First Internet Bancorp Reports Fourth Quarter and Full Year 2021 Results

Rhea-AI Summary

First Internet Bancorp (Nasdaq: INBK) reported record annual net income of $48.1 million and diluted earnings per share of $4.82 for 2021. In Q4, net income was $12.5 million, or $1.25 per diluted share, marking a 3.3% increase from Q3 2021. Total quarterly revenue reached $31.2 million, reflecting an 8.6% rise from Q3 but a slight decline from Q4 2020. The company repurchased 100,000 shares at an average price of $44.36 during the quarter. Additionally, net interest margin improved to 2.30%.

Positive

• Record annual net income of $48.1 million for 2021.
• Quarterly net income increased to $12.5 million, up 3.3% from Q3 2021.
• Total quarterly revenue of $31.2 million, an 8.6% increase from Q3 2021.
• Net interest margin improved to 2.30%, up from 2.00% in Q3 2021.
• Book value per share increased to $38.99.

Negative

• Total loans decreased by $48.5 million, or 1.7%, compared to Q3 2021.
• Noninterest income fell to $7.7 million, a decrease from the previous quarter.

Highlights for the fourth quarter and full year 2021 include:

• Record annual net income and diluted earnings per share of $48.1 million and $4.82, respectively
• Quarterly net income of $12.5 million, compared to $12.1 million for the third quarter of 2021 and $11.1 million for the fourth quarter of 2020
• Quarterly diluted earnings per share of $1.25, up 3.3% over the third quarter of 2021 and 11.6% over the fourth quarter of 2020
• Quarterly adjusted net income of $13.0 million, or $1.30 per diluted share, when excluding an IT contract termination fee and acquisition-related expenses
• Total quarterly revenue of $31.2 million, an 8.6% increase from the third quarter of 2021 and a 1.0% decrease from the fourth quarter of 2020
• Net interest margin and fully-taxable equivalent net interest margin both increased 30 basis points (“bps”) from the third quarter of 2021
• Repurchased 100,000 shares at an average price of $44.36 during the quarter

FISHERS, Ind.--(BUSINESS WIRE)-- 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 22^nd 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 data
					Three 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 spread												2.18	%									1.88	%									1.64	%
Net interest margin												2.30	%									2.00	%									1.78	%
Net interest margin - FTE 2,3												2.43	%									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 spread												1.99	%									1.38	%
Net interest margin												2.11	%									1.55	%
Net interest margin - FTE 2,3												2.25	%									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 data
				Three 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 data
				Three 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 data
				Three 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/

Investors/Analysts

Paula Deemer

Director of Corporate Administration

(317) 428-4628

investors@firstib.com

Media

Nicole Lorch

President & Chief Operating Officer

(317) 532-7906

nlorch@firstib.com

Source: First Internet Bancorp

FAQ

What were First Internet Bancorp's earnings for Q4 2021?

First Internet Bancorp reported net income of $12.5 million, or $1.25 diluted earnings per share for Q4 2021.

How much was First Internet Bancorp's annual net income for 2021?

The annual net income for First Internet Bancorp in 2021 was a record $48.1 million.

What is the stock symbol for First Internet Bancorp?

The stock symbol for First Internet Bancorp is INBK.

Did First Internet Bancorp repurchase any shares in Q4 2021?

Yes, First Internet Bancorp repurchased 100,000 shares at an average price of $44.36 in Q4 2021.

What was the total quarterly revenue for First Internet Bancorp in Q4 2021?

Total quarterly revenue for Q4 2021 was $31.2 million.