses as a percentage of total loans was 0.96% as of December 31, 2021, or 0.97% when excluding PPP loans, compared to 0.95% and 0.96%, respectively, as of September 30, 2021 and 0.96% and 0.98%, respectively, as of December 31, 2020.
Net recoveries of $0.1 million were recognized during the fourth quarter of 2021, resulting in net recoveries to average loans of 0.01%, compared to net charge-offs to average loans of 0.01% for the third quarter of 2021 and 0.04% for the fourth quarter of 2020. The provision for loan losses in the fourth quarter of 2021 was a benefit of $0.2 million, compared to a benefit of $29,000 for the third quarter of 2021 and a provision of $2.9 million for the fourth quarter of 2020. The benefit recognized in the fourth quarter of 2021 primarily reflects the decrease in loan balances, partially offset by adjustments to qualitative factors that increased the overall allowance as a percentage of loans.
Capital
As of December 31, 2021, total shareholders’ equity was $380.3 million, an increase of $9.9 million, or 2.7%, compared to September 30, 2021, due primarily to the net income earned during the quarter and a decrease in accumulated other comprehensive loss, partially offset by stock repurchase activity during the quarter. Book value per common share increased to $38.99 as of December 30, 2021, up from $37.59 as of September 30, 2021 and $33.77 as of December 31, 2020. Tangible book value per share increased to $38.51, up from $37.12 and $33.29, each as of the same reference dates.
In connection with its recently announced stock repurchase program, the Company repurchased 100,000 shares of its common stock during the fourth quarter of 2021 at an average price of $44.36 per share.
The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of December 31, 2021.
As of December 31, 2021
Company
Bank
Total shareholders' equity to assets
9.03%
10.17%
Tangible common equity to tangible assets 1
8.93%
10.07%
Tier 1 leverage ratio 2
9.22%
10.37%
Common equity tier 1 capital ratio 2
12.92%
14.55%
Tier 1 capital ratio 2
12.92%
14.55%
Total risk-based capital ratio 2
17.36%
15.48%
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, January 20, 2022 to discuss its quarterly and full year financial results. The call can be accessed via telephone at (888) 348-3664. A recorded replay can be accessed through February 21, 2022 by dialing (877) 344-7529; passcode: 6205278.
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 December 31, 2021. 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, SBA financing, residential mortgage loans, 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” 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, including statements with respect to the pending acquisition of First Century Bancorp and its effects on the future performance of the Company and the Bank, the expected timing of completion of the transaction and other statements concerning 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,” “confidence in,” “continue,” “could,” “designed,” “effort,” “estimate,” “expect,” “help,” “intend,” “looking forward,” “may,” “opportunities,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “will,” “working