First Internet Bancorp · NASDAQ:INBK
First Internet Bancorp — Q4 2018 Earnings Presentation
31 slides from First Internet Bancorp's earnings presentation, Jan 29, 2019
Slide 1: Investor Presentation Fourth Quarter 2018
Investor Presentation Fourth Quarter 2018 Exhibit 99.1
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 tangible common equity (“TCE”), tangible assets (“TA”), tangible book val
Slide 4: A Pioneer in Branchless Banking
A Pioneer in Branchless Banking • Digital bank with unique business model and nearly 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
Slide 5: Nationwide Branchless Deposit Franchise
Nationwide Branchless Deposit Franchise $363.7 million $2.7 Billion 13.6% Total Deposits* $440.7 million 16.5% $1,284.2 million 48.1% 32% 5-year CAGR* Nationwide consumer, $398.0 million $184.7 million small business and 6.9% 14.9% 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 Commercial banking franchise focused on specialized national businesses, as well as conventional lending in select regional markets National Regional . Single tenant lease financing . C&I – Central Indiana . C&I – Arizona . Public finance . Investor CR
Slide 8: Attractive Loan Growth Opportunities
Attractive Loan Growth Opportunities . Further market penetration of niche specialty lending . Public finance – geographic and product expansion; increased network of origination sources . Healthcare finance – geographic and product expansion . Entrance into new verticals – complement existing lines
Slide 9: 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 . Top Rated Online Business Bank in 2017 – Advisory HQ . TechPoint 2016 Mira Award “Te
Slide 10: 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 $3,542 Dollars in millions $2,716 CAGR: 34.6% vs. Peers1 at 14.4% CAGR: 40.2% vs. Peers1 at 17.4% $2,768 $2,091 $1,854 $1,251 $1,2
Slide 11: Profitability Driven By Disciplined Capital Deployment
Profitability Driven By Disciplined Capital Deployment Capital has been deployed into new loan verticals, driving earnings growth Net Income1,2,3 Diluted EPS1,2,3 $2.50 $23,814 $2.30 $2.39 Dollars in thousands $1.96 $2.30 $21,900 $2.13 $17,072 $1.51 $12,074 $8,929 $15,226 $0.96 $4,593 $4,324 2013 20
Slide 12: 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 - FTE Noninterest Expense / Average Assets1 1.85% Dollars in millions $16.9 $16.6 $17.3 $16.9 $15.5 $16.4 1.63% 1.50%
Slide 13: 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 profitability . Capital offerings: . 2Q18: raised $57.5 million of common equity . 3Q17: raised $55.0 million of common equity .
Slide 14: Capital Deployment
Capital Deployment . Combination of lower risk asset profile and top quartile asset quality performance provides ability to maximize capital leverage . Existing capital level provides capacity to handle significant balance sheet growth . Active balance sheet management to ensure growth and capital a
Slide 15: Deposit Composition
Deposit Composition . Total deposits increased $586.4 million, or 28.1%, since 4Q17 Total Deposits - $2.7 Billion Total Non-Time Deposits - $731.4 Million As of December 31, 2018 As of December 31, 2018 1 $43.3 $38.5 2% $121.1 1% 4% $170.9 23% $528.5 20% $395.8 54% $77.4 11% $1,940.0 73% $87.3 12% N
Slide 16: Loan Portfolio Overview
Loan Portfolio Overview $2,716.2 Strategic loan growth has led to a more diversified portfolio $2,493.6 7% $2,374.0 2% Dollars in millions 8% 1 $2,209.4 Commercial and Industrial 8% 2% $2,091.2 2% 9% 9% 2% 34% Commercial Real Estate $1,868.5 3% 11% 35% 37% Single Tenant Lease Financing 3% 38% 38% $1
Slide 17: Commercial Real Estate
Commercial Real Estate Commercial real estate balances increased Single Tenant Lease Financing $105.0 million, or 12.2%, since 4Q17 Portfolio Diversity Red As of % of 7.0% Lobster Dollars in millions December 31, 2018 total 6.7% Walgreen's Single tenant lease financing $919.4 95.3% 5.8% Construction
Slide 18: Commercial & Industrial
