First Internet Bancorp Reports First Quarter 2021 Results

Rhea-AI Summary

First Internet Bancorp (Nasdaq: INBK) reported a net income of $10.5 million for Q1 2021, equating to $1.05 diluted EPS, a slight decline from Q4 2020's $11.1 million but a significant increase from $6.0 million in Q1 2020. The bank's net interest income increased to $20.5 million, boosted by improved net interest margin of 2.04%, up from 1.78% in Q4 2020. Total loans stood at $3.1 billion, stable from the previous quarter but up 5.8% year-over-year. The bank experienced a slight rise in credit quality issues, but overall performance remains strong.

Positive

• Net income increased to $10.5 million for Q1 2021 from $6.0 million in Q1 2020.
• Net interest income rose to $20.5 million, reflecting improved net interest margin of 2.04%.
• Total loans were stable at $3.1 billion, with a year-over-year increase of 5.8%.

Negative

• Net income decreased compared to the previous quarter (Q4 2020) of $11.1 million.
• Noninterest income fell to $8.4 million, down significantly from $12.7 million in Q4 2020.

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 2021. Net income for the first quarter of 2021 was $10.5 million, or $1.05 diluted earnings per share. This compares to net income of $11.1 million, or $1.12 diluted earnings per share, for the fourth quarter of 2020, and net income of $6.0 million, or $0.62 diluted earnings per share, for the first quarter of 2020.

“We produced strong earnings and solid momentum to start 2021, driven by net interest margin expansion, continued healthy production in our direct-to-consumer mortgage business and strong credit performance,” said David Becker, Chairman, President and Chief Executive Officer. “Growth in net interest income combined with our strategies designed to build sustainable fee revenue paid off as we generated an average return on assets of 1.02% for the second straight quarter and increased our tangible common equity to tangible assets ratio by 43 basis points to 8.12%.”

Mr. Becker concluded, “I am pleased with our first quarter financial performance and the consistently excellent work of the entire First Internet team. I want to thank all of them for their efforts in once again delivering on our goals. The high level of commitment 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 2021 was $20.5 million, compared to $18.9 million for the fourth quarter of 2020, and $15.0 million for the first quarter of 2020. On a fully-taxable equivalent basis, net interest income for the first quarter of 2021 was $21.9 million, compared to $20.3 million for the fourth quarter of 2020, and $16.6 million for the first quarter of 2020.

Total interest income for the first quarter of 2021 was $33.3 million, a decrease of 1.1%, compared to the fourth quarter of 2020, and a decrease of 8.2% compared to the first quarter of 2020. On a fully-taxable equivalent basis, total interest income for the first quarter of 2021 was $34.6 million, a decrease of 1.2% compared to the fourth quarter of 2020, and a decrease of 8.3% compared to the first quarter of 2020. The slight decrease in total interest income compared to the fourth quarter of 2020 was driven primarily by a decrease in day count as well as a 3.4% decrease in the average balance of interest-earning assets, which was partially offset by a 14 bp increase in the yield on those assets. The yield on interest-earning assets for the first quarter of 2021 increased to 3.31% from 3.17% in the prior quarter due primarily to changes in the earning asset mix and an increase in loan fee income, mostly related to prepayments. Average loan balances decreased $25.1 million, or 0.8%, while the average balances of securities and other earning assets decreased $34.0 million, or 5.8%, and $86.4 million, or 16.2%, respectively.

Total interest expense for the first quarter of 2021 was $12.8 million, a decrease of 13.7%, compared to the fourth quarter of 2020, and a decrease of 39.9%, compared to the first quarter of 2020. The decrease in total interest expense compared to the linked quarter was due primarily to a 17 bp decline in the cost of interest-bearing deposits as well as a decline of 4.4% in the average balance of these deposits. The decrease in deposit costs reflects the continued decline in the rates paid on interest-bearing deposits as well as a shift in the deposit mix due to a reduction in certificates and brokered deposits.

During the first quarter of 2021, the cost of money market deposits decreased by 7 bps compared to the linked quarter while the average balance of these deposits remained stable. Furthermore, the cost of certificates and brokered deposits decreased by 18 bps and average balances decreased $154.1 million, or 9.2%. During the first quarter of 2021, new certificates of deposit were originated at a weighted average cost of 40 bps while maturing deposits had a weighted average cost of 216 bps; a difference of 176 bps.

