First Internet Bancorp · NASDAQ:INBK

First Internet Bancorp — Q1 2022 Earnings Presentation

31 slides from First Internet Bancorp's earnings presentation, Apr 20, 2022

  1. Slide 1: Financial Results First Quarter 2022

    Financial Results First Quarter 2022 Exhibit 99.2

  2. Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures

    Forward-Looking Statements & Non-GAAP Financial Measures This presentation 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 compl

  3. Slide 3: First Quarter 2022 Highlights

    First Quarter 2022 Highlights 3 Loans and Deposits  Total portfolio loan balances declined 0.2% from 4Q21  Growth in franchise finance, construction and consumer lending portfolios  Demand deposit, BaaS, savings and money market balances increased 7.2% from 4Q21 while CD and brokered deposit bala

  4. Slide 4: Loan Portfolio Overview

    Loan Portfolio Overview 4 Loan Portfolio Mix 1 1 Percentages may not add up to 100% due to rounding 2 Includes commercial and industrial and owner-occupied commercial real estate balances Dollars in millions 2  Total loan portfolio balances declined 0.2% from 4Q21 and 5.8% from 1Q21  Commercial lo

  5. Slide 5: Deposit Composition

    Deposit Composition 5 Total Non-Maturity Deposits - $2.0B as of 3/31/221 Dollars in millions Total Deposits - $3.2B as of 3/31/22 Dollars in millions  Total deposits increased $39.0 million, or 1.2%, compared to 4Q21, and were consistent with 1Q21  Deposit growth includes $50.0 million of low cost

  6. Slide 6: Net Interest Income and Net Interest Margin

    Net Interest Income and Net Interest Margin  Net interest income – FTE was up 8.9% over 4Q21  Higher interest income was driven mainly by income from tax refund advance loans and securities yields, partially offset by lower loan fees  Interest expense on deposits continued to decline as higher co

  7. Slide 7: Net Interest Margin Drivers

    Net Interest Margin Drivers 7 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix NIM – FTE1 Linked-Quarter Change Monthly Rate Paid on Interest-Bearing Deposits 2.25% 2.21%  Linked-quarter NIM and FTE NIM increased 26 bps, driven by income from tax refund advance loans as well as h

  8. Slide 8: Noninterest Income

    $8.4 $6.4 $7.8 $7.7 $6.8 $9.0 1Q21 2Q21 3Q21 4Q21 1Q22 Core Gain on sale of premises and equipment Noninterest Income 8 Dollars in millions Noninterest Income 1Q22 Dollars in millions Noninterest Income 1 Noninterest income includes a $2.5 million gain on sale of premises and equipment; see Reconcil

  9. Slide 9: Noninterest Expense

    1.49% 1.44% 1.34% 1.61% 1.81% 1Q21 2Q21 3Q21 4Q21 1Q22 Core Non-core items 2 $15.3 $15.1 $14.5 $17.0 $18.8 $16.3 $- $5.0 $10.0 $15.0 $20.0 1Q21 2Q21 3Q21 4Q21 1Q22 Core Non-core items $17.7 2 Noninterest Expense 9 1 1 4Q21 noninterest expense includes a $0.5 million IT contract termination fee and $

  10. Slide 10: Asset Quality

    Asset Quality  Allowance for loan losses to total loans of 0.98% in 1Q22, both including and excluding PPP loans1  Quarterly provision for loan losses was $0.8 million, compared to a benefit of $0.2 million in 4Q21 and a provision of $1.3 million in 1Q21; 1Q22 includes $1.8 million of provision re

  11. Slide 11: Capital

    Capital  Tangible common equity to tangible assets ratio declined 16 bps to 8.77%1  Tangible book value per share of $38.21, down 0.8% from 4Q211  Tangible common equity and book value were negatively impacted by the effect of rising interest rates on the available-for-sale securities portfolio 

  12. Slide 12: Positioned for an Increasing Interest Rate Cycle

    Positioned for an Increasing Interest Rate Cycle 12  Improved deposit composition – Larger percentage of non-maturity deposits (“NMD”) compared to the beginning of the last rate tightening cycle – NMD products experienced lower betas in prior cycle – Fintech/BaaS initiatives will bring funding dive

