Slide 1: Financial Results First Quarter 2024
Financial Results First Quarter 2024 Exhibit 99.2
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
Slide 3: First Quarter 2024 Highlights
First Quarter 2024 Highlights Net income of $5.2 million, up 25.1% from 4Q23 Diluted earnings per share of $0.59, up 22.9% from 4Q23 3 Net interest margin of 1.66% and FTE NIM of 1.75%1 improved by 8 and 7 bps, respectively, from 4Q23 Yield on loan portfolio increased 23 bps from 4Q23 while
Slide 4: Loan Portfolio Overview
Loan Portfolio Overview Total portfolio loan balances increased 1.8% from 4Q23 Commercial loan balances increased $75.2 million, or 2.5%, from 4Q23 Consumer loan balances decreased $3.5 million, or 0.4%, from 4Q23 1Q24 funded portfolio loan origination yields were 8.84%, relatively stable wi
Slide 5: Deposit Composition
$1,893.9 44% $882.3 21% 428.2 10% $264.1 6% $279.7 7% $525.6 12% Consumer Small Business Commercial Public Funds Fintech Brokered2 $129.4 3% $253.2 6% $23.5 1% $448.9 10% $802.3 19%$279.7 6% $1,739.0 41% $597.8 14% Noninterest-bearing deposits Interest-bearing demand deposits Savings accounts Money
Slide 6: Uninsured Deposit Balances
Uninsured Deposit Balances 6 Estimated uninsured deposit balances represent 26% of total deposits, up from 25% in 4Q23 Uninsured balances include Indiana-based Public Funds which are insured by the Indiana Board for Depositories and neither require collateral nor are reported as “Preferred Depos
Slide 7: Liquidity and 1Q24 Deposit Update
Liquidity and 1Q24 Deposit Update 7 Cash and unused borrowing capacity totaled $1.7 billion at March 31, 2024 – Cash balances up $75.4 million since 4Q23 – Currently represents 158% of total uninsured deposits and 203% of adjusted uninsured deposits CD production supplemented by growth in fintec
Slide 8: 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 4.7% and 4.2%, respectively, from 4Q23 Improved loan mix and higher earning asset yields were partially offset by slightly higher funding costs Loan portfolio yield positively impacted by optimizati
Slide 9: Net Interest Margin Drivers
Net Interest Margin Drivers 9 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix Net Interest Margin – FTE1 Linked-Quarter Change Monthly Rate Paid on Int. Bearing Deposits vs. Fed Funds Linked-quarter FTE NIM1 increased 7 bps due to higher earning asset yields, offset by slightly
Slide 10: Noninterest Income
Noninterest Income 10 Dollars in millions Noninterest Income by Type Dollars in millions Noninterest Income by Quarter Noninterest income of $8.3 million, up 12.8%, from $7.4 million in 4Q23 Gain on sale of loans of $6.5 million, up 8.4%, from $6.0 million in 4Q23 – SBA loan sale volume experien
Slide 11: Noninterest Expense
Noninterest Expense 11 1 1Q23 noninterest expense includes $3.1 million of mortgage operations and exit costs; see Reconciliation of Non-GAAP Financial Measures in the Appendix Dollars in millions Noninterest Expense by Quarter Noninterest Expense to Average Assets 1.73%1.71% 1.55% 1.83% 1.52% 1.53%
Slide 12: Asset Quality
Asset Quality Allowance for credit losses to total loans of 1.05% in 1Q24, up 4 bps from 4Q23 Quarterly provision for credit losses was $2.4 million, compared to $3.6 million in 4Q23 Net charge-offs to average loans of 0.05%, compared to 0.12% in 4Q23 Nonperforming loans to total loans incre
Slide 13: Capital
Capital Tangible common equity to tangible assets decreased 15 bps to 6.79%1 from 4Q23 due primarily to strong growth in deposits and liquidity Tangible book value per share of $41.831, up 1.0% from 4Q23 Repurchased 10,500 shares at an average price per share of $26.94 during 1Q24 Since 4Q21
Slide 14: Pro Forma Capital Impact of Unrealized Securities Losses
Pro Forma Capital Impact of Unrealized Securities Losses Limited deployment of excess liquidity into the securities portfolio during the low-rate environment in 2020 and 2021 Over 67% of securities are classified as available-for-sale and reported on the balance sheet at market value Capital r
Slide 15: Small Business Lending
Small Business Lending $239.3 million of balances as of March 31, 2024 Nationwide platform providing growth capital to entrepreneurs and small business owners 8th largest Small Business Administration 7(a) lender for the SBA’s year-to-date 2024 fiscal year 1315 Managed SBA 7(a) Loans Portfolio
Slide 16: Franchise Finance
