Attached files
| file | filename |
|---|---|
| 8-K - 8-K - First Internet Bancorp | inbk-2q2015xer8xk.htm |
First Internet Bancorp Reports Another Quarterly Net Income Record
Quarterly earnings per share of $0.50, up 8.7% from first quarter 2015
and up 127.3% from second quarter 2014
Indianapolis, Indiana, July 23, 2015 - First Internet Bancorp (NASDAQ: INBK), the parent company of First Internet Bank (www.firstib.com), announced today financial and operational results for the second quarter 2015. Second quarter net income was a record $2.3 million and diluted earnings per share were $0.50. This compares with first quarter net income of $2.1 million and diluted earnings per share of $0.46 and second quarter 2014 net income of $1.0 million and diluted earnings per share of $0.22.
David Becker, Chairman, President and Chief Executive Officer, commented, “We have now produced five consecutive quarters of earnings growth. What’s more, our second quarter results exceeded the record net income we reported in the prior quarter.
“We continued to achieve our objective of expanding our balance sheet to realize economies of scale, and - once again - net interest income was the fundamental driver of our results. We successfully bolstered our diversified loan portfolio. In spite of an elevated level of early paydowns and a competitive market, our commercial lending teams delivered another solid performance in the second quarter. Going into the third quarter, our commercial pipelines remain strong. Consumer loan activity picked up in the second quarter as well. Credit quality was exceptional across all facets of our lending units.
“Through strategic growth and disciplined expense management, we demonstrated our commitment to improved profitability. Our lines of business are performing well and providing exemplary service to our geographically disperse customer base. I am particularly proud of our second quarter results.”
Highlights for the second quarter 2015 included:
▪ | Diluted earnings per share increased $0.04, or 8.7%, compared to the linked quarter and $0.28, or 127.3%, compared to the second quarter 2014. During the second quarter, the Company recognized $0.2 million of pre-tax expenses and asset writedowns associated with staffing-related changes which negatively impacted diluted earnings per share by $0.02. |
▪ | Improved quarterly performance |
• | Return on average assets of 0.84%; 0.87% as adjusted for the items noted above |
• | Return on average shareholders’ equity of 9.15%; 9.56% as adjusted for the items noted above |
• | Return on average tangible common equity of 9.60%; 10.03% as adjusted for the items noted above |
▪ | Continued strong growth in net interest income, increasing $0.8 million, or 11.8%, compared to the linked quarter and $2.2 million, or 40.9%, compared to the second quarter 2014 |
▪ | Total loan growth of $46.6 million, or 6.1%, compared to March 31, 2015 and $182.6 million, or 28.9%, compared to June 30, 2014 |
• | Strong performance in single tenant lease financing with balances increasing 23.2% compared to the linked quarter and 95.0% year-over-year |
• | Continued growth in C&I / owner-occupied CRE loans, increasing 5.2% on a combined basis compared to the linked quarter and 30.5% compared to June 30, 2014 |
• | Quarterly loan growth was enhanced by performance in consumer lending as trailer and recreational vehicle balances increased 6.1%, on a combined basis |
▪ | Net interest margin (“NIM”) increased to 2.87%, or 3 bps, compared to the linked quarter and 26 bps compared to the second quarter 2014 |
▪ | Capital levels remain solid and continue to support loan growth |
• | Tangible common equity to tangible assets of 8.66% |
• | Common equity tier 1 capital ratio of 11.12% |
• | Tier 1 capital ratio of 11.12% |
• | Total risk-based capital ratio of 12.28% |
▪ | Asset quality remains strong |
• | Nonperforming loans to total loans receivable declined to 0.02% from 0.03% as of March 31, 2015 and 0.19% as of June 30, 2014 |
• | Recognized net recoveries to average loans receivable of 0.20% during the second quarter |
Net Interest Income and Net Interest Margin
Net interest income for the second quarter was $7.6 million compared to $6.8 million for the first quarter and $5.4 million for the second quarter 2014. Compared to the linked quarter, total interest income increased $0.9 million, or 10.3%, and total interest expense increased $0.1 million, or 6.0%. The increase in total interest income was driven by a $41.9 million, or 5.6%, increase in average loans receivable and a $36.6 million, or 25.2%, increase in average investment balances. Additionally, compared to the linked quarter the yield earned on the loan portfolio, including mortgage loans held for sale, increased 3 bps and the yield earned on the investment portfolio increased 19 bps.
The increase in interest expense during the quarter was due to a $60.8 million, or 8.0%, increase in average interest-bearing deposit balances. Partially offsetting the impact of higher interest expense associated with increased deposit balances was a decline in expense related to other borrowings, due primarily to a lower cost of funds related to Federal Home Loan Bank advances.
