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Overview of First Internet Bancorp
First Internet Bancorp (NASDAQ: INBK) is a bank holding company headquartered in the United States. It operates primarily through its wholly-owned subsidiary, First Internet Bank of Indiana, which provides a wide range of commercial and retail banking services. Established as a branchless, internet-only bank, First Internet Bancorp has positioned itself as a pioneer in leveraging technology to deliver banking services efficiently and cost-effectively. This innovative model allows the company to operate without the overhead costs associated with maintaining physical branch networks, offering a streamlined and convenient banking experience to its customers.
Core Business Model
First Internet Bancorp’s business model is centered around its single operating segment, Commercial Banking. The company generates revenue through a combination of interest income from loans and investments, as well as non-interest income from fees associated with its various financial services. By focusing on a branchless banking approach, the company caters to both individuals and businesses seeking a modern, technology-driven banking experience. Its operations are supported by a robust digital platform that facilitates seamless account management, loan applications, and treasury services.
Product and Service Offerings
First Internet Bancorp offers a diverse portfolio of banking products and services, including:
- Deposit Accounts: Savings accounts, money market accounts, certificates of deposit, and both interest-bearing and non-interest-bearing demand deposits.
- Lending Services: The company provides a wide range of loans, including commercial and industrial loans, owner-occupied and investor commercial real estate loans, construction loans, residential mortgages, home equity loans, and consumer loans such as small installment and home improvement loans.
- Specialized Financing: Single-tenant lease financing, municipal lending and leasing products, and public and healthcare finance solutions.
- Corporate Services: Treasury management, corporate credit cards, lines of credit, and letters of credit tailored for commercial customers.
Market Position and Differentiation
Operating within the highly competitive financial services industry, First Internet Bancorp distinguishes itself through its internet-only banking model. This approach enables the company to serve customers nationwide without the geographic limitations imposed by physical branch networks. Its focus on niche markets such as single-tenant lease financing and municipal securities further sets it apart from traditional banks. By targeting these specialized segments, the company aims to build expertise and establish a competitive edge in areas with potentially less direct competition.
Challenges and Competitive Landscape
First Internet Bancorp faces several challenges inherent to the banking industry, including interest rate volatility, regulatory compliance, and competition from both traditional banks and emerging fintech companies. The branchless model, while cost-efficient, may limit the company’s ability to attract customers who prefer in-person interactions. Additionally, its reliance on a single operating segment could expose it to risks associated with market fluctuations in the commercial banking sector. Key competitors include regional banks, national financial institutions, and fintech firms offering similar digital-first banking solutions.
Conclusion
First Internet Bancorp represents a modern approach to banking, leveraging technology to provide efficient and accessible financial services. Its branchless model, combined with a focus on niche lending markets, positions it as a unique player in the financial services industry. While challenges such as competition and regulatory pressures persist, the company’s innovative approach and specialized offerings underscore its commitment to meeting the evolving needs of its customers.
First Internet Bank and ApplePie Capital have entered a loan purchase agreement to finance franchisees, with First Internet Bank set to acquire $100 million in ApplePie's "ApplePie Core" loans by year-end. This partnership aids franchisees in obtaining capital for new locations, remodels, and more. ApplePie has funded over $1.25 billion across 200+ franchise brands since its inception in 2015. The agreement reflects First Internet Bank's commitment to supporting entrepreneurs and aligns with the franchise industry's growth potential post-pandemic.
First Internet Bancorp (Nasdaq: INBK) announced it will release its third quarter 2021 financial results after market close on
First Internet Bank has appointed Dustin DeNeal as First Vice President, Counsel, responsible for legal and regulatory matters. With over 13 years at Faegre Drinker Biddle & Reath LLP, DeNeal brings significant experience in financial institutions. President Nicole Lorch stated his skills will enhance the bank's strategic growth plans. First Internet Bank, founded in 1999, reports assets of $4.2 billion as of June 30, 2021, offering a range of banking services nationally. The bank is a subsidiary of First Internet Bancorp (Nasdaq: INBK).
The Board of Directors of First Internet Bancorp (NASDAQ: INBK) has declared a quarterly cash dividend of $0.06 per common share, payable on October 15, 2021, to shareholders on record as of September 30, 2021. Future dividends will be determined based on the Company's operational results, financial condition, and other relevant factors. As of June 30, 2021, the Company has assets totaling $4.2 billion. First Internet Bancorp operates nationally through its subsidiary, First Internet Bank, offering various banking services.
David Becker, Chairman and CEO of First Internet Bank, received the Leaders in Banking Excellence award from the Indiana Bankers Association for his contributions to the banking industry and community service. This prestigious recognition reflects collaborative successes at First Internet Bank, which has consistently grown since its inception as the first state-chartered, FDIC-insured institution operating exclusively online. As of June 30, 2021, the bank's assets stood at $4.2 billion.
First Internet Bancorp (Nasdaq: INBK) announced the completion of a $60 million private placement of 3.75% fixed-to-floating rate subordinated notes due 2031. The notes will have a fixed interest rate for the first five years, transitioning to a floating rate thereafter. The proceeds will be used for general corporate purposes, including potential debt redemption. The notes qualify as Tier 2 capital, enhancing regulatory capital measures. Piper Sandler & Co. acted as placement agent. The notes are not insured by the FDIC and were not registered under the Securities Act.
First Internet Bancorp (Nasdaq: INBK) reported strong financial results for Q2 2021, with net income rising to $13.1 million ($1.31 EPS) compared to $10.5 million ($1.05 EPS) in Q1 2021 and $3.9 million ($0.40 EPS) in Q2 2020. The bank's net interest income grew to $21.6 million, driven by margin expansion and controlled expenses. Credit quality improved, with nonperforming loans down to 0.31%. The company also saw increases in noninterest income, primarily from gains on loan sales and property sales. Total loans decreased 3.3% from the previous quarter, while total shareholders’ equity rose 4.1%.
First Internet Bancorp (Nasdaq: INBK) has announced plans to release its second quarter 2021 financial results after market close on July 21, 2021. A conference call to discuss these results is scheduled for July 22, 2021, at 12:00 p.m. Eastern Time. The Company, which had assets of $4.2 billion as of March 31, 2021, specializes in branchless banking services, offering a range of consumer and commercial banking products. Investors can access the call via phone or webcast, with replay options available.
First Internet Bank has appointed two new Business Development Officers, Melissa Fenner and Mike Pedicelli, to strengthen its Small Business Administration (SBA) Lending team. With over 20 years of experience, Fenner and her previous roles at Fifth Third, Wells Fargo, and Huntington, along with Pedicelli's 15 years in the financial sector, aim to enhance access to capital for small business owners. Vice President Mark Gibson emphasizes their expertise will aid both new and existing customers in navigating the SBA lending process.
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