Net interest margin (“NIM”) improved to 2.04% for the first quarter of 2021, up from 1.78% for the fourth quarter of 2020 and 1.50% for the first quarter of 2020. Fully-taxable equivalent NIM (“FTE NIM”) increased to 2.18% for the first quarter of 2021, up from 1.91% for the fourth quarter of 2020 and 1.65% for the first quarter of 2020. The increases in NIM and FTE NIM compared to the linked quarter were driven primarily by a combination of lower interest-bearing deposit costs and higher average loan yields.

Noninterest Income

Noninterest income for the first quarter of 2021 was $8.4 million, compared to $12.7 million for the fourth quarter of 2020 and $6.2 million for the first quarter of 2020. The decrease compared to the linked quarter was driven primarily by lower revenues from mortgage banking activities and a decrease in gain on sale of loans. Mortgage banking revenue totaled $5.8 million for the first quarter of 2021, down $2.2 million from the linked quarter, due primarily to a decrease in interest rate lock volume and a decrease in margins. On a historical basis, however, mortgage banking revenue remained strong as the low interest rate environment continued to drive purchase and refinance activity. Gain on sale of loans totaled $1.7 million for the quarter, decreasing $2.0 million compared to the fourth quarter of 2020 due to a reduction in U.S. Small Business Administration (“SBA”) 7(a) guaranteed loan sales in the quarter.

Noninterest Expense

Noninterest expense for the first quarter of 2021 was $15.3 million, compared to $14.5 million for the fourth quarter of 2020 and $13.5 million for the first quarter of 2020. Noninterest expense increased on a linked-quarter basis, driven primarily by a $0.4 million increase in salaries and employee benefits, a $0.2 million increase in marketing, advertising and promotion expense, and a $0.2 million increase consulting and professional fees. The increase in salaries and employee benefits expense was due mainly to higher medical claims experience, share-based compensation and seasonal resets of employee benefits and payroll taxes. The increase in marketing expenses was due to higher mortgage lead generation costs and increased digital marketing initiatives. The increase in consulting and professional fees was due to seasonally higher legal expenses generally related to year-end reporting and the preparation of proxy materials for our annual meeting of shareholders, which are customarily incurred in the first quarter. Additionally, during the first quarter of 2021, and reflected in other noninterest expense, the Company made a $250,000 contribution to a foundation that supports not-for-profit organizations and community-based initiatives in Hamilton County, IN.

Income Taxes

The Company reported income tax expense of $1.9 million for the first quarter of 2021 and an effective tax rate of 15.1%, compared to income tax expense of $3.1 million and an effective tax rate of 21.6% for the fourth quarter of 2020 and income tax expense of $0.3 million for the first quarter of 2020. The decrease in income taxes during the quarter was primarily due to a decrease in pre-tax earnings driven by a lower proportion of taxable revenue.

Loans and Credit Quality

Total loans as of March 31, 2021 were $3.1 billion, relatively consistent with December 31, 2020, and an increase of $166.6 million, or 5.8%, compared to March 31, 2020. Total commercial loan balances were $2.5 billion as of March 31, 2021, a slight increase of $4.1 million, or 0.2%, compared to December 31, 2020 and an increase of $232.3 million, or 10.2%, compared to March 31, 2020. Compared to the linked quarter, the growth in commercial loan balances was driven largely by production in public finance, construction and small business lending, which was partially offset by a decrease in healthcare finance and single tenant lease financing balances due to elevated prepayment activity.

Total consumer loan balances were $478.3 million as of March 31, 2021, a decrease of $4.0 million, or 0.8%, compared to December 31, 2020 and a decrease of $60.9 million, or 11.3%, compared to March 31, 2020. The slight decline in consumer loan balances from December 31, 2020 was due primarily to increased prepayment activity across the RV and trailer portfolios.

Total delinquencies 30 days or more past due were 0.23% of total loans as of March 31, 2021, up from 0.17% as of December 31, 2020 and down from 0.32% as of March 31, 2020. Overall credit quality remained strong as nonperforming loans to total loans was 0.46% as of March 31, 2021, compared to 0.33% as of December 31, 2020 and 0.26% as of March 31, 2020.

The allowance for loan losses as a percentage of total loans was 1.00% as of March 31, 2021, or 1.02% when excluding SBA Paycheck Protection Program (“PPP”) loans, compared to 0.96% and 0.98%, respectively, as of December 31, 2020 and 0.79% as of March 31, 2020. While the balance of total loans was consistent with the prior quarter, the Company continued to make additional adjustments to qualitative factors in its allowance model as well as recorded specific reserves on two commercial relationships totaling $1.1 million in the aggregate. These items were partially offset by loan portfolio composition changes which included reductions in certain portfolios with higher reserve coverage ratios as well as growth in portfolios with lower reserve coverage ratios. In total, both the amount of the allowance for loan losses and the allowance as a percentage of total loans increased compared to December 31, 2020.