Net interest margin was 2.87% for the second quarter compared to 2.84% for the first quarter and 2.61% for the second quarter 2014. The yield on interest-earning assets for the second quarter was 3.85%, which was consistent with the linked quarter. However, excluding the impact of interest income associated with a loan recovery in the first quarter, the yield on interest-earning assets increased 6 bps during the second quarter, driven by higher yields earned on commercial loans and investment securities. The cost of interest-bearing liabilities for the second quarter declined 5 bps compared to the linked quarter due to the lower cost of funds related to Federal Home Loan Bank advances.
Noninterest Income
Noninterest income for the second quarter was $2.5 million compared to $3.1 million for the first quarter and $1.6 million for the second quarter 2014. The decrease of $0.7 million, or 21.3%, compared to the linked quarter was driven by a decline of $0.7 million, or 23.3%, in mortgage banking revenue resulting primarily from lower origination volumes.
Noninterest Expense
Noninterest expense for the second quarter was $6.3 million compared to $6.2 million for the first quarter and $5.6 million for the second quarter 2014. The increase of $0.1 million, or 1.1%, compared to the linked quarter was due to higher salaries and employee benefits and premises and equipment expenses, partially offset by lower marketing expenses, consulting and professional fees and other expenses. Excluding the expense impact of the staffing-related changes noted above, salaries and employee benefits increased $0.1 million, or 2.0%, and total noninterest expense declined $0.1 million, or 1.2%, compared to the linked quarter.
Income Taxes
Income tax expense was $1.2 million for the second quarter, resulting in an effective tax rate of 33.7%, compared to $1.2 million and an effective tax rate of 36.0% for the linked quarter and $0.5 million and an effective tax rate of 35.2% for the second quarter 2014. The decrease in the effective tax rate compared to the linked quarter was due primarily to additional income tax expense associated with the vesting of certain equity compensation awards recognized in the first quarter.
Loans and Credit Quality
Total loans as of June 30, 2015 were $814.2 million, increasing $46.6 million, or 6.1%, compared to March 31, 2015 and $182.6 million, or 28.9%, compared to June 30, 2014. Total commercial loan balances were $448.9 million, increasing $54.0 million, or 13.7%, compared to the linked quarter and $163.9 million, or 57.5%, compared to June 30, 2014. Continued strong production in single tenant lease financing balances contributed significantly to the growth as balances increased $52.7 million, or 23.2%, compared to the first quarter and $136.3 million, or 95.0%, compared to the second quarter 2014. Commercial and industrial and owner-occupied commercial real estate production was solid as balances increased $6.3 million on a combined basis, or 5.2%, compared to the linked quarter and $30.1 million, or 30.5%, compared to June 30, 2014. Also contributing to quarterly growth was increased production in consumer lending as balances for trailers and recreational vehicles increased $5.8 million, or 6.1%, on a combined basis.
Credit quality continues to remain strong as nonperforming loans to total loans receivable declined to 0.02% as of June 30, 2015 from 0.03% as of March 31, 2015 and 0.19% as of June 30, 2014. Additionally, nonperforming assets to total assets declined to 0.43% as of June 30, 2015 from 0.47% as of March 31, 2015 and 0.69% as of June 30, 2014. The allowance for loan losses was $7.1 million as of June 30, 2015 compared to $6.4 million as of March 31, 2015 and $5.1 million as of June 30, 2014. The allowance as a percentage of total nonperforming loans increased to 3,762.2% as of June 30, 2015 from 2,592.7% as of March 31, 2015 and 436.7% as of June 30, 2014. The allowance as a percentage of total loans receivable increased to 0.87% as of June 30, 2015 compared to 0.83% as of March 31, 2015 and 0.81% as of June 30, 2014.
Net recoveries of $0.4 million were recognized during the second quarter, resulting in net recoveries to average loans of 0.20% compared to net recoveries to average loans of 0.07% for the first quarter and net charge-offs to average loans of 0.12% for the second quarter 2014. The net recoveries during the second quarter were driven primarily by a $0.5 million recovery of a commercial real estate loan that had been previously charged-off.
Capital
During the second quarter, total shareholders’ equity increased $0.5 million due primarily to net income earned during the quarter, partially offset by the change in the unrealized gain/loss related to the investment portfolio and declared dividends. As of June 30, 2015, the Company’s common equity tier 1, tier 1 and total risk-based capital ratios declined to 11.12%, 11.12% and 12.28% from 11.99%, 11.99% and 13.18% as of March 31, 2015, respectively, due to an increase in risk-weighted assets resulting primarily from the commercial and consumer loan growth for the quarter. Tangible common equity to tangible assets declined 52 bps during the second quarter to 8.66% due primarily to strong asset growth while tangible book value per share increased to $21.23 as of June 30, 2015 from $21.11 as of March 31, 2015.