Franchise Finance $543.1 million of balances as of March 31, 2024 Focused on providing growth financing to franchisees in a variety of industry segments Strong historical credit performance to date Average loan size of $0.9 million 16 Portfolio Mix by Borrower Use Portfolio Mix by State Port
Slide 17: Construction and Investor Commercial Real Estate
Construction and Investor Commercial Real Estate $453.9 million of combined balances as of March 31, 2024 Average current loan balance of $6.1 million for investor CRE Average commitment sizes for construction – Commercial construction/development: $25.1 million – Residential construction/deve
Slide 18: Single Tenant Lease Financing
Single Tenant Lease Financing $941.6 million of balances as of March 31, 2024 Long-term financing of single tenant properties occupied by historically strong national and regional tenants Weighted-average portfolio LTV of 46% Average loan size of $1.3 million 18 Portfolio Mix by Major Vertic
Slide 19: Public Finance
5% 9% 12% 6% 17%9% 8% 3%0.3% 31% AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 A-/A3 BBB+/Baa1 BBB/Baa2 Non-Rated 32% 15% 13% 10% 6% 6% 6% 4% 3% 2% 3% General Obligation Essential use equipment loans Lease rental revenue Water & sewer revenue Private Higher Education Tax Incremental Financing (TIF) dist
Slide 20: Healthcare Finance
Healthcare Finance $213.3 million of balances as of March 31, 2024 Average loan size of $446,000 Strong historical credit performance to date No delinquencies in this portfolio 20 Portfolio Mix by Borrower Use Portfolio Mix by Borrower Portfolio Mix by State 20 87% 9% 4% Dentists Veterinaria
Slide 21: C&I and Owner-Occupied Commercial Real Estate
C&I and Owner-Occupied Commercial Real Estate $191.8 million of combined balances as of March 31, 2024 Current C&I LOC utilization of 37% Average loan sizes C&I: $691,000 Owner-occupied CRE: $837,000 21 Portfolio by Loan Type Portfolio Mix by State Portfolio Mix by Major Industry 21 50% 30
Slide 22: Residential Mortgage
Residential Mortgage $412.8 million of balances as of March 31, 2024 (includes home equity balances) Historically direct-to-consumer originations centrally located at corporate headquarters Focused on high quality borrowers – Average loan size of $207,000 – Average credit score at origination
Slide 23: Specialty Consumer
24% 21% 17% 28% 10% Specialty Consumer $380.7 million of balances as of March 31, 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 $26,000 Strong historical credit performa
Slide 24: First INTERNET
First INTERNET +
Slide 25: Loan Portfolio Composition
Loan Portfolio Composition 25 1 Includes carrying value adjustments of $26.9 million, $27.8 million, $29.0 million, $30.5 million, $31.5 million, $32.5 million and $37.5 million associated with public finance loans as of March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, March 31,
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 26 Dollars in thousands, except for per share data 2018 2019 2020 2021 2022 2023 1Q24 Total equity - GAAP $288,735 $304,913 $330,944 $380,338 $364,974 $362,795 $366,739 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangibl
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 27 1 Assuming a 21% tax rate Dollars in thousands, except for per share data 1Q23 2Q23 3Q23 4Q23 1Q24 Total equity - GAAP $355,572 $354,332 $347,744 $362,795 $366,739 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $3
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 28 Dollars in thousands, except for per share data 1Q23 2Q23 3Q23 4Q23 1Q24 Noninterest income $5,446 $5,871 $7,407 $7,401 $8,347 Adjustments: Mortgage-related revenue (65) - - - - Adjusted noninterest income $5,381 $5,871 $7,407 $7,401 $8,347 Noninteres
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 29 1 Assuming a 21% tax rate Dollars in thousands, except for per share data 1Q23 2Q23 3Q23 4Q23 1Q24 Income tax provision (benefit) - GAAP (2,332)$ (234)$ (326)$ (585)$ 429$ Adjustments:1 Mortgage-related revenue (14) - - - - Mortgage-related costs 641
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 30 Dollars in thousands 1Q24 Tangible common equity $362,052 Adjustments: Accumulated other comprehensive loss 30,102 Adjusted tangible common equity $392,154 Tangible assets $5,335,980 Adjustments: Cash in excess of $300 million (181,264) Adjusted tangi