First Internet Bancorp · NASDAQ:INBK
First Internet Bancorp — Investor Presentation (November 2019)
30 slides from First Internet Bancorp's investor presentation, Nov 1, 2019
Slide 1: Investor Presentation Third Quarter 2019
Investor Presentation Third Quarter 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements with respect to the financial condition, results of operations, trends in lending policies, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by t
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures, specifically adjusted net income, adjusted diluted earnings per share, average tangibl
Slide 4: A Pioneer in Branchless Banking
A Pioneer in Branchless Banking • Digital bank with unique business model and over 20 years of operations • Highly scalable technology driven business • Nationwide deposit gathering and asset generation platforms • Attractive lending niches with growth opportunities • History of strong growth and a
Slide 5: Nationwide Branchless Deposit Franchise
Nationwide Branchless Deposit Franchise $492.5 million $3.1 Billion 15.6% Total Deposits* $559.0 million 17.8% $1,325.3 million 42.1% 33% 5-year CAGR* Nationwide consumer, $528.9 million $242.5 million small business and 7.7% 16.8% commercial deposit base Innovative technology and convenience suppor
Slide 6: Multiple Opportunities to Grow Deposits
Multiple Opportunities to Grow Deposits . Capitalize on the enduring trend toward branchless banking – consumers and small business are increasingly moving their banking business online . Generate an increased level of lower-cost deposits as expansion of small-business, municipal and commercial rela
Slide 7: National and Regional Asset Generation Platform
National and Regional Asset Generation Platform DIVERSIFIED ASSET GENERATION PLATFORM Commercial - National Commercial - Regional . C&I – Central Indiana . Single tenant lease financing . C&I – Arizona . SBA – Central Indiana / Arizona . Public finance . Investor CRE – Central Indiana . Healthcare f
Slide 8: Near-Term Earnings Catalysts
Near-Term Earnings Catalysts Well positioned for declining interest rate environment $1.1 Billion of CDs Maturing over Next 12 Months Mortgage Banking Revenue $1.1 billion with Dollars in millions 2.59% 3.06% $4.3 weighted average 2.86% maturity of 6.5 2.74% 2.68% 2.00% months repriced 59 2.41% bp
Slide 9: Small Business, Big Opportunity
Small Business, Big Opportunity . Complementary to existing business lines . Diversifies revenue in a capital efficient manner . Opportunities on both sides of the balance sheet Enhanced Treasury Upgraded Digital SBA Lending Management Capabilities Account Access 9
Slide 10: Entrepreneurial Culture Key to Success
Entrepreneurial Culture Key to Success First Internet Bank has been recognized for its innovation and is consistently ranked among the best banks to work for, enhancing its ability to attract and retain top talent . American Banker’s “Best Banks to Work For” Seven years in a row . “Top Workplaces
Slide 11: History of Strong Organic Growth
History of Strong Organic Growth Execution of the business strategy has driven consistent and sustained balance sheet growth Total Assets Total Loans Dollars in millions Dollars in millions 1 1 vs. Peers at 14.8% $2,881 CAGR: 33.4% vs. Peers at 12.7% $4,095 CAGR: 31.5% $2,716 $3,542 $2,091 $2,768 $1
Slide 12: Profitability Driven by Capital Deployment
Profitability Driven by Capital Deployment Capital has been deployed into new loan verticals, driving earnings growth Net Income1,2,3 Diluted EPS1,2,3 Dollars in thousands $23,814 $23,633 $2.30 $2.50 $2.39 $2.32 $1.96 $17,072 $21,900 $2.30 $21,719 $2.13 $2.14 $12,074 $15,226 $8,929 $0.96 $4,324 2014
Slide 13: Growth Drives Economies of Scale
Growth Drives Economies of Scale Scalable, technology-driven model has delivered increasing efficiency and is a key component driving improved operating leverage Net Interest Income - FTE1 Noninterest Expense / Average Assets2 Dollars in millions $17.3 $17.8 $17.7 1.52% $16.9 $16.4 $16.6 $16.9 $16.8
Slide 14: Capital Markets History
Capital Markets History . Following the IPO in late 2013, the Company deployed capital to fund commercial loan growth which resulted in strong revenue growth and improved earnings . Capital offerings: . 2Q19: raised $37.0 million of subordinated debt . 2Q18: raised $57.5 million of common equity . 3
Slide 15: Capital and Balance Sheet Management
Capital and Balance Sheet Management . Combination of lower risk asset profile and top quartile asset quality performance provides ability to maximize capital leverage . Completed the previously announced stock repurchase program . 482,970 shares were repurchased at an aggregate amount of $10.0 mill