About First Internet Bancorp
First Internet Bancorp is the parent company of First Internet Bank, which opened for business in 1999 as the nation’s first state-chartered, FDIC-insured institution to operate solely via the Internet. With customers in all 50 states, First Internet Bank offers consumers services including checking, savings, money market, certificates of deposit and IRA accounts as well as consumer loans, residential mortgages, residential construction loans and home equity products. For commercial clients, it provides commercial real estate loans, commercial and industrial loans and treasury management services. First Internet Bank has been recognized as one of the “Best Banks to Work For” by American Banker Magazine as well as a “Top Workplace” by The Indianapolis Star. 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.
Safe Harbor Statement
This press release may contain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” 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. Factors that may cause such differences include: failures of or interruptions in the communications and information systems on which we rely to conduct our business; our plans to grow our commercial real estate and commercial and industrial 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 SEC. 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, average tangible common equity, return on average tangible common equity, tangible common equity to tangible assets, adjusted return on average assets, adjusted return on average shareholders’ equity and adjusted return on average tangible common equity are used by the Company’s management to measure the strength of its capital and its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures provide 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.”
Contact Information: | |||
Investors/Analysts | Media | ||
Paula Deemer | Nicole Lorch | ||
(317) 428-4628 | Senior Vice President, Retail Banking | ||
investors@firstib.com | (317) 532-7906 | ||
nlorch@firstib.com | |||
First Internet Bancorp | ||||||||||||||||||||
Summary Financial Information (unaudited) | ||||||||||||||||||||
Amounts in thousands, except per share data | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||||||
Net income | $ | 2,265 | $ | 2,063 | $ | 977 | $ | 4,328 | $ | 1,577 | ||||||||||
Per share and share information | ||||||||||||||||||||
Earnings per share - basic | $ | 0.50 | $ | 0.46 | $ | 0.22 | $ | 0.96 | $ | 0.35 | ||||||||||
Earnings per share - diluted | 0.50 | 0.46 | 0.22 | 0.95 | 0.35 | |||||||||||||||
Dividends declared per share | 0.06 | 0.06 | 0.06 | 0.12 | 0.12 | |||||||||||||||
Book value per common share | 22.28 | 22.16 | 21.25 | 22.28 | 21.25 | |||||||||||||||
Tangible book value per common share | 21.23 | 21.11 | 20.19 | 21.23 | 20.19 | |||||||||||||||
Common shares outstanding | 4,484,513 | 4,484,513 | 4,449,619 | 4,484,513 | 4,449,619 | |||||||||||||||
Average common shares outstanding: | ||||||||||||||||||||
Basic | 4,529,823 | 4,516,776 | 4,496,219 | 4,523,336 | 4,495,449 | |||||||||||||||
Diluted | 4,550,034 | 4,523,246 | 4,504,302 | 4,536,736 | 4,503,010 | |||||||||||||||
Performance ratios | ||||||||||||||||||||
Return on average assets | 0.84 | % | 0.84 | % | 0.45 | % | 0.84 | % | 0.38 | % | ||||||||||
Return on average shareholders' equity | 9.15 | % | 8.55 | % | 4.23 | % | 8.85 | % | 3.45 | % | ||||||||||
Return on average tangible common equity | 9.60 | % | 8.98 | % | 4.46 | % | 9.29 | % | 3.63 | % | ||||||||||
Net interest margin | 2.87 | % | 2.84 | % | 2.61 | % | 2.86 | % | 2.56 | % | ||||||||||
Capital ratios 1 | ||||||||||||||||||||