Net charge-offs of $0.1 million were recognized during the first quarter of 2021, resulting in net charge-offs to average loans of 0.02%, compared to 0.04% for the fourth quarter of 2020 and 0.06% for the first quarter of 2020. The provision for loan losses in the first quarter of 2021 was $1.3 million, compared to $2.9 million for the fourth quarter of 2020 and $1.5 million for the first quarter of 2020.

Capital

As of March 31, 2021, total shareholders’ equity was $344.6 million, an increase of $13.6 million, or 4.1%, compared to December 31, 2020, due primarily to net income earned during the quarter and a decrease in accumulated other comprehensive loss. Book value per common share increased to $35.07 as of March 31, 2021, up from $33.77 as of December 31, 2020 and $31.13 as of March 31, 2020. Tangible book value per share increased to $34.60, up from $33.29 and $30.65, 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, 2021.

		As of March 31, 2021
		Company			Bank
Total shareholders' equity to assets		8.23%			9.13%
Tangible common equity to tangible assets 1		8.12%			9.03%
Tier 1 leverage ratio 2		8.46%			9.37%
Common equity tier 1 capital ratio 2		11.81%			13.08%
Tier 1 capital ratio 2		11.81%			13.08%
Total risk-based capital ratio 2		15.18%			14.11%
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 22, 2021 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 22, 2021 by dialing (877) 344-7529; passcode: 10154405.

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, 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, 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, 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,” "designed," “estimate,” “expect,” “intend,” “may,” “optimistic,” “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 continues to impact general business and economic conditions, as well as our customers, counterparties, employees, and third-party service providers. Continued uncertainty in market conditions 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. The ultimate magnitude and duration of the pandemic is still unknown at this time, therefore, the extent of the impact on our business, financial position, results of operations, liquidity and prospects remains uncertain. 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; 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, net interest margin – FTE and allowance for loan losses to loans, excluding PPP loans 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 data
			Three Months Ended
			March 31,				December 31,				March 31,
			2021				2020				2020
Net income			$	10,450			$	11,090			$	6,019
Per share and share information
Earnings per share - basic			$	1.06			$	1.12			$	0.62
Earnings per share - diluted				1.05				1.12				0.62
Dividends declared per share				0.06				0.06				0.06
Book value per common share				35.07				33.77				31.13
Tangible book value per common share 1				34.60				33.29				30.65
Common shares outstanding				9,823,831				9,800,569				9,801,825
Average common shares outstanding:
Basic				9,899,230				9,883,609				9,721,485
Diluted				9,963,036				9,914,022				9,750,528
Performance ratios
Return on average assets				1.02	%			1.02	%			0.59	%
Return on average shareholders' equity				12.61	%			13.64	%			7.78	%
Return on average tangible common equity 1				12.79	%			13.84	%			7.90	%
Net interest margin				2.04	%			1.78	%			1.50	%
Net interest margin - FTE 1,2				2.18	%			1.91	%			1.65	%
Capital ratios 3
Total shareholders' equity to assets				8.23	%			7.79	%			7.32	%
Tangible common equity to tangible assets 1				8.12	%			7.69	%			7.22	%
Tier 1 leverage ratio				8.46	%			7.95	%			7.82	%
Common equity tier 1 capital ratio				11.81	%			11.31	%			10.76	%
Tier 1 capital ratio				11.81	%			11.31	%			10.76	%
Total risk-based capital ratio				15.18	%			14.91	%			13.87	%
Asset quality
Nonperforming loans			$	14,048			$	10,183			$	7,443
Nonperforming assets				14,077				10,218				9,622
Nonperforming loans to loans				0.46	%			0.33	%			0.26	%
Nonperforming assets to total assets				0.34	%			0.24	%			0.23	%
Allowance for loan losses to:
Loans				1.00	%			0.96	%			0.79	%
Loans, excluding PPP loans 1				1.02	%			0.98	%			0.79	%
Nonperforming loans				218.1	%			289.5	%			307.1	%
Net charge-offs to average loans				0.02	%			0.04	%			0.06	%
Average balance sheet information
Loans			$	3,047,915			$	3,070,476			$	2,931,108
Total securities				548,429				582,425				630,879
Other earning assets				446,045				532,466				415,927
Total interest-earning assets				4,073,604				4,219,142				4,024,800
Total assets				4,173,273				4,316,207				4,099,932
Noninterest-bearing deposits				90,764				86,836				60,456
Interest-bearing deposits				3,115,987				3,258,269				3,089,045
Total deposits				3,206,751				3,345,105				3,149,501
Shareholders' equity				335,968				323,464				311,005

