Slide 1: Financial Results First Quarter 2023
Financial Results First Quarter 2023 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: Addressing Recent Market Events
Addressing Recent Market Events Deposits Deposits grew by $181 million, or 5.3%, from 4Q22 and have increased $135 million, or 3.7% in April Uninsured Deposits 26% of total deposits at quarter end 19% after adjusting for insured / collateralized public funds and other deposits under contractua
Slide 4: First Quarter 2023 Highlights
First Quarter 2023 Highlights Net loss of $1.3 million; diluted loss per share of $0.14 Net loss impacted by a $4.7 million partial charge-off related to one C&I loan and net pre-tax costs of $3.0 million related to the previously announced mortgage exit 4 NIM of 1.76% and FTE NIM of 1.89%1
Slide 5: Loan Portfolio Overview
Loan Portfolio Overview Total loan portfolio balances increased 3.1% from 4Q22 Commercial loan balances increased $88.7 million, or 3.3%, compared to 4Q22 Consumer loan balances increased $23.1 million, or 3.1%, compared to 4Q22 1Q23 funded portfolio loan origination yields were up 161 bps f
Slide 6: Deposit Composition
$1,410.5 39% $900.4 25% $406.1 11% $198.7 6% $82.4 2% $624.2 17% Consumer Small Business Commercial Public Funds BaaS Brokered $140.5 4% $351.6 10% $32.8 1%$254.0 7% $1,000.0 28% $82.4 2% $1,170.1 32% $590.6 18% Noninterest-bearing deposits Interest-bearing demand deposits Savings accounts Money mar
Slide 7: Uninsured Deposit Balances
Uninsured Deposit Balances 7 Estimated uninsured deposit balances represent 26% of total deposits, down from 33% at 4Q22 – Decrease driven primarily by decline in money market balances, conversions to ICS reciprocal deposits and drawdowns on construction-related noninterest-bearing balances Unin
Slide 8: Liquidity and 2Q23 Deposit Update
Liquidity and 2Q23 Deposit Update 8 Cash and unused borrowing capacity totaled $931.7 million at quarter end. – Cash balances up approximately $100.0 million since quarter end – Currently represents 109% of total uninsured deposits and 149% of adjusted uninsured deposits Total deposit balances d
Slide 9: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Net interest income on a GAAP and FTE basis were down 9.7% and 9.1%, respectively, from 4Q22 Solid loan growth and higher origination yields were offset by higher funding costs Total loan portfolio yield impacted by loan beta lag effect on fixed rate
Slide 10: Net Interest Margin Drivers
Net Interest Margin Drivers 10 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 NIM decreased 33 bps, due primarily to higher deposit costs, partially off
Slide 11: Noninterest Income
Noninterest Income 11 Dollars in millions Noninterest Income Dollars in millions Noninterest Income Noninterest income of $5.4 million, compared to $5.8 million in 4Q22 Gain on sale of loans of $4.1 million, compared to $2.9 million in 4Q22 – SBA loan sale volume increased 16.4% compared to 4Q22
Slide 12: Noninterest Expense
Noninterest Expense Noninterest expense of $21.0 million, compared with $18.5 million in 4Q22 Excluding mortgage operations and exit costs of $3.1 million, noninterest expense totaled $17.9 million. – Salaries and employee benefits expense included $2.2 million of mortgage costs – Loan expenses
Slide 13: Asset Quality
Asset Quality Allowance for credit losses to total loans of 1.02% in 1Q23, up 11 bps from 4Q22 Quarterly provision for credit losses increased to $7.2 million, compared to $2.1 million in 4Q22, due primarily to a partial charge-off of one C&I participation loan Net charge-offs to average loans
Slide 14: Capital
Capital Tangible common equity to tangible assets decreased 47 bps to 7.47%1 from 4Q22 Tangible book value per share of $39.431 Repurchased 161,691 shares at an average price per share of $24.50 during 1Q23 Since 4Q21, 964,144 shares have been purchased at an average price per share of $32.9
Slide 15: 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 due to the low-rate environment in 2020 and 2021 Over 65% of securities are classified as available-for-sale and reported on the balance sheet at market value Capital r
Slide 16: Small Business Lending
Small Business Lending $136.4 million in balances as of March 31, 2023 Nationwide platform providing growth capital to entrepreneurs and small business owners Top 30 Small Business Administration 7(a) lender for the SBA’s 2022 fiscal year; currently top 10 lender for SBA’s 2023 fiscal year C