on,” “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. Such statements are subject to certain risks and uncertainties including: the effects of the COVID-19 global pandemic and other adverse public health developments on the economy, 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 we own or 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 real estate, commercial and industrial, public finance, SBA, healthcare finance and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; execution of pending and future acquisition, reorganization or disposition transactions, including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; the failure of any of the closing conditions in the definitive merger agreement with First Century Bancorp to be satisfied on a timely basis or at all; fluctuations in interest rates; 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, adjusted net interest income, adjusted net interest income – FTE, net interest margin – FTE, adjusted net interest margin, adjusted net interest margin – FTE, allowance for loan losses to loans, excluding PPP loans, adjusted total revenue, adjusted noninterest income, adjusted noninterest expense, adjusted income before income taxes, adjusted income tax provision, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders’ equity, adjusted return on average tangible common equity and adjusted effective income tax rate 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
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2021
2021
2020
2021
2020
Net income
$
12,478
$
12,090
$
11,090
$
48,114
$
29,453
Per share and share information Earnings per share - basic
$
1.26
$
1.22
$
1.12
$
4.85
$
2.99
Earnings per share - diluted
1.25
1.21
1.12
4.82
2.99
Dividends declared per share
0.06
0.06
0.06
0.24
0.24
Book value per common share
38.99
37.59
33.77
38.99
33.77
Tangible book value per common share 1
38.51
37.12
33.29
38.51
33.29
Common shares outstanding
9,754,455
9,854,153
9,800,569
9,754,455
9,800,569
Average common shares outstanding: Basic
9,903,856
9,936,237
9,883,609
9,918,083
9,840,205
Diluted
9,989,951
9,988,102
9,914,022
9,976,261
9,842,425
Performance ratios Return on average assets
1.19
%
1.12
%
1.02
%
1.14
%
0.69
%
Return on average shareholders' equity
13.14
%
13.10
%
13.64
%
13.44
%
9.39
%
Return on average tangible common equity 1
13.30
%
13.27
%
13.84
%
13.61
%
9.53
%
Net interest margin
2.30
%
2.00
%
1.78
%
2.11
%
1.55
%
Net interest margin - FTE 1,2
2.43
%
2.13
%
1.91
%
2.25
%
1.68
%
Capital ratios 3 Total shareholders' equity to assets
9.03
%
8.71
%
7.79
%
9.03
%
7.79
%
Tangible common equity to tangible assets 1
8.93
%
8.61
%
7.69
%
8.93
%
7.69
%
Tier 1 leverage ratio
9.22
%
8.86
%
7.95
%
9.22
%
7.95
%
Common equity tier 1 capital ratio
12.92
%
12.62
%
11.31
%
12.92
%
11.31
%
Tier 1 capital ratio
12.92
%
12.62
%
11.31
%
12.92
%
11.31
%
Total risk-based capital ratio
17.36
%
17.04
%
14.91
%
17.36
%
14.91
%
Asset quality Nonperforming loans$
7,401
$
7,851
$
10,183
$
7,401
$
10,183
Nonperforming assets
8,618
9,039
10,218
8,618
10,218
Nonperforming loans to loans
0.26
%
0.27
%
0.33
%
0.26
%
0.33
%
Nonperforming assets to total assets
0.20
%
0.21
%
0.24
%
0.20
%
0.24
%
Allowance for loan losses to: Loans
0.96
%