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
		March 31,				December 31,				March 31,
		2021				2020				2020
Assets
Cash and due from banks		$	4,440			$	7,367			$	5,726
Interest-bearing deposits			411,765				412,439				345,542
Securities available-for-sale, at fair value			462,376				497,628				608,682
Securities held-to-maturity, at amortized cost			68,190				68,223				66,331
Loans held-for-sale			30,235				39,584				52,394
Loans			3,058,694				3,059,231				2,892,093
Allowance for loan losses			(30,642	)			(29,484	)			(22,857	)
Net loans			3,028,052				3,029,747				2,869,236
Accrued interest receivable			16,433				17,416				16,960
Federal Home Loan Bank of Indianapolis stock			25,650				25,650				25,650
Cash surrender value of bank-owned life insurance			38,185				37,952				37,238
Premises and equipment, net			42,381				37,590				18,883
Goodwill			4,687				4,687				4,687
Servicing asset			3,817				3,569				2,415
Other real estate owned			-				-				2,065
Accrued income and other assets			52,359				64,304				112,337
Total assets		$	4,188,570			$	4,246,156			$	4,168,146
Liabilities
Noninterest-bearing deposits		$	100,700			$	96,753			$	70,562
Interest-bearing deposits			3,116,903				3,174,132				3,107,944
Total deposits			3,217,603				3,270,885				3,178,506
Advances from Federal Home Loan Bank			514,917				514,916				514,911
Subordinated debt			69,794				79,603				69,605
Accrued interest payable			1,418				1,439				3,293
Accrued expenses and other liabilities			40,272				48,369				96,704
Total liabilities			3,844,004				3,915,212				3,863,019
Shareholders' equity
Voting common stock			221,911				221,408				219,893
Retained earnings			136,575				126,732				105,100
Accumulated other comprehensive loss			(13,920	)			(17,196	)			(19,866	)
Total shareholders' equity			344,566				330,944				305,127
Total liabilities and shareholders' equity		$	4,188,570			$	4,246,156			$	4,168,146