Tangible common equity to tangible assets | 8.66 | % | 9.18 | % | 10.41 | % | 8.66 | % | 10.41 | % | ||||||||||
Tier 1 leverage ratio | 8.93 | % | 9.52 | % | 10.45 | % | 8.93 | % | 10.45 | % | ||||||||||
Common equity tier 1 capital ratio | 11.12 | % | 11.99 | % | 14.03 | % | 11.12 | % | 14.03 | % | ||||||||||
Tier 1 capital ratio | 11.12 | % | 11.99 | % | 14.03 | % | 11.12 | % | 14.03 | % | ||||||||||
Total risk-based capital ratio | 12.28 | % | 13.18 | % | 15.30 | % | 12.28 | % | 15.30 | % | ||||||||||
Asset quality | ||||||||||||||||||||
Nonperforming loans | $ | 188 | $ | 246 | $ | 1,177 | $ | 188 | $ | 1,177 | ||||||||||
Nonperforming assets | 4,765 | 4,818 | 5,961 | 4,765 | 5,961 | |||||||||||||||
Nonperforming loans to loans receivable | 0.02 | % | 0.03 | % | 0.19 | % | 0.02 | % | 0.19 | % | ||||||||||
Nonperforming assets to total assets | 0.43 | % | 0.47 | % | 0.69 | % | 0.43 | % | 0.69 | % | ||||||||||
Allowance for loan losses to: | ||||||||||||||||||||
Loans receivable | 0.87 | % | 0.83 | % | 0.81 | % | 0.87 | % | 0.81 | % | ||||||||||
Nonperforming loans | 3,762.2 | % | 2,592.7 | % | 436.7 | % | 3,762.2 | % | 436.7 | % | ||||||||||
Net charge-offs (recoveries) to average | ||||||||||||||||||||
loans receivable | (0.20 | )% | (0.07 | )% | 0.12 | % | (0.14 | )% | 0.13 | % | ||||||||||
Average balance sheet information | ||||||||||||||||||||
Loans receivable | $ | 787,339 | $ | 745,454 | $ | 562,624 | $ | 766,512 | $ | 539,414 | ||||||||||
Securities available for sale | 181,864 | 145,241 | 194,689 | 163,654 | 173,191 | |||||||||||||||
Other earning assets | 49,001 | 41,643 | 49,524 | 45,342 | 73,345 | |||||||||||||||
Total interest-earning assets | 1,056,485 | 967,186 | 824,752 | 1,012,082 | 805,734 | |||||||||||||||
Total assets | 1,085,118 | 995,851 | 862,110 | 1,040,731 | 840,560 | |||||||||||||||
Noninterest-bearing deposits | 20,697 | 22,265 | 18,821 | 21,477 | 18,492 | |||||||||||||||
Interest-bearing deposits | 822,735 | 761,917 | 708,668 | 792,494 | 694,395 | |||||||||||||||
Total deposits | 843,432 | 784,182 | 727,489 | 813,971 | 712,887 | |||||||||||||||
Shareholders' equity | 99,333 | 97,844 | 92,641 | 98,592 | 92,230 | |||||||||||||||
1 Regulatory capital ratios are preliminary pending filing of the Company's regulatory reports
First Internet Bancorp | ||||||||||||
Condensed Consolidated Balance Sheets (unaudited) | ||||||||||||
Amounts in thousands | ||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 1,713 | $ | 1,472 | $ | 1,926 | ||||||
Interest-bearing demand deposits | 28,889 | 38,100 | 18,718 | |||||||||
Interest-bearing time deposits | 1,250 | 2,000 | 2,000 | |||||||||
Securities available for sale, at fair value | 190,767 | 163,676 | 159,528 | |||||||||
Loans held-for-sale | 29,872 | 27,584 | 21,466 | |||||||||
Loans receivable | 814,243 | 767,682 | 631,678 | |||||||||
Allowance for loan losses | (7,073 | ) | (6,378 | ) | (5,140 | ) | ||||||
Net loans receivable | 807,170 | 761,304 | 626,538 | |||||||||
Accrued interest receivable | 3,550 | 3,040 | 2,694 | |||||||||
Federal Home Loan Bank of Indianapolis stock | 6,946 | 5,350 | 2,943 | |||||||||
Cash surrender value of bank-owned life insurance | 12,524 | 12,423 | 12,128 | |||||||||
Premises and equipment, net | 8,120 | 7,040 | 7,133 | |||||||||
Goodwill | 4,687 | 4,687 | 4,687 | |||||||||
Other real estate owned | 4,488 | 4,488 | 4,664 | |||||||||
Accrued income and other assets | 4,669 | 4,513 | 3,682 | |||||||||
Total assets | $ | 1,104,645 | $ | 1,035,677 | $ | 868,107 | ||||||
Liabilities | ||||||||||||
Non-interest bearing deposits | $ | 20,994 | $ | 19,178 | $ | 19,065 | ||||||
Interest-bearing deposits | 835,509 | 801,991 | 725,108 | |||||||||
Total deposits | 856,503 | 821,169 | 744,173 | |||||||||
