First Internet Bancorp · NASDAQ:INBK

First Internet Bancorp — Q3 2024 Earnings Presentation

28 slides from First Internet Bancorp's earnings presentation, Oct 24, 2024

1. Slide 1: Financial Results Third Quarter 2024

   Financial Results Third Quarter 2024

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

   Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements with respect to the financial condition, results of operations

3. Slide 3: Third Quarter 2024 Highlights

   Third Quarter 2024 Highlights  Net income of $7.0 million and diluted EPS of $0.80, up  Net interest margin of 1.62% and FTE NIM of 1.70%1,2, 21.0% and 19.4% respectively, from 2Q24 down 5 and 6 bps respectively from 2Q24  Net income up 12.3% from 2Q24 adjusted results  NIM impacted by excess li

4. Slide 4: Loan Portfolio Overview

   Loan Portfolio Overview  Total portfolio loan balances increased 1.9% from 2Q24  Commercial loan balances increased $75.5 million, or 2.4%, from 2Q24  Consumer loan balances increased $2.9 million, or 0.4%, from 2Q24  3Q24 funded portfolio loan origination yields were 8.85%, down slightly from 2

5. Slide 5: Deposit Composition

   Deposit Composition  Total deposits increased 12.3% from 2Q24 and are up 17.5% from 3Q23  Diversified deposit base comprised of consumer, small business, commercial, fintech, and public funds  Deposit base is further diversified by product type among checking, money market/savings and CDs  Quart

6. Slide 6: Liquidity and 3Q24 Deposit Update

   Liquidity and 3Q24 Deposit Update  Cash and unused borrowing capacity totaled $2.1 billion at September 30, 2024 – Currently represents 179% of total uninsured deposits and 230% of adjusted uninsured deposits  CD production supplemented by growth in fintech deposits drove increased balance sheet l

7. Slide 7: Net Interest Income and Net Interest Margin

   Net Interest Income and Net Interest Margin  Net interest income on a GAAP and FTE basis were up Net Interest Income – GAAP and FTE1 2.1% and 1.8% respectively from 2Q24 Dollars in millions $21.9 $22.5 $22.9  NIM and FTE NIM1 impacted by elevated cash balances $18.6 $21.0 and loan activity  Effec

8. Slide 8: Net Interest Margin Drivers

   Net Interest Margin Drivers  Linked-quarter FTE NIM1 decreased 6 bps from 2Q24; impacted by excess liquidity and loan activity – Weighted average yield of 8.85% on funded portfolio originations during 3Q24 – Securities yields were relatively stable in 3Q24 while other earning asset yields decreased

9. Slide 9: Noninterest Income

   Noninterest Income  Noninterest income of $12.0 million, up 9.0%, from $11.0 million in 2Q24  Gain on sale of loans of $9.9 million, up 19.8%, from $8.3 million in 2Q24 – SBA loan sale volume up 22.1% from 2Q24 – Net gain on sale premiums decreased 65 bps from 2Q24  Decrease of $0.7 million in ot

10. Slide 10: Noninterest Expense

    Noninterest Expense  Noninterest expense of $22.8 million, up 2.1%, from $22.3 million in 2Q24  Excluding almost $0.6 million of non-recurring items in 2Q24, noninterest expense was up 4.7% in 3Q24  The increase in noninterest expense was driven primarily by higher salaries and employee benefits

11. Slide 11: Asset Quality

    Asset Quality  Allowance for credit losses to total loans of 1.13% in 3Q24, up 3 bps from 2Q24  Quarterly provision for credit losses was $3.4 million, compared to $4.0 million in 2Q24  Net charge-offs to average loans of 0.15%, compared to 0.14% in 2Q24  Nonperforming loans to total loans incre

12. Slide 12: Capital

    Capital  Tangible common equity to tangible assets decreased 34 bps from 2Q24 to 6.54%1 – Impacted by deposit growth and increase in cash balances  Tangible book value per share of $43.891, up 3.6% from 2Q24  CET1 and TRBC ratios at both the Company and the Bank, adjusted for all unrealized secur

13. Slide 13: Small Business Lending

    Small Business Lending  $298.6 million of balances as of September 30, 2024  Nationwide platform providing growth capital to entrepreneurs and small business owners  8th largest Small Business Administration 7(a) lender for the SBA’s 2024 fiscal year Managed SBA 7(a) Loans Portfolio Mix by State