0.95
%
0.96
%
0.96
%
0.96
%
Loans, excluding PPP loans 1
0.97
%
0.96
%
0.98
%
0.97
%
0.98
%
Nonperforming loans
376.2
%
356.6
%
289.5
%
376.2
%
289.5
%
Net (recoveries) charge-offs to average loans
(0.01
%)
0.01
%
0.04
%
0.09
%
0.06
%
Average balance sheet information Loans$
2,914,858
$
2,933,654
$
3,070,476
$
2,972,224
$
2,985,611
Total securities
677,580
713,342
582,425
629,095
626,022
Other earning assets
431,621
479,051
532,466
466,608
523,788
Total interest-earning assets
4,056,254
4,148,726
4,219,142
4,094,935
4,175,799
Total assets
4,177,578
4,265,189
4,316,207
4,205,926
4,263,798
Noninterest-bearing deposits
113,887
104,161
86,836
101,825
74,277
Interest-bearing deposits
3,032,435
3,137,728
3,258,269
3,098,706
3,224,657
Total deposits
3,146,322
3,241,889
3,345,105
3,200,531
3,298,934
Shareholders' equity
376,832
366,187
323,464
358,105
313,763
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, except for December 31, 2020) Dollar amounts in thousands
December 31,
September 30,
December 31,
2021
2021
2020
Assets Cash and due from banks
$
7,492
$
4,932
$
7,367
Interest-bearing deposits
435,468
402,583
412,439
Securities available-for-sale, at fair value
603,044
634,007
497,628
Securities held-to-maturity, at amortized cost
59,565
62,129
68,223
Loans held-for-sale
47,745
43,970
39,584
Loans
2,887,662
2,936,148
3,059,231
Allowance for loan losses
(27,841
)
(28,000
)
(29,484
)
Net loans
2,859,821
2,908,148
3,029,747
Accrued interest receivable
16,037
14,866
17,416
Federal Home Loan Bank of Indianapolis stock
25,650
25,650
25,650
Cash surrender value of bank-owned life insurance
38,900
38,660
37,952
Premises and equipment, net
59,842
52,700
37,590
Goodwill
4,687
4,687
4,687
Servicing asset
4,702
4,412
3,569
Other real estate owned
1,188
1,188
-
Accrued income and other assets
46,853
54,360
64,304
Total assets
$
4,210,994
$
4,252,292
$
4,246,156
Liabilities Noninterest-bearing deposits
$
117,531
$
110,117
$
96,753
Interest-bearing deposits
3,061,428
3,114,478
3,174,132
Total deposits
3,178,959
3,224,595
3,270,885
Advances from Federal Home Loan Bank
514,922
514,920
514,916
Subordinated debt
104,231
104,156
79,603
Accrued interest payable
2,018
1,568
1,439
Accrued expenses and other liabilities
30,526
36,611
48,369
Total liabilities
3,830,656
3,881,850
3,915,212
Shareholders' equity Voting common stock
218,946
223,059
221,408
Retained earnings
172,431
160,551
126,732
Accumulated other comprehensive loss
(11,039
)
(13,168
)
(17,196
)
Total shareholders' equity
380,338
370,442
330,944
Total liabilities and shareholders' equity
$
4,210,994
$
4,252,292
$
4,246,156
First Internet Bancorp Condensed Consolidated Statements of Income (unaudited, except for the twelve months ended December 31, 2020) Dollar amounts in thousands, except per share data Three Months Ended Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2021
2021
2020
2021
2020
Interest income Loans
$
31,621
$
30,126
$
30,930
$
123,467
$
120,628
Securities - taxable
1,973
2,297
1,988
7,970
11,123
Securities - non-taxable
236
241
318
1,017
1,728
Other earning assets
362
370
407
1,429
3,380
Total interest income
34,192
33,034
33,643
133,883
136,859
Interest expense Deposits
6,399
7,090
10,577
29,822
55,976