First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited)
Dollar amounts in thousands, except per share data
		Three Months Ended
		March 31,				December 31,				March 31,
		2021				2020				2020
Interest income
Loans		$	30,885			$	30,930			$	30,408
Securities - taxable			1,779				1,988				3,619
Securities - non-taxable			281				318				572
Other earning assets			335				407				1,645
Total interest income			33,280				33,643				36,244
Interest expense
Deposits			8,628				10,577				17,208
Other borrowed funds			4,127				4,201				4,018
Total interest expense			12,755				14,778				21,226
Net interest income			20,525				18,865				15,018
Provision for loan losses			1,276				2,864				1,461
Net interest income after provision
for loan losses			19,249				16,001				13,557
Noninterest income
Service charges and fees			266				206				212
Loan servicing revenue			422				379				251
Loan servicing asset revaluation			(155	)			(60	)			(179	)
Mortgage banking activities			5,750				7,987				3,668
Gain on sale of loans			1,723				3,702				1,801
Gain (loss) on sale of securities			-				-				41
Other			369				443				417
Total noninterest income			8,375				12,657				6,211
Noninterest expense
Salaries and employee benefits			9,492				9,135				7,774
Marketing, advertising and promotion			680				443				375
Consulting and professional fees			986				788				1,177
Data processing			462				426				375
Loan expenses			534				630				599
Premises and equipment			1,601				1,601				1,625
Deposit insurance premium			425				450				485
Other			1,137				1,040				1,076
Total noninterest expense			15,317				14,513				13,486
Income before income taxes			12,307				14,145				6,282
Income tax provision			1,857				3,055				263
Net income		$	10,450			$	11,090			$	6,019
Per common share data
Earnings per share - basic		$	1.06			$	1.12			$	0.62
Earnings per share - diluted		$	1.05			$	1.12			$	0.62
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, 2021										December 31, 2020										March 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		$	3,079,130			$	30,885		4.07	%		$	3,104,251			$	30,930		3.96	%		$	2,977,994			$	30,408		4.11	%
Securities - taxable			461,300				1,779		1.56	%			492,573				1,988		1.61	%			531,046			$	3,619		2.74	%
Securities - non-taxable			87,129				281		1.31	%			89,852				318		1.41	%			99,833			$	572		2.30	%
Other earning assets			446,045				335		0.30	%			532,466				407		0.30	%			415,927			$	1,645		1.59	%
Total interest-earning assets			4,073,604				33,280		3.31	%			4,219,142				33,643		3.17	%			4,024,800				36,244		3.62	%
Allowance for loan losses			(29,884	)									(27,805	)									(22,059	)
Noninterest-earning assets			129,553										124,870										97,191
Total assets		$	4,173,273									$	4,316,207									$	4,099,932
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits		$	180,746			$	133		0.30	%		$	165,815			$	156		0.37	%		$	122,925			$	219		0.72	%
Savings accounts			46,035				40		0.35	%			49,209				54		0.44	%			30,345				78		1.03	%
Money market accounts			1,369,626				1,391		0.41	%			1,369,543				1,655		0.48	%			866,605				3,743		1.74	%
Certificates and brokered deposits			1,519,580				7,064		1.89	%			1,673,702				8,712		2.07	%			2,069,170				13,168		2.56	%
Total interest-bearing deposits			3,115,987				8,628		1.12	%			3,258,269				10,577		1.29	%			3,089,045				17,208		2.24	%
Other borrowed funds			583,780				4,127		2.87	%			591,806				4,201		2.82	%			584,465				4,018		2.76	%
Total interest-bearing liabilities			3,699,767				12,755		1.40	%			3,850,075				14,778		1.53	%			3,673,510				21,226		2.32	%
Noninterest-bearing deposits			90,764										86,836										60,456
Other noninterest-bearing liabilities			46,774										55,832										54,961
Total liabilities			3,837,305										3,992,743										3,788,927
Shareholders' equity			335,968										323,464										311,005
Total liabilities and shareholders' equity		$	4,173,273									$	4,316,207									$	4,099,932
Net interest income						$	20,525									$	18,865									$	15,018
Interest rate spread									1.91	%									1.64	%									1.30	%
Net interest margin									2.04	%									1.78	%									1.50	%
Net interest margin - FTE 2,3									2.18	%									1.91	%									1.65	%

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
		March 21, 2021						December 31, 2020						March 21, 2020
		Amount			Percent			Amount			Percent			Amount			Percent
Commercial loans
Commercial and industrial		$	71,835		2.3	%		$	75,387		2.5	%		$	95,227		3.3	%
Owner-occupied commercial real estate			87,930		2.9	%			89,785		2.9	%			74,737		2.6	%
Investor commercial real estate			14,832		0.5	%			13,902		0.5	%			13,421		0.5	%
Construction			123,483		4.0	%			110,385		3.6	%			64,581		2.2	%
Single tenant lease financing			941,322		30.8	%			950,172		31.1	%			972,275		33.6	%
Public finance			637,600		20.8	%			622,257		20.3	%			627,678		21.7	%
Healthcare finance			510,237		16.8	%			528,154		17.3	%			372,266		12.9	%
Small business lending			132,490		4.3	%			125,589		4.1	%			67,275		2.3	%
Total commercial loans			2,519,729		82.4	%			2,515,631		82.3	%			2,287,460		79.1	%
Consumer loans
Residential mortgage			190,148		6.2	%			186,787		6.1	%			218,730		7.6	%
Home equity			17,949		0.6	%			19,857		0.6	%			23,855		0.8	%
Trailers			143,454		4.7	%			144,493		4.7	%			148,700		5.1	%
Recreational vehicles			92,221		3.0	%			94,405		3.1	%			103,868		3.6	%
Other consumer loans			34,534		1.1	%			36,794		1.2	%			44,037		1.5	%
Total consumer loans			478,306		15.6	%			482,336		15.7	%			539,190		18.6	%
Net deferred loan fees, premiums, discounts and other 1			60,659		2.0	%			61,264		2.0	%			65,443		2.3	%
Total loans		$	3,058,694		100.0	%		$	3,059,231		100.0	%		$	2,892,093		100.0	%
		March 21, 2021						December 31, 2020						March 21, 2020
		Amount			Percent			Amount			Percent			Amount			Percent
Deposits
Noninterest-bearing deposits		$	100,700		3.1	%		$	96,753		3.0	%		$	70,562		2.2	%
Interest-bearing demand deposits			186,015		5.8	%			188,645		5.8	%			123,233		3.9	%
Savings accounts			51,251		1.6	%			43,200		1.3	%			32,485		1.0	%
Money market accounts			1,397,449		43.4	%			1,350,566		41.3	%			930,698		29.3	%
Certificates of deposits			1,174,764		36.5	%			1,289,319		39.4	%			1,493,644		47.0	%
Brokered deposits			307,424		9.6	%			302,402		9.2	%			527,884		16.6	%
			-		-				-
Total deposits		$	3,217,603		100.0	%		$	3,270,885		100.0	%		$	3,178,506		100.0	%