Advances from Federal Home Loan Bank | 140,935 | 106,921 | 21,845 | |||||||||
Subordinated debt | 2,915 | 2,894 | 2,831 | |||||||||
Accrued interest payable | 108 | 104 | 96 | |||||||||
Accrued expenses and other liabilities | 4,276 | 5,227 | 4,628 | |||||||||
Total liabilities | 1,004,737 | 936,315 | 773,573 | |||||||||
Shareholders' equity | ||||||||||||
Voting common stock | 72,218 | 72,032 | 71,509 | |||||||||
Retained earnings | 28,928 | 26,938 | 22,938 | |||||||||
Accumulated other comprehensive income (loss) | (1,238 | ) | 392 | 87 | ||||||||
Total shareholders' equity | 99,908 | 99,362 | 94,534 | |||||||||
Total liabilities and shareholders' equity | $ | 1,104,645 | $ | 1,035,677 | $ | 868,107 | ||||||
First Internet Bancorp | |||||||||||||||||||
Condensed Consolidated Statements of Income (unaudited) | |||||||||||||||||||
Amounts in thousands, except per share data | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||||||
Interest income | |||||||||||||||||||
Loans | $ | 9,043 | $ | 8,390 | $ | 6,571 | $ | 17,433 | $ | 12,700 | |||||||||
Securities - taxable | 945 | 722 | 987 | 1,667 | 1,736 | ||||||||||||||
Securities - non-taxable | 59 | — | — | 59 | 58 | ||||||||||||||
Other earning assets | 83 | 75 | 54 | 158 | 151 | ||||||||||||||
Total interest income | 10,130 | 9,187 | 7,612 | 19,317 | 14,645 | ||||||||||||||
Interest expense | |||||||||||||||||||
Deposits | 2,137 | 1,953 | 1,922 | 4,090 | 3,782 | ||||||||||||||
Other borrowed funds | 421 | 460 | 317 | 881 | 624 | ||||||||||||||
Total interest expense | 2,558 | 2,413 | 2,239 | 4,971 | 4,406 | ||||||||||||||
Net interest income | 7,572 | 6,774 | 5,373 | 14,346 | 10,239 | ||||||||||||||
Provision for loan losses | 304 | 442 | (73 | ) | 746 | 74 | |||||||||||||
Net interest income after provision for loan losses | 7,268 | 6,332 | 5,446 | 13,600 | 10,165 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges and fees | 193 | 176 | 187 | 369 | 354 | ||||||||||||||
Mortgage banking activities | 2,214 | 2,886 | 1,229 | 5,100 | 2,129 | ||||||||||||||
Gain on sale of securities | — | — | 125 | — | 484 | ||||||||||||||
Loss on asset disposals | (33 | ) | (14 | ) | (18 | ) | (47 | ) | (31 | ) | |||||||||
Other | 102 | 100 | 99 | 202 | 197 | ||||||||||||||
Total noninterest income | 2,476 | 3,148 | 1,622 | 5,624 | 3,133 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 3,787 | 3,578 | 2,948 | 7,365 | 5,955 | ||||||||||||||
Marketing, advertising and promotion | 334 | 452 | 387 | 786 | 767 | ||||||||||||||
Consulting and professional fees | 564 | 592 | 465 | 1,156 | 898 | ||||||||||||||
Data processing | 233 | 248 | 239 | 481 | 473 | ||||||||||||||
Loan expenses | 181 | 181 | 136 | 362 | 250 | ||||||||||||||
Premises and equipment | 691 | 642 | 761 | 1,333 | 1,462 | ||||||||||||||
Deposit insurance premium | 160 | 150 | 138 | 310 | 282 | ||||||||||||||
Other | 377 | 414 | 486 | 791 | 911 | ||||||||||||||
Total noninterest expense | 6,327 | 6,257 | 5,560 | 12,584 | 10,998 | ||||||||||||||
Income before income taxes | 3,417 | 3,223 | 1,508 | 6,640 | 2,300 | ||||||||||||||
Income tax provision | 1,152 | 1,160 | 531 | 2,312 | 723 | ||||||||||||||
Net income | $ | 2,265 | $ | 2,063 | $ | 977 | $ | 4,328 | $ | 1,577 | |||||||||
Per common share data | |||||||||||||||||||
Earnings per share - basic | $ | 0.50 | $ | 0.46 | $ | 0.22 | $ | 0.96 | $ | 0.35 | |||||||||
Earnings per share - diluted | $ | 0.50 | $ | 0.46 | $ | 0.22 | $ | 0.95 | $ | 0.35 | |||||||||
Dividends declared per share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.12 | $ | 0.12 | |||||||||
All periods presented have been reclassified to conform to the current period classification.