Other borrowed funds
4,288
5,025
4,201
17,505
16,342
Total interest expense
10,687
12,115
14,778
47,327
72,318
Net interest income
23,505
20,919
18,865
86,556
64,541
(Benefit) provision for loan losses
(238
)
(29
)
2,864
1,030
9,325
Net interest income after (benefit) provision for loan losses
23,743
20,948
16,001
85,526
55,216
Noninterest income Service charges and fees
292
276
206
1,114
824
Loan servicing revenue
544
511
379
1,934
1,159
Loan servicing asset revaluation
(400
)
(274
)
(60
)
(1,069
)
(432
)
Mortgage banking activities
2,776
3,850
7,987
15,050
24,693
Gain on sale of loans
4,137
2,719
3,702
11,598
8,298
Gain on sale of securities
-
-
-
-
139
Gain on sale of premises and equipment
-
-
-
2,523
-
Other
345
731
443
1,694
1,655
Total noninterest income
7,694
7,813
12,657
32,844
36,336
Noninterest expense Salaries and employee benefits
10,183
9,316
9,135
38,223
34,231
Marketing, advertising and promotion
896
813
443
3,261
1,654
Consulting and professional fees
1,262
728
788
4,054
3,511
Data processing
425
380
426
1,649
1,528
Loan expenses
654
383
630
2,112
2,036
Premises and equipment
2,188
1,687
1,601
7,063
6,396
Deposit insurance premium
283
230
450
1,213
1,810
Write-down of other real estate owned
-
-
-
-
2,065
Other
1,064
914
1,040
4,223
4,423
Total noninterest expense
16,955
14,451
14,513
61,798
57,654
Income before income taxes
14,482
14,310
14,145
56,572
33,898
Income tax provision
2,004
2,220
3,055
8,458
4,445
Net income
$
12,478
$
12,090
$
11,090
$
48,114
$
29,453
Per common share data Earnings per share - basic
$
1.26
$
1.22
$
1.12
$
4.85
$
2.99
Earnings per share - diluted
$
1.25
$
1.21
$
1.12
$
4.82
$
2.99
Dividends declared per share
$
0.06
$
0.06
$
0.06
$
0.24
$
0.24
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
December 31, 2021
September 30, 2021
December 31, 2020
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$
2,947,053
$
31,621
4.26
%
$
2,956,333
$
30,126
4.04
%
$
3,104,251
$
30,930
3.96
%
Securities - taxable
595,024
1,973
1.32
%
629,101
2,297
1.45
%
492,573
$
1,988
1.61
%
Securities - non-taxable
82,556
236
1.13
%
84,241
241
1.14
%
89,852
$
318
1.41
%
Other earning assets
431,621
362
0.33
%
479,051
370
0.31
%
532,466
$
407
0.30
%
Total interest-earning assets
4,056,254
34,192
3.34
%
4,148,726
33,034
3.16
%
4,219,142
33,643
3.17
%
Allowance for loan losses
(27,946
)
(28,127
)
(27,805
)
Noninterest-earning assets
149,270
144,590
124,870
Total assets
$
4,177,578
$
4,265,189
$
4,316,207
Liabilities Interest-bearing liabilities Interest-bearing demand deposits
$
210,283
$
158
0.30
%
$
198,637
$
150
0.30
%
$
165,815
$
156
0.37
%
Savings accounts
63,575
58
0.36
%
62,195
56
0.36
%
49,209
54
0.44
%
Money market accounts
1,453,447
1,507
0.41
%
1,498,218
1,532
0.41
%
1,369,543
1,655
0.48
%
Certificates and brokered deposits
1,305,130
4,676
1.42
%
1,378,678
5,352
1.54
%
1,673,702
8,712
2.07
%
Total interest-bearing deposits
3,032,435
6,399
0.84
%
3,137,728
7,090
0.90
%
3,258,269
10,577
1.29
%
Other borrowed funds
619,115
4,288
2.75
%
611,975
5,025
3.26
%
591,806
4,201
2.82
%
Total interest-bearing liabilities
3,651,550
10,687
1.16
%
3,749,703
12,115
1.28
%
3,850,075
14,778
1.53
%
Noninterest-bearing deposits
113,887
104,161
86,836