1 Includes carrying value adjustments of $41.6 million and $42.7 million related to terminated interest rate swaps associated with public finance loans as of March 31, 2021 and December 31, 2020, respectively, and $44.6 million as of March 31, 2020 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 data
		Three Months Ended
		March 31,				December 31,				March 31,
		2021				2020				2020
Total equity - GAAP		$	344,566			$	330,944			$	305,127
Adjustments:
Goodwill			(4,687	)			(4,687	)			(4,687	)
Tangible common equity		$	339,879			$	326,257			$	300,440
Total assets - GAAP		$	4,188,570			$	4,246,156			$	4,168,146
Adjustments:
Goodwill			(4,687	)			(4,687	)			(4,687	)
Tangible assets		$	4,183,883			$	4,241,469			$	4,163,459
Common shares outstanding			9,823,831				9,800,569				9,801,825
Book value per common share		$	35.07			$	33.77			$	31.13
Effect of goodwill			(0.47	)			(0.48	)			(0.48	)
Tangible book value per common share		$	34.60			$	33.29			$	30.65
Total shareholders' equity to assets			8.23	%			7.79	%			7.32	%
Effect of goodwill			(0.11	%)			(0.10	%)			(0.10	%)
Tangible common equity to tangible assets			8.12	%			7.69	%			7.22	%
Total average equity - GAAP		$	335,968			$	323,464			$	311,005
Adjustments:
Average goodwill			(4,687	)			(4,687	)			(4,687	)
Average tangible common equity		$	331,281			$	318,777			$	306,318
Return on average shareholders' equity			12.61	%			13.64	%			7.78	%
Effect of goodwill			0.18	%			0.20	%			0.12	%
Return on average tangible common equity			12.79	%			13.84	%			7.90	%
Total interest income		$	33,280			$	33,643			$	36,244
Adjustments:
Fully-taxable equivalent adjustments 1			1,356				1,400				1,535
Total interest income - FTE		$	34,636			$	35,043			$	37,779
Net interest income		$	20,525			$	18,865			$	15,018
Adjustments:
Fully-taxable equivalent adjustments 1			1,356				1,400				1,535
Net interest income - FTE		$	21,881			$	20,265			$	16,553
Net interest margin			2.04	%			1.78	%			1.50	%
Effect of fully-taxable equivalent adjustments 1			0.14	%			0.13	%			0.15	%
Net interest margin - FTE			2.18	%			1.91	%			1.65	%
Allowance for loan losses		$	30,642			$	29,484			$	22,857
Loans		$	3,058,694			$	3,059,231			$	2,892,093
Adjustments:
PPP loans			(53,365	)			(50,554	)			-
Loans, excluding PPP loans		$	3,005,329			$	3,008,677			$	2,892,093
Allowance for loan losses to loans			1.00	%			0.96	%			0.79	%
Effect of PPP loans			0.02	%			0.02	%			0.00	%
Allowance for loan losses to loans, excluding PPP loans			1.02	%			0.98	%			0.79	%

1 Assuming a 21% tax rate

 

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FAQ

What were First Internet Bancorp's Q1 2021 earnings?

First Internet Bancorp reported a net income of $10.5 million for Q1 2021.

How much did First Internet Bancorp's net interest income grow in Q1 2021?

Net interest income for Q1 2021 was $20.5 million, up from $15.0 million in Q1 2020.

What was the net interest margin for First Internet Bancorp in Q1 2021?

The net interest margin improved to 2.04% in Q1 2021.

Did First Internet Bancorp experience any credit quality issues in Q1 2021?

Yes, total delinquencies increased to 0.23%, up from 0.17% in Q4 2020.

What was the total loan balance for First Internet Bancorp as of March 31, 2021?

The total loan balance stood at $3.1 billion as of March 31, 2021.