First Internet Bancorp | ||||||||||||||||||||||||||||||||
Average Balances and Rates (unaudited) | ||||||||||||||||||||||||||||||||
Amounts in thousands | ||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | ||||||||||||||||||||||||||||||
Average Balance | Interest/Dividends | Yield/ Cost | Average Balance | Interest/Dividends | Yield/ Cost | Average Balance | Interest/Dividends | Yield/ Cost | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Interest-earning assets | ||||||||||||||||||||||||||||||||
Loans, including loans held-for-sale | $ | 825,620 | $ | 9,043 | 4.39 | % | $ | 780,302 | $ | 8,390 | 4.36 | % | $ | 580,539 | $ | 6,571 | 4.54 | % | ||||||||||||||
Securities - taxable | 174,057 | 945 | 2.18 | % | 145,241 | 722 | 2.02 | % | 194,689 | 987 | 2.03 | % | ||||||||||||||||||||
Securities - non-taxable | 7,807 | 59 | 3.03 | % | — | — | 0.00 | % | — | — | 0.00 | % | ||||||||||||||||||||
Other earning assets | 49,001 | 83 | 0.68 | % | 41,643 | 75 | 0.73 | % | 49,524 | 54 | 0.44 | % | ||||||||||||||||||||
Total interest-earning assets | 1,056,485 | 10,130 | 3.85 | % | 967,186 | 9,187 | 3.85 | % | 824,752 | 7,612 | 3.70 | % | ||||||||||||||||||||
Allowance for loan losses | (6,545 | ) | (5,883 | ) | (5,450 | ) | ||||||||||||||||||||||||||
Noninterest earning-assets | 35,178 | 34,548 | 42,808 | |||||||||||||||||||||||||||||
Total assets | $ | 1,085,118 | $ | 995,851 | $ | 862,110 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||||||||
Regular savings accounts | $ | 23,873 | $ | 34 | 0.57 | % | $ | 22,099 | $ | 32 | 0.59 | % | $ | 19,023 | $ | 29 | 0.61 | % | ||||||||||||||
Interest-bearing demand deposits | 76,095 | 104 | 0.55 | % | 75,405 | 102 | 0.55 | % | 72,519 | 99 | 0.55 | % | ||||||||||||||||||||
Money market accounts | 282,015 | 503 | 0.72 | % | 274,312 | 492 | 0.73 | % | 267,232 | 486 | 0.73 | % | ||||||||||||||||||||
Certificates and brokered deposits | 440,752 | 1,496 | 1.36 | % | 390,101 | 1,327 | 1.38 | % | 349,894 | 1,308 | 1.50 | % | ||||||||||||||||||||
Total interest-bearing deposits | 822,735 | 2,137 | 1.04 | % | 761,917 | 1,953 | 1.04 | % | 708,668 | 1,922 | 1.09 | % | ||||||||||||||||||||
Other borrowed funds | 137,421 | 421 | 1.23 | % | 109,787 | 460 | 1.70 | % | 34,538 | 317 | 3.68 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 960,156 | 2,558 | 1.07 | % | 871,704 | 2,413 | 1.12 | % | 743,206 | 2,239 | 1.21 | % | ||||||||||||||||||||
Noninterest-bearing deposits | 20,697 | 22,265 | 18,821 | |||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 4,932 | 4,038 | 7,442 | |||||||||||||||||||||||||||||
Total liabilities | 985,785 | 898,007 | 769,469 | |||||||||||||||||||||||||||||
Shareholders' equity | 99,333 | 97,844 | 92,641 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,085,118 | $ | 995,851 | $ | 862,110 | ||||||||||||||||||||||||||
Net interest income | $ | 7,572 | $ | 6,774 | $ | 5,373 | ||||||||||||||||||||||||||
Interest rate spread | 2.78 | % | 2.73 | % | 2.49 | % | ||||||||||||||||||||||||||
Net interest margin | 2.87 | % | 2.84 | % | 2.61 | % | ||||||||||||||||||||||||||
First Internet Bancorp | |||||||||||||||||||||
Average Balances and Rates (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||
June 30, 2015 | June 30, 2014 | ||||||||||||||||||||
Average Balance | Interest/Dividends | Yield/Cost | Average Balance | Interest/Dividends | Yield/Cost | ||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||
Loans, including loans held for sale | $ | 803,086 | $ | 17,433 | 4.38 | % | $ | 559,198 | $ | 12,700 | 4.58 | % | |||||||||
Securities - taxable | 159,729 | 1,667 | 2.10 | % | 169,591 | 1,736 | 2.06 | % | |||||||||||||