Other noninterest-bearing liabilities
35,309
45,138
55,832
Total liabilities
3,800,746
3,899,002
3,992,743
Shareholders' equity
376,832
366,187
323,464
Total liabilities and shareholders' equity
$
4,177,578
$
4,265,189
$
4,316,207
Net interest income
$
23,505
$
20,919
$
18,865
Interest rate spread2.18
%
1.88
%
1.64
%
Net interest margin2.30
%
2.00
%
1.78
%
Net interest margin - FTE 2,32.43
%
2.13
%
1.91
%
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 Twelve Months Ended December 31, 2021 December 31, 2020 Average Interest / Yield / Average Interest / Yield / Balance Dividends Cost Balance Dividends Cost Assets Interest-earning assets Loans, including loans held-for-sale 1$
2,999,232
$
123,467
4.12
%
$
3,025,989
$
120,628
3.99
%
Securities - taxable
544,613
7,970
1.46
%
530,849
11,123
2.10
%
Securities - non-taxable
84,482
1,017
1.20
%
95,173
1,728
1.82
%
Other earning assets
466,608
1,429
0.31
%
523,788
3,380
0.65
%
Total interest-earning assets
4,094,935
133,883
3.27
%
4,175,799
136,859
3.28
%
Allowance for loan losses
(29,068
)
(24,660
)
Noninterest-earning assets
140,059
112,659
Total assets
$
4,205,926
$
4,263,798
Liabilities Interest-bearing liabilities Interest-bearing demand deposits
$
195,699
$
583
0.30
%
$
145,207
$
840
0.58
%
Savings accounts
56,967
203
0.36
%
40,593
303
0.75
%
Money market accounts
1,434,829
5,892
0.41
%
1,156,084
11,381
0.98
%
Certificates and brokered deposits
1,411,211
23,144
1.64
%
1,882,773
43,452
2.31
%
Total interest-bearing deposits
3,098,706
29,822
0.96
%
3,224,657
55,976
1.74
%
Other borrowed funds
600,035
17,505
2.92
%
586,372
16,342
2.79
%
Total interest-bearing liabilities
3,698,741
47,327
1.28
%
3,811,029
72,318
1.90
%
Noninterest-bearing deposits
101,825
74,277
Other noninterest-bearing liabilities
47,255
64,729
Total liabilities
3,847,821
3,950,035
Shareholders' equity
358,105
313,763
Total liabilities and shareholders' equity
$
4,205,926
$
4,263,798
Net interest income
$
86,556
$
64,541
Interest rate spread1.99
%
1.38
%
Net interest margin2.11
%
1.55
%
Net interest margin - FTE 2,32.25
%
1.68
%
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 December 31, 2021 September 30, 2021 December 31, 2020 Amount Percent Amount Percent Amount Percent Commercial loans Commercial and industrial$
96,008
3.3
%
$
107,142
3.6
%
$
75,387
2.5
%
Owner-occupied commercial real estate
66,732
2.3
%
84,819
2.9
%
89,785
2.9
%
Investor commercial real estate
28,019
1.0
%
28,505
1.0
%
13,902
0.5
%
Construction
136,619
4.7
%
115,414
3.9
%
110,385
3.6
%
Single tenant lease financing
865,854
30.0
%
921,998
31.5
%
950,172
31.1
%
Public finance
592,665
20.5
%
601,738
20.5
%
622,257
20.3
%
Healthcare finance
387,852
13.4
%
417,388
14.2
%
528,154
17.3
%
Small business lending
108,666
3.8
%
102,889
3.5
%
125,589
4.1
%
Franchise finance
81,448
2.8
%
25,598
0.9
%
-
-
Total commercial loans
2,363,863
81.8
%
2,405,491
82.0
%
2,515,631
82.3
%
Consumer loans Residential mortgage
186,770
6.5
%
188,750
6.4
%
186,787
6.1
%
Home equity
17,665
0.6
%
17,960
0.6
%
19,857
0.6
%
Trailers
146,267
5.1
%
147,806
5.0
%
144,493
4.7
%
Recreational vehicles
90,654
3.1
%
90,192
3.1
%
94,405
3.1
%
Other consumer loans
28,557
1.0
%
30,398
1.0
%
36,794
1.2
%
Total consumer loans
469,913
16.3