Slide 17: Franchise Finance
Franchise Finance $382.2 million in balances as of March 31, 2023 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 17 Portfolio Mix by Borrower Use Portfolio Mix by State Port
Slide 18: Construction and Investor Commercial Real Estate
Construction and Investor Commercial Real Estate $300.3 million in combined balances as of March 31, 2023 Average current loan balance of $5.3 million for investor CRE Average commitment sizes for construction – Commercial construction/development: $10.6 million – Residential construction/deve
Slide 19: Single Tenant Lease Financing
Single Tenant Lease Financing $952.5 million in balances as of March 31, 2023 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 19 Portfolio Mix by Major Vertic
Slide 20: Public Finance
4% 4% 6% 4% 22% 6% 6% 2%1% 1% 3% 41% AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 A-/A3 BBB+/Baa1 BBB/Baa2 BB+/Ba1 BB/Ba2 Non-Rated 33% 13% 13% 9% 6% 6% 5% 3% 2% 2% 8% General Obligation Essential use equipment loans Lease rental revenue Utilities Revenue Short term cash flow fin (BAN) - G.O. Public hi
Slide 21: Healthcare Finance
Healthcare Finance $256.7 million in balances as of March 31, 2023 Loan portfolio focused primarily on dental practices with some exposure to veterinary practices and other specialties Average loan size of $501,000 No delinquencies in this portfolio 21 Portfolio Mix by Borrower Use Portfolio
Slide 22: C&I and Owner-Occupied Commercial Real Estate
22% 19% 16% 15% 13% 7% 8% Construction Services Manufacturing Real Estate and Rental and Leasing Investment Advice Arts, Entertainment, and Recreation Other 40% 29% 6% 4% 4% 17% IN AZ KS IL NY Other 49% 34% 17% C&I - Term Loans Owner Occupied CRE C&I - Lines of Credit C&I and Owner-Occupied Commerci
Slide 23: Residential Mortgage
Residential Mortgage $418.2 million in balances as of March 31, 2023 (includes home equity balances) Direct-to-consumer originations centrally located at corporate headquarters Focused on high quality borrowers – Average loan size of $199,000 – Average credit score at origination of 743 – Aver
Slide 24: Specialty Consumer
23% 21% 18% 28% 10% Specialty Consumer $338.1 million in balances as of March 31, 2023 Direct-to-consumer and nationwide dealer network originations Focused on high quality borrowers – Average credit score at origination of 777 – Average loan size of $24,000 Strong historical credit performa
Slide 25: First Internet Bank
First INTERNET +
Slide 26: Loan Portfolio Composition
Loan Portfolio Composition 26 1 Includes carrying value adjustments of $31.5 million, $32.5 million, $33.9 million, $35.4 million, $36.4 million, $37.5 million and $42.7 million related to terminated interest rate swaps associated with public finance loans as of March 31, 2023, December 31, 2022, Se
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 27 Dollars in thousands 2016 2017 2018 2019 2020 2021 2022 1Q23 Total equity - GAAP $153,942 $224,127 $288,735 $304,913 $330,944 $380,338 $364,974 $357,284 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible com
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 28 1 Assuming a 21% tax rate Dollars in thousands 1Q22 2Q22 3Q22 4Q22 1Q23 Total equity - GAAP $374,655 $365,332 $360,857 $364,974 $357,284 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $369,968 $360,645 $356,170 $3
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 29 Dollars in thousands 1Q22 2Q22 3Q22 4Q22 1Q23 Noninterest income $7,694 $6,820 $4,314 $5,807 $5,446 Adjustments: Mortgage-related revenue - - - - (65) Adjusted noninterest income $7,694 $6,820 $4,314 $5,807 $5,381 Noninterest expense $18,780 $17,985 $
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 30 Dollars in thousands 1Q22 2Q22 3Q22 4Q22 1Q23 Income (loss) before income taxes - GAAP 12,999$ 10,824$ 9,423$ 6,854$ (3,138)$ Adjustments: Mortgage-related revenue - - - - (65) Mortgage-related costs - - - - 3,052 Acquisition-related expenses 170 103
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 31 Dollars in thousands 1Q22 2Q22 3Q22 4Q22 1Q23 Net income (loss) - GAAP $11,209 $9,545 $8,436 $6,351 (1,305)$ Adjustments: Mortgage-related revenue - - - - (51) Mortgage-related costs - - - - 2,411 Acquisition-related expenses 134 82 - - - Write-down o