Securities - non-taxable | 3,925 | 59 | 3.03 | % | 3,600 | 58 | 3.25 | % | |||||||||||||
Other earning assets | 45,342 | 158 | 0.70 | % | 73,345 | 151 | 0.42 | % | |||||||||||||
Total interest-earning assets | 1,012,082 | 19,317 | 3.85 | % | 805,734 | 14,645 | 3.67 | % | |||||||||||||
Allowance for loan losses | (6,215 | ) | (5,436 | ) | |||||||||||||||||
Noninterest earning-assets | 34,864 | 40,262 | |||||||||||||||||||
Total assets | $ | 1,040,731 | $ | 840,560 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Regular savings accounts | $ | 22,991 | $ | 66 | 0.58 | % | $ | 18,784 | $ | 56 | 0.60 | % | |||||||||
Interest-bearing demand deposits | 75,752 | 206 | 0.55 | % | 71,439 | 194 | 0.55 | % | |||||||||||||
Money market accounts | 278,185 | 995 | 0.72 | % | 265,119 | 961 | 0.73 | % | |||||||||||||
Certificates and brokered deposits | 415,566 | 2,823 | 1.37 | % | 339,053 | 2,571 | 1.53 | % | |||||||||||||
Total interest-bearing deposits | 792,494 | 4,090 | 1.04 | % | 694,395 | 3,782 | 1.10 | % | |||||||||||||
Other borrowed funds | 123,680 | 881 | 1.44 | % | 29,873 | 624 | 4.21 | % | |||||||||||||
Total interest-bearing liabilities | 916,174 | 4,971 | 1.09 | % | 724,268 | 4,406 | 1.23 | % | |||||||||||||
Noninterest-bearing deposits | 21,477 | 18,492 | |||||||||||||||||||
Other noninterest-bearing liabilities | 4,488 | 5,570 | |||||||||||||||||||
Total liabilities | 942,139 | 748,330 | |||||||||||||||||||
Shareholders' equity | 98,592 | 92,230 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,040,731 | $ | 840,560 | |||||||||||||||||
Net interest income | $ | 14,346 | $ | 10,239 | |||||||||||||||||
Interest rate spread | 2.76 | % | 2.44 | % | |||||||||||||||||
Net interest margin | 2.86 | % | 2.56 | % | |||||||||||||||||
First Internet Bancorp | |||||||||||||||||||||
Loans and Deposits (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Commercial loans | |||||||||||||||||||||
Commercial and industrial | $ | 89,316 | 11.0 | % | $ | 83,849 | 11.0 | % | $ | 71,997 | 11.4 | % | |||||||||
Owner-occupied commercial real estate | 39,405 | 4.8 | % | 38,536 | 5.0 | % | 26,629 | 4.2 | % | ||||||||||||
Investor commercial real estate | 20,163 | 2.5 | % | 18,491 | 2.4 | % | 18,467 | 2.9 | % | ||||||||||||
Construction | 20,155 | 2.5 | % | 26,847 | 3.5 | % | 24,371 | 3.9 | % | ||||||||||||
Single tenant lease financing | 279,891 | 34.4 | % | 227,229 | 29.6 | % | 143,547 | 22.7 | % | ||||||||||||
Total commercial loans | 448,930 | 55.2 | % | 394,952 | 51.5 | % | 285,011 | 45.1 | % | ||||||||||||
Consumer loans | |||||||||||||||||||||
Residential mortgage | 207,703 | 25.5 | % | 215,910 | 28.1 | % | 175,114 | 27.7 | % | ||||||||||||
Home equity | 49,662 | 6.1 | % | 54,838 | 7.2 | % | 63,725 | 10.1 | % | ||||||||||||
Trailers | 66,080 | 8.1 | % | 63,638 | 8.3 | % | 66,456 | 10.5 | % | ||||||||||||
Recreational vehicles | 34,366 | 4.2 | % | 31,023 | 4.0 | % | 32,882 | 5.2 | % | ||||||||||||
Other consumer loans | 2,711 | 0.3 | % | 2,531 | 0.3 | % | 3,505 | 0.6 | % | ||||||||||||
Total consumer loans | 360,522 | 44.2 | % | 367,940 | 47.9 | % | 341,682 | 54.1 | % | ||||||||||||
Net deferred loan fees, premiums and discounts | 4,791 | 0.6 | % | 4,790 | 0.6 | % | 4,985 | 0.8 | % | ||||||||||||
Total loans receivable | $ | 814,243 | 100.0 | % | $ | 767,682 | 100.0 | % | $ | 631,678 | 100.0 | % | |||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Deposits | |||||||||||||||||||||
Regular savings accounts | $ | 24,405 | 2.8 | % | $ | 23,367 | 2.8 | % | $ | 16,861 | 2.3 | % | |||||||||
Noninterest-bearing deposits | 20,994 | 2.5 | % | 19,178 | 2.3 | % | 19,065 | 2.5 | % | ||||||||||||