%
475,106
16.1
%
482,336
15.7
%
Net deferred loan fees, premiums, discounts and other 1
53,886
1.9
%
55,551
1.9
%
61,264
2.0
%
Total loans$
2,887,662
100.0
%
$
2,936,148
100.0
%
$
3,059,231
100.0
%
December 31, 2021 September 30, 2021 December 31, 2020 Amount Percent Amount Percent Amount Percent Deposits Noninterest-bearing deposits$
117,532
3.7
%
$
110,117
3.4
%
$
96,753
3.0
%
Interest-bearing demand deposits
247,966
7.8
%
201,557
6.3
%
188,645
5.8
%
Savings accounts
59,998
1.9
%
66,762
2.1
%
43,200
1.3
%
Money market accounts
1,483,936
46.7
%
1,479,358
45.8
%
1,350,566
41.3
%
Certificates of deposits
970,107
30.5
%
1,043,898
32.4
%
1,289,319
39.4
%
Brokered deposits
299,420
9.4
%
322,903
10.0
%
302,402
9.2
%
Total deposits
$
3,178,959
100.0
%
$
3,224,595
100.0
%
$
3,270,885
100.0
%
1 Includes carrying value adjustments of $37.5 million, $38.9 million and $42.7 million related to terminated interest rate swaps associated with public finance loans as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively. First Internet Bancorp Reconciliation of Non-GAAP Financial Measures Dollar amounts in thousands, except per share dataThree Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2021
2021
2020
2021
2020
Total equity - GAAP
$
380,338
$
370,442
$
330,944
$
380,338
$
330,944
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible common equity$
375,651
$
365,755
$
326,257
$
375,651
$
326,257
Total assets - GAAP
$
4,210,994
$
4,252,292
$
4,246,156
$
4,210,994
$
4,246,156
Adjustments: Goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Tangible assets$
4,206,307
$
4,247,605
$
4,241,469
$
4,206,307
$
4,241,469
Common shares outstanding
9,754,455
9,854,153
9,800,569
9,754,455
9,800,569
Book value per common share
$
38.99
$
37.59
$
33.77
$
38.99
$
33.77
Effect of goodwill
(0.48
)
(0.47
)
(0.48
)
(0.48
)
(0.48
)
Tangible book value per common share$
38.51
$
37.12
$
33.29
$
38.51
$
33.29
Total shareholders' equity to assets
9.03
%
8.71
%
7.79
%
9.03
%
7.79
%
Effect of goodwill
(0.10
%)
(0.10
%)
(0.10
%)
(0.10
%)
(0.10
%)
Tangible common equity to tangible assets
8.93
%
8.61
%
7.69
%
8.93
%
7.69
%
Total average equity - GAAP$
376,832
$
366,187
$
323,464
$
358,105
$
313,763
Adjustments: Average goodwill
(4,687
)
(4,687
)
(4,687
)
(4,687
)
(4,687
)
Average tangible common equity$
372,145
$
361,500
$
318,777
$
353,418
$
309,076
Return on average shareholders' equity
13.14
%
13.10
%
13.64
%
13.44
%
9.39
%
Effect of goodwill
0.16
%
0.17
%
0.20
%
0.17
%
0.14
%
Return on average tangible common equity
13.30
%
13.27
%
13.84
%
13.61
%
9.53
%
Total interest income$
34,192
$
33,034
$
33,643
$
133,883
$
136,859
Adjustments: Fully-taxable equivalent adjustments 1
1,348
1,356
1,400
5,453
5,796
Total interest income - FTE
$
35,540
$
34,390
$
35,043
$
139,336
$
142,655
Net interest income
$
23,505
$
20,919
$
18,865
$
86,556
$
64,541
Adjustments: Fully-taxable equivalent adjustments 1
1,348
1,356
1,400
5,453
5,796
Net interest income - FTE
$
24,853
$
22,275
$
20,265
$
92,009
$
70,337
Net interest income
$
23,505
$
20,919
$
18,865
$
86,556
$
64,541
Adjustments: Subordinated debt redemption cost
-
810
-
810
-
Adjusted net interest income
$
23,505
$
21,729
$
18,865
$
87,366
$
64,541
