First Internet Bancorp · NASDAQ:INBK

First Internet Bancorp — Q2 2021 Earnings Presentation

27 slides from First Internet Bancorp's earnings presentation, Aug 3, 2021

  1. Slide 1: Investor Presentation Second Quarter 2021

    Investor Presentation Second Quarter 2021 Exhibit 99.1

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

    Forward-Looking Statements & Non-GAAP Financial Measures 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 a

  3. Slide 3: 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

  4. Slide 4: Nationwide Branchless Deposit Franchise

    Nationwide Branchless Deposit Franchise 4 $665.7 million 20.8% $279.4 million 8.7% $1,224.7 million 38.2% $528.3 million 16.5% $508.0 million 15.8% * As of June 30, 2021; $117 million of brokered deposits and $1.6 million of balances in US territories/Armed Forces included in headquarters/Midwest ba

  5. Slide 5: Multiple Opportunities to Grow Deposits

    Multiple Opportunities to Grow Deposits 5 Capitalize on the enduring trend toward branchless banking – consumers and small businesses are increasingly moving their banking business online, especially following the experience of COVID-19 Generate an increased level of lower-cost deposits as expansion

  6. Slide 6: National and Regional Asset Generation Platform

    National and Regional Asset Generation Platform  Consumer — National  Commercial — Regional Commercial — National  Diversified Asset Generation Platform Digital direct-to-consumer mortgages Specialty lending – horse trailers and RVs Single tenant lease financing Public finance Small business len

  7. Slide 7: 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”  Eight years in a row  “Top Workplace

  8. Slide 8: Near-term Profitability Drivers

    Near-term Profitability Drivers Continued deposit repricing combined with stabilized asset yields provides significant opportunity to increase net interest income and net interest margin Annual interest expense savings of approximately $26 million expected for 2021 SBA platform is hitting its stride

  9. Slide 9: Second Quarter 2021 Highlights

    Second Quarter 2021 Highlights 9 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix Loans and Deposits  Total portfolio loan balances declined 3.3% from 1Q21  C&I and investor CRE increased while healthcare finance, single tenant lease financing and public finance experienced net

  10. Slide 10: Meaningful Outperformance vs. Peers

    Meaningful Outperformance vs. Peers 10 1 Change from 1Q20 – 1Q21; Orange indicates median of publicly traded $3-$7bn asset U.S. banks, green represents top quartile; peer data includes FTE net interest margin data if available 2 Change from 6/30/2020 – 6/30/2021; Orange indicates median of publicly

  11. Slide 11: Equity Keeping Pace with Balance Sheet Growth

    Equity Keeping Pace with Balance Sheet Growth 11 Dollars in millions Total Loans Dollars in millions Total Assets CAGR: 20.0% vs. Peers1 at 14.5% $1,854 $2,768 $3,542 $4,100 $4,246 $4,205 2016 2017 2018 2019 2020 2Q21 Dollars in millions Shareholders’ Equity Dollars in millions Total Deposits CAGR:

  12. Slide 12: Consistent Earnings Growth and Increasing Profitability

    Consistent Earnings Growth and Increasing Profitability 12 1 See Reconciliation of Non-GAAP Financial Measures. 2 2017 reported net income of $15.2 million included the revaluation of the Company’s net deferred tax asset which reduced net income by $1.8 million and negatively impacted Net Income, EP

  13. Slide 13: Net Interest Income and Net Interest Margin

    Net Interest Income and Net Interest Margin  FTE net interest margin improved 7 bps from 1Q21  Interest expense on deposits declined as higher cost CDs matured and were either replaced at lower rates or not renewed  Interest income on loans was relatively stable while the average balance of loans

  14. Slide 14: Net Interest Margin Drivers

    Net Interest Margin Drivers  Linked quarter NIM improvement was primarily attributable to the continued impact of lower deposit costs – Impact of modestly higher loan yields offset by lower average loan balances – Interest-earning asset yields declined 5 bps from 1Q21 due to composition; expected t

  15. Slide 15: Noninterest Income

    Noninterest Income  Noninterest income of $9.0 million, compared to $8.4 million in 1Q21 and $5.0 million in 2Q20  Mortgage banking revenue of $2.7 million, compared to $5.8 million in 1Q21 and $3.4 million in 2Q20  Gain on sale of loans of $3.0 million, compared to $1.7 million in 1Q21 and $0.8