14. Slide 14: Construction and Investor Commercial Real Estate

    Construction and Investor Commercial Real Estate  $601.6 million of combined balances as of September 30, 2024  3Q24 unfunded commitment balances – Commercial construction/development: $485.0 million  Average current loan balance of $10.4 million for investor CRE – Residential construction/develo

15. Slide 15: Franchise Finance

    Franchise Finance  $550.4 million of balances as of September 30, 2024  Focused on providing growth financing to franchisees in a variety of industry segments  Average loan size of $0.8 million Portfolio Mix by Borrower Use Portfolio Mix by State Portfolio Mix by Brand Limited-Service Urban Air A

16. Slide 16: Single Tenant Lease Financing

    Single Tenant Lease Financing  $932.1 million of balances as of September 30, 2024  Strong historical credit performance  Long-term financing of single tenant properties occupied  No delinquencies in this portfolio by historically strong national and regional tenants  Minimal office exposure; 1

17. Slide 17: Healthcare Finance

    Healthcare Finance  $190.3 million of balances as of September 30, 2024  Average loan size of $416,000  Strong historical credit performance  No delinquencies in this portfolio Portfolio Mix by Borrower Use Portfolio Mix by Borrower Portfolio Mix by State Practice Refi or 4% 6% 9% Acquisition CA

18. Slide 18: Public Finance

    Public Finance  $462.7 million of balances as of September 30, 2024  No delinquencies or losses since inception  Provides a range of credit solutions for government and not-for-profit entities  Borrowers’ needs include short-term financing, debt refinancing, infrastructure improvements, economic

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

    C&I and Owner-Occupied Commercial Real Estate  $167.7 million of combined balances as of September 30,  Minimal office exposure; 1.5% of combined loan 2024 balances consisting of suburban office space  Current C&I LOC utilization of 31%  Average loan sizes  C&I: $570,000  Owner-occupied CRE: $

20. Slide 20: Residential Mortgage

    Residential Mortgage  $399.0 million of balances as of September 30, 2024 (includes home equity balances)  Historically direct-to-consumer originations centrally located at corporate headquarters  Focused on high quality borrowers – Average loan size of $204,000 – Average credit score at originat

21. Slide 21: Specialty Consumer

    Specialty Consumer  $404.4 million of balances as of September 30, 2024  Direct-to-consumer and nationwide dealer network originations  Focused on high quality borrowers – Average credit score at origination of 778 – Average loan size of $27,000  Strong historical credit performance Concentratio

22. Slide 22: Appendix

    Appendix 22

23. Slide 23: Loan Portfolio Composition

    Loan Portfolio Composition Dollars in thousands 2021 2022 2023 1Q24 2Q24 3Q24 Commercial loans Commercial and industrial $ 96,008 $ 126,108 $ 129,349 $ 133,897 $ 115,585 $ 111,199 Owner-occupied commercial real estate 66,732 61,836 57,286 57,787 58,089 56,461 Investor commercial real estate 28,019 9

24. Slide 24: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 2018 2019 2020 2021 2022 2023 3Q24 Total equity - GAAP $288,735 $304,913 $330,944 $380,338 $364,974 $362,795 $385,129 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible c

25. Slide 25: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 3Q23 4Q23 1Q24 2Q24 3Q24 Total equity - GAAP $347,744 $362,795 $366,739 $371,953 $385,129 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $343,057 $358,108 $362,052 $367

26. Slide 26: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 3Q23 4Q23 1Q24 2Q24 3Q24 Noninterest expense $19,756 $20,056 $21,023 $22,336 $22,794 Adjustments: IT termination fees - - - (452) - Anniversary expenses - - - (120) - Adjusted noninterest expense $19,756 $2

27. Slide 27: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures Dollars in thousands, except for per share data 3Q23 4Q23 1Q24 2Q24 3Q24 Net income - GAAP $ 3,409 $ 4,143 $ 5,181 $ 5,775 $ 6,990 Adjustments: IT termination fees - - - 357 - Anniversary expenses - - - 95 - Adjusted net income $3,409 $4,143 $5,181 $6,22

28. Slide 28: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures Dollars in thousands 3Q24 Tangible common equity $380,442 Adjustments: Accumulated other comprehensive loss 24,326 Adjusted tangible common equity $404,768 Tangible assets $5,818,572 Adjustments: Cash in excess of $300 million (412,479) Adjusted tangible

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