Net interest income
$
23,505
$
20,919
$
18,865
$
86,556
$
64,541
Adjustments: Fully-taxable equivalent adjustments 1
1,348
1,356
1,400
5,453
5,796
Subordinated debt redemption cost
-
810
-
810
-
Adjusted net interest income - FTE
$
24,853
$
23,085
$
20,265
$
92,819
$
70,337
Net interest margin
2.30
%
2.00
%
1.78
%
2.11
%
1.55
%
Effect of fully-taxable equivalent adjustments 1
0.13
%
0.13
%
0.13
%
0.14
%
0.13
%
Net interest margin - FTE
2.43
%
2.13
%
1.91
%
2.25
%
1.68
%
Net interest margin
2.30
%
2.00
%
1.78
%
2.11
%
1.55
%
Effect of subordinated debt redemption cost
0.00
%
0.08
%
0.00
%
0.02
%
0.00
%
Adjusted net interest margin
2.30
%
2.08
%
1.78
%
2.13
%
1.55
%
Net interest margin
2.30
%
2.00
%
1.78
%
2.11
%
1.55
%
Effect of fully-taxable equivalent adjustments 1
0.13
%
0.13
%
0.13
%
0.14
%
0.13
%
Effect of subordinated debt redemption cost
0.00
%
0.08
%
0.00
%
0.02
%
0.00
%
Adjusted net interest margin - FTE
2.43
%
2.21
%
1.91
%
2.27
%
1.68
%
Allowance for loan losses$
27,841
$
28,000
$
29,484
$
27,841
$
29,484
Loans
$
2,887,662
$
2,936,148
$
3,059,231
$
2,887,662
$
3,059,231
Adjustments: PPP loans
(3,152
)
(14,981
)
(50,554
)
(3,152
)
(50,554
)
Loans, excluding PPP loans$
2,884,510
$
2,921,167
$
3,008,677
$
2,884,510
$
3,008,677
Allowance for loan losses to loans
0.96
%
0.95
%
0.96
%
0.96
%
0.96
%
Effect of PPP loans
0.01
%
0.01
%
0.02
%
0.01
%
0.02
%
Allowance for loan losses to loans, excluding PPP loans
0.97
%
0.96
%
0.98
%
0.97
%
0.98
%
1 Assuming a 21% tax rate First Internet Bancorp Reconciliation of Non-GAAP Financial Measures Dollar amounts in thousands, except per share dataThree Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2021
2021
2020
2021
2020
Total revenue - GAAP$
31,199
$
28,732
$
31,522
$
119,400
$
100,877
Adjustments: Gain on sale of premises and equipment
-
-
-
(2,523
)
-
Subordinated debt redemption cost
-
810
-
810
-
Adjusted total revenue$
31,199
$
29,542
$
31,522
$
117,687
$
100,877
Noninterest income - GAAP$
7,694
$
7,813
$
12,657
$
32,844
$
36,336
Adjustments: Gain on sale of premises and equipment
-
-
-
(2,523
)
-
Adjusted noninterest income$
7,694
$
7,813
$
12,657
$
30,321
$
36,336
Noninterest expense - GAAP$
16,955
$
14,451
$
14,513
$
61,798
$
57,654
Adjustments: Acquisition-related expenses
(163
)
-
-
(163
)
-
IT termination fee
(475
)
-
-
(475
)
-
Adjusted noninterest expense$
16,317
$
14,451
$
14,513
$
61,160
$
57,654
Income before income taxes - GAAP$
14,482
$
14,310
$
14,145
$
56,572
$
33,898
Adjustments: Write-down of other real estate owned
-
-
-
-
2,065
Gain on sale of premises and equipment
-
-
-
(2,523
)
-
Subordinated debt redemption cost
-
810
-
810
-
Acquisition-related expenses
163
-
-
163
-
IT termination fee
475
-
-
475
-
Adjusted income before income taxes$
15,120
$
15,120
$
14,145
$
55,497
$
35,963
Income tax provision - GAAP$
2,004
$
2,220
$
3,055
$
8,458
$
4,445
Adjustments: Write-down of other real estate owned
-
-
-
-
434
Gain on sale of premises and equipment
-
-
-
(530
)
-
Subordinated debt redemption cost
-
170
-
170
-
Acquisition-related expenses
34
-
-
34
-
IT termination fee
100
-
-
100
-
Adjusted income tax provision$
2,138
$
2,390
$
3,055
$
8,232
$
4,879
Net income - GAAP$
12,478
$
12,090
$
11,090
$
48,114
$