  16. Slide 16: Noninterest Expense

    Noninterest Expense  Noninterest expense of $15.1 million, compared to $15.3 million in 1Q21 and $13.2 million in 2Q20 – Decrease in salaries and employee benefits from 1Q21 due mainly to lower medical claims expense – Decrease in deposit insurance premium due to year-over-year decline in total ass

  17. Slide 17: Deposit Composition

    Deposit Composition  Total deposits declined $11.5 million, or 0.4%, compared to 1Q21, and decreased $174.6 million, or 5.2%, year-over-year  Non-time deposit balances increased by $64.1 million compared to 1Q21  CD and brokered deposit balances decreased $75.5 million compared to 1Q21  Cost of

  18. Slide 18: Loan Portfolio Overview

    Loan Portfolio Overview  Total loan portfolio balance declined 3.3% from 1Q21, and was comparable to 2Q20  Commercial loan balances decreased $85.1 million, or 3.4%, compared to 1Q21, driven primarily by net payoffs in healthcare finance, single tenant lease financing and public finance, partially

  19. Slide 19: Asset Quality

    Asset Quality  Asset quality metrics remain among the industry’s best, driven by a strong credit culture and lower-risk asset classes  Allowance for loan losses to total loans of 0.95% in 2Q21, or 0.96% excluding PPP loans1  Quarterly provision for loan losses of $21,000, compared to $1.3 million

  20. Slide 20: Capital

    Capital  Strong capital generation during the quarter resulted in the tangible common equity to tangible assets ratio increasing 31 bps to 8.43%  Tangible book value per share of $35.92, increasing 16.2% since 2Q20  Regulatory capital ratios remained strong at the Company and Bank levels 20 1 See

  21. Slide 21: 2016 2017 2018 2019 2020 TTM 2Q21 Total revenue - GAAP $53,766 $64,523 $71,027

    Reconciliation of Non-GAAP Financial Measures 21 2016 2017 2018 2019 2020 TTM 2Q21 Total revenue - GAAP $53,766 $64,523 $71,027 $79,756 $100,877 $119,718 Adjustments: Gain on sale of premises and equipment - - - - - (2,523) Adjusted revenue $53,766 $64,523 $71,027 $79,756 $100,877 $117,195 Net incom

  22. Slide 22: 2016 2017 2018 2019 2020 TTM 2Q21 Total average equity - GAAP $124,023 $178,212

    Reconciliation of Non-GAAP Financial Measures 22 2016 2017 2018 2019 2020 TTM 2Q21 Total average equity - GAAP $124,023 $178,212 $259,416 $296,382 $313,763 $331,484 Adjustments: Average goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Average tangible common equity $119,336 $173,525 $254,729

  23. Slide 23: Dollars in thousands 2016 2017 2018 2019 2020 2Q21 Total equity - GAAP $153,942

    Reconciliation of Non-GAAP Financial Measures 23 Dollars in thousands 2016 2017 2018 2019 2020 2Q21 Total equity - GAAP $153,942 $224,127 $288,735 $304,913 $330,944 $344,566 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $149,255 $219,440 $284,048 $300,2

  24. Slide 24: Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Total equity - GAAP $307,711 $318,102

    Reconciliation of Non-GAAP Financial Measures 24 Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Total equity - GAAP $307,711 $318,102 $330,944 $344,566 $358,641 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $303,024 $313,415 $326,257 $339,879 $353,954 Total asse

  25. Slide 25: Assuming a 21% tax rate Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Net

    Reconciliation of Non-GAAP Financial Measures 25 1 Assuming a 21% tax rate Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Net interest income $14,426 $16,232 $18,865 $20,525 $21,607 Adjustments: Fully-taxable equivalent adjustments 1 1,437 1,424 1,400 1,356 1,394 Net interest income - FTE $15,863 $17

  26. Slide 26: Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Total revenue - GAAP 19,399$ 28,727$

    Reconciliation of Non-GAAP Financial Measures 26 Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Total revenue - GAAP 19,399$ 28,727$ 31,522$ 28,900$ 30,569$ Adjustments: Gain on sale of premises and equipment - - - - (2,523) Adjusted revenue 19,399$ 28,727$ 31,522$ 28,900$ 28,046$ Income before incom

  27. Slide 27: Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Diluted average common shares outstanding 9,768,227

    Reconciliation of Non-GAAP Financial Measures 27 Dollars in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Diluted average common shares outstanding 9,768,227 9,773,224 9,914,022 9,963,036 9,881,422 Diluted earnings per share - GAAP 0.40$ 0.86$ 1.12$ 1.05$ 1.31$ Adjustments: Effect of write-down of other real e

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