Interest-bearing demand deposits | 77,822 | 9.1 | % | 82,982 | 10.1 | % | 73,843 | 9.9 | % | ||||||||||||
Money market accounts | 278,791 | 32.5 | % | 280,740 | 34.2 | % | 267,854 | 36.0 | % | ||||||||||||
Certificates of deposits | 440,936 | 51.5 | % | 401,347 | 48.9 | % | 348,752 | 46.9 | % | ||||||||||||
Brokered deposits | 13,555 | 1.6 | % | 13,555 | 1.7 | % | 17,798 | 2.4 | % | ||||||||||||
Total deposits | $ | 856,503 | 100.0 | % | $ | 821,169 | 100.0 | % | $ | 744,173 | 100.0 | % | |||||||||
First Internet Bancorp | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
Amounts in thousands, except per share data | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||||||
Total equity - GAAP | $ | 99,908 | $ | 99,362 | $ | 94,534 | $ | 99,908 | $ | 94,534 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible common equity | $ | 95,221 | $ | 94,675 | $ | 89,847 | $ | 95,221 | $ | 89,847 | ||||||||||
Total assets - GAAP | $ | 1,104,645 | $ | 1,035,677 | $ | 868,107 | $ | 1,104,645 | $ | 868,107 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible assets | $ | 1,099,958 | $ | 1,030,990 | $ | 863,420 | $ | 1,099,958 | $ | 863,420 | ||||||||||
Common shares outstanding | 4,484,513 | 4,484,513 | 4,449,619 | 4,484,513 | 4,449,619 | |||||||||||||||
Book value per common share | $ | 22.28 | $ | 22.16 | $ | 21.25 | $ | 22.28 | $ | 21.25 | ||||||||||
Effect of goodwill | (1.05 | ) | (1.05 | ) | (1.06 | ) | (1.05 | ) | (1.06 | ) | ||||||||||
Tangible book value per common share | $ | 21.23 | $ | 21.11 | $ | 20.19 | $ | 21.23 | $ | 20.19 | ||||||||||
Total shareholders' equity to assets ratio | 9.04 | % | 9.59 | % | 10.89 | % | 9.04 | % | 10.89 | % | ||||||||||
Effect of goodwill | (0.38 | )% | (0.41 | )% | (0.48 | )% | (0.38 | )% | (0.48 | )% | ||||||||||
Tangible common equity to tangible assets ratio | 8.66 | % | 9.18 | % | 10.41 | % | 8.66 | % | 10.41 | % | ||||||||||
Total average equity - GAAP | $ | 99,333 | $ | 97,844 | $ | 92,641 | $ | 98,592 | $ | 92,230 | ||||||||||
Adjustments: | ||||||||||||||||||||
Average goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Average tangible common equity | $ | 94,646 | $ | 93,157 | $ | 87,954 | $ | 93,905 | $ | 87,543 | ||||||||||
Return on average shareholders' equity | 9.15 | % | 8.55 | % | 4.23 | % | 8.85 | % | 3.45 | % | ||||||||||
Effect of goodwill | 0.45 | % | 0.43 | % | 0.23 | % | 0.44 | % | 0.18 | % | ||||||||||
Return on average tangible common equity | 9.60 | % | 8.98 | % | 4.46 | % | 9.29 | % | 3.63 | % | ||||||||||
First Internet Bancorp | |||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||
Amounts in thousands, except per share data | |||||||||||
Three Months Ended | |||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | |||||||||
Net income - GAAP | $ | 2,265 | $ | 2,063 | $ | 977 | |||||
Adjustments: | |||||||||||
Expenses and asset writedowns associated with staffing-related changes1 | 102 | — | — | ||||||||
Net income - adjusted | $ | 2,367 | $ | 2,063 | $ | 977 | |||||
Return on average assets - GAAP | 0.84 | % | 0.84 | % | 0.45 | % | |||||
Effect of adjustments | 0.03 | % | — | — | |||||||
Return on average assets - adjusted | 0.87 | % | 0.84 | % | 0.45 | % | |||||
Return on average shareholders' equity - GAAP | 9.15 | % | 8.55 | % | 4.23 | % | |||||
Effect of adjustments | 0.41 | % | — | — | |||||||
Return on average shareholders' equity - adjusted | 9.56 | % | 8.55 | % | 4.23 | % | |||||
Return on average tangible common equity | 9.60 | % | 8.98 | % | 4.46 | % | |||||
Effect of adjustments | 0.43 | % | — | — | |||||||
Return on average tangible common equity - adjusted | 10.03 | % | 8.98 | % | 4.46 | % | |||||
1Effective tax rate of 35.6% applied.