Commercial & Industrial Commercial & industrial overview: As of % of . Originations / commitments over the past Dollars in millions December 31, 2018 total twelve months exceeded $105 million Commercial & industrial $114.4 56.5% Owner-occupied CRE 88.0 43.5% . Primarily serves the borrowing and trea
Slide 19: Public Finance
Public Finance Public finance originations/commitments Portfolio Composition 2.1% 1.2% during the past twelve months exceeded 2.2% 0.1% General Obligation 3.0% Essential use equipment $286 million loans 5.8% Lease rental revenue Public Finance Balances Water & Sewer Revenue Dollars in millions Dolla
Slide 20: Healthcare Finance
Healthcare Finance Healthcare finance originations/commitments over Portfolio Composition 1.1% 0.3% the past twelve months exceeded $97 million 1.3% Practice Refinance Healthcare Finance Balances 16.1% or Acquisition Dollars in millions Owner Occupied Dollars in millions $117.0$65.6 CRE $48.9$89.5 P
Slide 21: Residential Mortgage
Residential Mortgage . Award-winning national online origination platform Well Diversified Mortgage Originations* . Geographic diversity provides opportunity to benefit from strengths in certain regions when 18.2% 19.3% there is weakness in 34.5% others . Highly efficient application and underwritin
Slide 22: Excellent Asset Quality
Excellent Asset Quality Asset quality has improved significantly while balance sheet growth has continued NPAs / Total Assets NPLs / Total Loans 0.37% 0.90% 0.50% 0.09% 0.37% 0.31% 0.21% 0.04% 0.04% 0.10% 0.02% 0.03% 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Allowance for Loan Loss
Slide 23: Interest Rate Risk Management
Interest Rate Risk Management . 4Q18 FTE net interest margin of 2.07%1 declined 16 bps compared to 3Q18 . 16 bps decline driven by interest rate compression / flattening yield curve and significant decline in prepayment activity . Ongoing hedging strategy in place . Enhances interest rate sensitivit
Slide 24: 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 25: Appendix
Appendix 25 BANCORP
Slide 26: Fourth Quarter 2018 Highlights
Fourth Quarter 2018 Highlights . Quarterly net income of $3.6 million, including a $2.4 pre-tax write-down of legacy OREO, up from $3.5 million in 4Q17 . Quarterly diluted EPS of $0.35, or adjusted diluted earnings per share of $0.53 excluding the OREO write-down . Quarterly net interest income of $
Slide 27: Loan Portfolio Composition
Loan Portfolio Composition Dollars in thousands 2015 2016 2017 1Q18 2Q18 3Q18 4Q18 Commercial loans Commercial and industrial $ 102,000 $ 102,437 $ 122,940 $ 119,893 $ 107,394 $ 105,489 $ 114,382 Owner-occupied commercial real estate 44,462 57,668 75,768 81,998 86,068 93,568 87,962 Investor commerci
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 2013 2014 2015 2016 2017 2018 Total equity - GAAP $90,908 $96,785 $104,330 $153,942 $224,127 $288,735 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $86,221 $92,098 $99,643 $149,255 $219,
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 2013 2014 2015 2016 2017 2018 Net Income $ 4,593 $ 4,324 $ 8,929 $ 12,074 $ 15,226 $ 21,900 Adjustments: Income tax provision 1,566 2,126 4,736 5,911 7,702 2,052 Provision for loan losses 324 349 1,946 4,330 4,872 3,892 Pre-tax, pre-
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 2013 2014 2015 2016 2017 2018 Diluted average common shares outstanding 3,050,001 4,507,995 4,554,219 5,239,082 7,149,302 9,508,653 Diluted earnings per share - GAAP $ 1.51 $ 0.96 $ 1.96 $ 2.30 $ 2.13 $ 2.30 Adjustments: Effect of write-down of other rea
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in millions 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Net interest income $ 11.5 $ 13.0 $ 14.2 $ 15.4 $ 15.4 $ 15.5 $ 16.0 $ 15.4 Adjustments: Fully-taxable equivalent adjustments 1 0.3 0.5 1.3 1.5 1.0 1.1 1.3 1.5 Net interest income - FTE $ 11.8 $
First Internet Bancorp — Q4 2018 Earnings Presentation on 6ix