Slide 16: Deposit Composition
Deposit Composition . Total deposits increased $701.6 million, or 28.7%, since 3Q18 . Small business money market and checking deposits increased over $41 million during 3Q19 . Approximately $1.1 billion of CDs with a weighted average cost of 2.59% mature over the next 12 months – provides a signifi
Slide 17: Loan Portfolio Overview
Loan Portfolio Overview Strategic loan growth has led to a more diversified portfolio $2,839.9 $2,861.2 $2,881.2 $2,716.2 Dollars in millions 7% 7% 7% $2,493.6 7% 2% 2% 2% 2% 8% 1 Commercial and Industrial 2% $2,091.0 35% 36% 35% Commercial Real Estate 9% 34% 2% 35% Single Tenant Lease Financing 38%
Slide 18: Commercial Real Estate
Commercial Real Estate Commercial real estate balances increased Single Tenant Lease Financing $147.0 million, or 15.9%, since 3Q18 Portfolio Diversity Red Lobster As of % of 7.9% Dollars in millions September 30, 2019 total 5.4% ICWG Single tenant lease financing $1,008.2 93.9% 5.2% Construction 54
Slide 19: Commercial & Industrial
Commercial & Industrial Commercial & industrial overview: . Originations / commitments over the past As of % of Dollars in millions September 30, 2019 total twelve months exceeded $110 million Commercial & industrial $95.1 52.4% . Primarily serves the borrowing and treasury Owner-occupied CRE 86.4 4
Slide 20: Public Finance
Public Finance Public finance originations/commitments Portfolio Composition General Obligation during the past twelve months exceeded 2.6% 2.6% 3.5% Essential use equipment 2.9% loans $172 million 4.8% Lease rental revenue Water & Sewer Revenue Public Finance Balances 29.9% DollarsDollars ininmilli
Slide 21: Healthcare Finance
Healthcare Finance Healthcare finance originations/commitments over Portfolio Composition the past twelve months exceeded $173 million 4.6% 0.9% 0.1% Practice Refinance Healthcare Finance Balances or Acquisition 13.4% Dollars in millions $251.5 Owner Occupied Dollars in millions $65.6 $212.4 CRE $15
Slide 22: Residential Mortgage
Residential Mortgage . Award-winning national online origination platform Well Diversified Mortgage Originations* . Direct-to-consumer originations managed by sales and underwriting personnel located in Indiana- based corporate HQ 23.5% 16.0% . Geographic diversity 30.4% provides opportunity to bene
Slide 23: Excellent Asset Quality
Excellent Asset Quality Asset quality remains among the best in the industry driven by a strong credit culture and lower-risk asset classes NPAs / Total Assets NPLs / Total Loans 0.50% 0.37% 0.31% 0.21% 0.21% 0.20% 0.10% 0.09% 0.04% 0.02% 0.04% 0.03% 2014 2015 2016 2017 2018 3Q19 2014 2015 2016 2017
Slide 24: Interest Rate Risk Management
Interest Rate Risk Management . 3Q19 FTE net interest margin of 1.70%1 declined 21 bps compared to 2Q19 . Decline driven primarily by excess cash and a full quarter’s impact of June 2019 subordinated notes . Significant deposit repricing and deployment of excess cash are expected to provide NIM expa
Slide 25: Drivers of Value Creation
Drivers of Value Creation Management has aligned interests and is committed to building shareholder value . Further extend the scope and market penetration in specialty lending lines . Diversify the revenue stream with additional sources of noninterest income . Expand deposit channels and drive mix
Slide 26: Appendix
Appendix 26 BANCORP
Slide 27: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights . Record quarterly net income of $6.3 million and diluted EPS of $0.63 . Quarterly revenue of $20.8 million, up 15.8% from 3Q18 . Mortgage banking revenue of $4.3 million, up 207.2% from 3Q18 . Quarterly net interest income of $15.2 million, down 4.6% from 3Q18 . Quarte
Slide 28: Loan Portfolio Composition
Loan Portfolio Composition Dollars in thousands 2016 2017 3Q18 4Q18 1Q19 2Q19 3Q19 Commercial loans Commercial and industrial $ 102,437 $ 122,940 $ 105,489 $ 114,382 $ 112,146 $ 110,143 $ 95,078 Owner-occupied commercial real estate 57,668 75,768 93,568 87,962 87,482 83,979 86,357 Investor commercia
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 2014 2015 2016 2017 2018 TTM 3Q19 Net income - GAAP $4,324 $8,929 $12,074 $15,226 $21,900 $21,719 Adjustments: Write-down of other real estate owned - - - - 1,914 1,914 Net deferred tax asset revaluation - - - 1,846 - - Adjusted net income $4,324 $8,929
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Total equity - GAAP $224,127 $224,824 $282,087 $287,740 $288,735 $294,013 $296,120 $295,140 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common
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