  13. Slide 13: Small Business Lending

    23% 19% 18% 9% 7% 24% Accommodation and Food Services Services Retail Trade Manufacturing Real Estate and Rental and Leasing Other 20% 18% 11%9%8% 8% 26% IN IL MI FL CA TX Other Small Business Lending  $97.0 million in balances as of March 31, 2022  Current balance of $1.0 million outstanding unde

  14. Slide 14: Franchise Finance

    23% 11% 8% 6%5%4%4% 38% TX CA GA AZ PA MI NJ Other Franchise Finance  $107.2 million in balances as of March 31, 2022  Lending activity focused on providing growth financing to franchisees in various industry segments  Origination volumes expected to be in the range of $150 million in 2022  Aver

  15. Slide 15: Construction and Investor Commercial Real Estate

    29% 19% 11% 6% 5% 4% 7% Land Subdivision Hotels (except Casino Hotels) and Motels Lessors of Nonresidential Buildings Continuing Care Retirement Communities Medicinal and Botanical Manufacturing Assisted Living Facilities Other 54%30% 11% 4% 1% IN CA NY AZ Other 61% 16% 23% Commercial Construction/

  16. Slide 16: Single Tenant Lease Financing

    Single Tenant Lease Financing  $852.5 million in balances as of March 31, 2022  Long-term financing of single tenant properties occupied by historically strong national and regional tenants  Weighted-average portfolio LTV of 47%  Average loan size of $1.3 million 16 Portfolio Mix by Major Vertic

  17. Slide 17: Public Finance

    4% 2% 5% 4% 21% 7% 6% 3%2%1% 3% 42% AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 A-/A3 BBB+/Baa1 BBB/Baa2 BB+/Ba1 BB/Ba2 Non-Rated 32% 14% 14% 11% 6% 6% 4% 3% 3% 2% 5% General Obligation Essential use equipment loans Lease rental revenue Utilities Revenue Public higher ed facilities - Revenue Tax Incre

  18. Slide 18: Healthcare Finance

    29% 12% 5%5%4%4% 3% 38% CA TX NY FL AZ NJ WA Other 89% 7% 4% Dentists Veterinarians Other 78% 17% 4% 1% Practice Refi or Acquisition Owner Occupied CRE Project Equipment and Other Healthcare Finance  $354.6 million in balances as of March 31, 2022  Loan portfolio focused primarily on dental practi

  19. Slide 19: C&I and Owner-Occupied Commercial Real Estate

    22% 14% 13% 10% 9% 6% 26% Services Construction Manufacturing Real Estate and Rental and Leasing Retail Trade Arts, Entertainment, and Recreation Other 54% 25% 5% 2% 1% 13% IN AZ IL FL OH Other 50% 37% 13% C&I - Term Loans Owner Occupied CRE C&I - Lines of Credit C&I and Owner-Occupied Commercial Re

  20. Slide 20: Residential Mortgage

    Residential Mortgage  $209.3 million in balances as of March 31, 2022 (includes home equity balances)  Direct-to-consumer originations centrally located at corporate headquarters  Focused on high quality borrowers – Average loan size of $152,000 – Average credit score at origination of 752 – Aver

  21. Slide 21: Specialty Consumer

    23% 22% 18% 28% 9% Specialty Consumer  $279.5 million in balances as of March 31, 2022  Direct-to-consumer and nationwide dealer network originations  Focused on high quality borrowers – Average credit score at origination of 777 – Average loan size of $22,000  Strong historical credit performan

  22. Slide 22: First INTERNET

    First INTERNET +

  23. Slide 23: Loan Portfolio Composition

    Loan Portfolio Composition 23 1 Includes carrying value adjustments of $36.4 million, $37.5 million, $38.9 million, $40.4 million, $41.6 million and $42.7 million related to terminated interest rate swaps associated with public finance loans as of March 31, 2022, December 31, 2021, September 30, 202