29,453
Adjustments: Write-down of other real estate owned
-
-
-
-
1,631
Gain on sale of premises and equipment
-
-
-
(1,993
)
-
Subordinated debt redemption cost
-
640
-
640
-
Acquisition-related expenses
129
-
-
129
-
IT termination fee
375
-
-
375
-
Adjusted net income$
12,982
$
12,730
$
11,090
$
47,265
$
31,084
First Internet Bancorp Reconciliation of Non-GAAP Financial Measures Dollar amounts in thousands, except per share dataThree Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2021
2021
2020
2021
2020
Diluted average common shares outstanding
9,989,951
9,988,102
9,914,022
9,976,261
9,842,425
Diluted earnings per share - GAAP
$
1.25
$
1.21
$
1.12
$
4.82
$
2.99
Adjustments: Effect of write-down of other real estate owned
-
-
-
-
0.17
Effect of gain on sale of premises and equipment
-
-
-
(0.19
)
-
Effect of subordinated debt redemption cost
-
0.06
-
0.06
-
Effect of acquisition-related expenses
0.01
-
-
0.01
-
Effect of IT termination fee
0.04
-
-
0.04
-
Adjusted diluted earnings per share
$
1.30
$
1.27
$
1.12
$
4.74
$
3.16
Return on average assets
1.19
%
1.12
%
1.02
%
1.14
%
0.69
%
Effect of write-down of other real estate owned
0.00
%
0.00
%
0.00
%
0.00
%
0.04
%
Effect of gain on sale of premises and equipment
0.00
%
0.00
%
0.00
%
(0.05
%)
0.00
%
Effect of subordinated debt redemption cost
0.00
%
0.06
%
0.00
%
0.02
%
0.00
%
Effect of acquisition-related expenses
0.01
%
0.00
%
0.00
%
0.00
%
0.00
%
Effect of IT termination fee
0.04
%
0.00
%
0.00
%
0.01
%
0.00
%
Adjusted return on average assets
1.24
%
1.18
%
1.02
%
1.12
%
0.73
%
Return on average shareholders' equity
13.14
%
13.10
%
13.64
%
13.44
%
9.39
%
Effect of write-down of other real estate owned
0.00
%
0.00
%
0.00
%
0.00
%
0.52
%
Effect of gain on sale of premises and equipment
0.00
%
0.00
%
0.00
%
(0.56
%)
0.00
%
Effect of subordinated debt redemption cost
0.00
%
0.69
%
0.00
%
0.18
%
0.00
%
Effect of acquisition-related expenses
0.14
%
0.00
%
0.00
%
0.04
%
0.00
%
Effect of IT termination fee
0.39
%
0.00
%
0.00
%
0.10
%
0.00
%
Adjusted return on average shareholders' equity
13.67
%
13.79
%
13.64
%
13.20
%
9.91
%
Return on average tangible common equity
13.30
%
13.27
%
13.84
%
13.61
%
9.53
%
Effect of write-down of other real estate owned
0.00
%
0.00
%
0.00
%
0.00
%
0.53
%
Effect of gain on sale of premises and equipment
0.00
%
0.00
%
0.00
%
(0.56
%)
0.00
%
Effect of subordinated debt redemption cost
0.00
%
0.70
%
0.00
%
0.18
%
0.00
%
Effect of acquisition-related expenses
0.14
%
0.00
%
0.00
%
0.04
%
0.00
%
Effect of IT termination fee
0.40
%
0.00
%
0.00
%
0.10
%
0.00
%
Adjusted return on average tangible common equity
13.84
%
13.97
%
13.84
%
13.37
%
10.06
%
Effective income tax rate
13.8
%
15.5
%
21.6
%
15.0
%
13.1
%
Effect of write-down of other real estate owned
0.0
%
0.0
%
0.0
%
0.0
%
0.5
%
Effect of gain on sale of premises and equipment
0.0
%
0.0
%
0.0
%
(0.4
%)
0.0
%
Effect of subordinated debt redemption cost
0.0
%
0.3
%
0.0
%
0.1
%
0.0
%
Effect of acquisition-related expenses
0.1
%
0.0
%
0.0
%
0.0
%
0.0
%
Effect of IT termination fee
0.2
%
0.0
%
0.0
%
0.1
%
0.0
%
Adjusted effective income tax rate
14.1
%
15.8
%
21.6
%
14.8
%
13.6
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20220117005366/en/