  24. Slide 24: Dollars in thousands 2015 2016 2017 2018 2019 2020 2021 1Q22 Total equity -

    Reconciliation of Non-GAAP Financial Measures 24 Dollars in thousands 2015 2016 2017 2018 2019 2020 2021 1Q22 Total equity - GAAP $104,330 $153,942 $224,127 $288,735 $304,913 $330,944 $380,338 $374,655 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible com

  25. Slide 25: Dollars in thousands Total equity - GAAP $344,566 $358,641 $370,442 $380,338 $374,655 Adjustments: Goodwill

    Reconciliation of Non-GAAP Financial Measures 25 Dollars in thousands 1Q21 2Q21 3Q21 4Q21 1Q22 Total equity - GAAP $344,566 $358,641 $370,442 $380,338 $374,655 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $339,879 $353,954 $365,755 $375,651 $369,968 Total asse

  26. Slide 26: Assuming a 21% tax rate Dollars in thousands Total interest income $33,280 $33,377 $33,034

    Reconciliation of Non-GAAP Financial Measures 26 1 Assuming a 21% tax rate Dollars in thousands 1Q21 2Q21 3Q21 4Q21 1Q22 Total interest income $33,280 $33,377 $33,034 $34,192 $36,034 Adjustments: Fully-taxable equivalent adjustments 1 1,356 1,394 1,356 1,348 1,314 Total interest income - FTE $34,636

  27. Slide 27: Dollars in thousands Net interest margin 2.04% 2.11% 2.00% 2.30% 2.56% Adjustments: Effect of

    Reconciliation of Non-GAAP Financial Measures 27 Dollars in thousands 1Q21 2Q21 3Q21 4Q21 1Q22 Net interest margin 2.04% 2.11% 2.00% 2.30% 2.56% Adjustments: Effect of subordinated debt redemption cost 0.00% 0.00% 0.08% 0.00% 0.00% Effect of income from tax refund advance loans 0.00% 0.00% 0.00% 0.0

  28. Slide 28: Dollars in thousands Noninterest income $8,375 $8,962 $7,813 $7,694 $6,820 Adjustments: Gain on sale

    Reconciliation of Non-GAAP Financial Measures 28 Dollars in thousands 1Q21 2Q21 3Q21 4Q21 1Q22 Noninterest income $8,375 $8,962 $7,813 $7,694 $6,820 Adjustments: Gain on sale of premises and equipment - (2,523) - - - Adjusted noninterest income $8,375 $6,439 $7,813 $7,694 $6,820 Noninterest expense

  29. Slide 29: Dollars in thousands Net income - GAAP $10,450 $13,096 $12,090 $12,478 $11,209 Adjustments: Gain

    Reconciliation of Non-GAAP Financial Measures 29 Dollars in thousands 1Q21 2Q21 3Q21 4Q21 1Q22 Net income - GAAP $10,450 $13,096 $12,090 $12,478 $11,209 Adjustments: Gain on sale of premises and equipment - (1,993) - - - Subordinated debt redemption cost - - 640 - - Acquisition-related expenses - -

  30. Slide 30: Dollars in thousands Return on average shareholders' equity 12.67% 14.88% 13.10% 13.14% 11.94% Effect

    Reconciliation of Non-GAAP Financial Measures 30 Dollars in thousands 1Q21 2Q21 3Q21 4Q21 1Q22 Return on average shareholders' equity 12.67% 14.88% 13.10% 13.14% 11.94% Effect of gain on sale of premises and equipment 0.00% (2.26%) 0.00% 0.00% 0.00% Effect of subordinated debt redemption cost 0.00%

  31. Slide 31: Dollars in thousands Income before income taxes - GAAP 12,307$ 15,473$ 14,310$ 14,482$ 12,999$

    Reconciliation of Non-GAAP Financial Measures 31 Dollars in thousands 1Q21 2Q21 3Q21 4Q21 1Q22 Income before income taxes - GAAP 12,307$ 15,473$ 14,310$ 14,482$ 12,999$ Adjustments: Income from tax refund advance loans - - - - (2,864) Provision for tax refund advance loans losses - - - - 1,842 Tax r

First Internet Bancorp — Q1 2022 Earnings Presentation on 6ix