First Internet Bancorp · NASDAQ:INBK
First Internet Bancorp — Q2 2018 Earnings Presentation
28 slides from First Internet Bancorp's earnings presentation, Jul 30, 2018
Slide 1: First Internet Bancorp Investor Presentation Second Quarter 2018
First Internet Bancorp Investor Presentation Second 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: Performance Summary
Performance Summary Strong balance sheet growth has driven increased earnings and overall growth in tangible book value per share Diluted Earnings Per Share1,2,3 Pre-Tax, Pre-Provision Earnings3 Tangible Book Value Per Share3 $0.71 $27.25 $0.71 Dollars in thousands $8,198 $0.67 $7,925 $7,740 $0.64 $
Slide 5: Second Quarter 2018 Highlights
Second Quarter 2018 Highlights . Quarterly net income of $6.0 million, up 50% over 2Q17 . Quarterly diluted EPS of $0.67, up 10% over 2Q17 . Quarterly net interest income of $15.5 million, up 19% over 2Q17 . Total quarterly loan growth of $164.6 million, or 7% . Total year-over-year loan growth of $
Slide 6: Corporate Overview
Corporate Overview Corporate Summary 2Q18 Financial Information . First Internet Bank launched in 1999 . Total assets $3.1 billion . First state-chartered FDIC-insured . Total loans $2.4 billion Internet bank . Total deposits $2.4 billion . Headquartered in Fishers, IN with an . 1 office in Tempe, A
Slide 7: Differentiated Business Model
Differentiated Business Model . Nationwide consumer banking provider . Proven online / mobile retail deposit platform using scalable technology backed by exceptional customer service . Low cost delivery channel creates customer value through competitive rates and low fees . Commercial banking franch
Slide 8: Strategic Objectives
Strategic Objectives . Drive revenue growth and positive operating leverage . Achieve consistent strong profitability . Deploy capital in an accretive manner focused on building shareholder value . Capitalize on consumer trends by capturing greater deposit market share among digital banking adopters
Slide 9: Corporate Recognition
Corporate Recognition 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-level talent . Top Rated Online Business Bank in 2017 – Advisory HQ . TechPoint 2016 Mira Award “Tech-enabled
Slide 10: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth Execution of the business strategy has driven consistent and sustainable balance sheet growth Total Assets Total Loans Dollars in millions $3,116 Dollars in millions $2,374 $2,768 $2,091 CAGR: 35.2% CAGR: 41.3% $1,854 $1,251 $1,270 $954 $971 $732 $802 $501 2013 2014 2
Slide 11: Five Year Balance Sheet Growth
Five Year Balance Sheet Growth . Five year balance sheet growth rates far Five Year Total Asset Growth exceed the median rates for similar 374% institutions . INBK growth over this period has been primarily organic as opposed to through 82% acquisitions INBK SNL Small Cap US Banks Five Year Total Lo
Slide 12: Earnings and Profitability
Earnings and Profitability The Company remains focused on driving earnings growth and improving profitability Net Income1,2 Net Interest Margin - FTE1 $6,028 $6,008 Dollars in thousands $5,344 $4,895 2.57% 2.53% 2.52% 2.59% 2.47% 2.48% 2.41% 2.33% $3,710 $4,001 $3,098 $2,832 $3,498 3Q16 4Q16 1Q17 2Q
Slide 13: Increasing Economies of Scale
Increasing Economies of Scale Scalable, technology-driven model delivers increasing efficiency and is a key component driving improved operating leverage Net Interest Income Noninterest Expense / Average Assets Dollars in thousands $15,360 $15,415 $15,461 $14,191 1.93% $12,974 1.85% 1.77% $11,457 $1
Slide 14: Interest Rate Risk Management
Interest Rate Risk Management . 2Q18 FTE net interest margin of 2.33%1 declined 8 bps compared to 1Q18 . 3 bps of decline due to elevated prepayment activity in healthcare finance and consumer portfolios and a special dividend received from FHLB in 1Q18 . 5 bps of decline due to interest rate compre
Slide 15: Loan Portfolio Overview
Loan Portfolio Overview 11% 11% 9% 9% 8% 1 15% 13% 2% 3% 3% 3% 2% Commercial and industrial 5% 7% Commercial real estate 38% 38% 37% 44% 42% Single tenant lease financing 39% 49% Public finance 21% 22% 24% Healthcare finance 11% 14% 1% 3% 27% 2% 2% Residential mortgage/HE/HELOCs 19% 19% 17% 16% 16%
Slide 16: Commercial Real Estate
Commercial Real Estate Commercial real estate balances increased Single Tenant Lease Financing $113.2 million, or 14.1%, since 2Q17 Portfolio Diversity As of % of Dollars in millions June 30, 2018 total 7.6% Red Lobster Single tenant lease financing $864.0 94.2% 6.6% Walgreen's Construction 46.8 5.1
Slide 17: Commercial & Industrial
Commercial & Industrial Commercial & industrial overview: Commercial & industrial balances increased . Originations / commitments over the past $18.9 million, or 10.9%, since 2Q17 twelve months exceeded $87 million As of % of . Primarily serves the borrowing and treasury Dollars in millions June 30,
Slide 18: Public Finance
Public Finance Public finance originations/commitments Portfolio Composition during the past twelve months exceeded 1.6% General Obligation/G.O. 0.2% Equivalent $404 million 2.7% Water & sewer revenue 2.9% Public Finance Balances 3.1% Lease rental revenue 6.5% Essential use equipment Dollars in mill
Slide 19: Healthcare Finance
Healthcare Finance Healthcare finance originations/commitments over Portfolio Composition the past twelve months exceeded $67 million 1.0% Healthcare Finance Balances 1.7% Practice Refinance or 14.4% Acquisition Dollars in millions $65.6 Owner Occupied $48.9 CRE $31.6 Equipment 82.9% $12.4 Projects
Slide 20: Residential Mortgage
Residential Mortgage . Award-winning national Last 12 Months of Mortgage Originations – Regional Distribution online origination platform . Highly efficient application and underwriting process 18.6% 20.1% . Sales and marketing 32.6% efforts re-focused on purchase mortgage business 17.7% . Full rang
Slide 21: Nationwide Branchless Deposit Franchise
Nationwide Branchless Deposit Franchise . Nationwide consumer, Total Deposits – $2.4 Billion – Regional Distribution small business and As of June 30, 2018 commercial deposit base . Scalable technology $344.9 million and customer 14.4% convenience supported $411.3 million by exceptional service 17.2
Slide 22: Deposit Composition
Deposit Composition . Total deposits increased $662.2 million, or 38.2%, since 2Q17 . Treasury management, small business, municipal and health savings accounts provide significant opportunities for increasing lower-cost deposits Total Deposits - $2.4 Billion Total Non-Time Deposits - $767.9 Million
Slide 23: Asset Quality
Asset Quality Asset quality has improved significantly while balance sheet growth has continued on a strong upward trend NPAs / Total Assets NPLs / Total Loans 0.37% 0.90% 0.50% 0.09% 0.37% 0.31% 0.21% 0.17% 0.04% 0.04% 0.02% 0.01% 2013 2014 2015 2016 2017 2Q18 2013 2014 2015 2016 2017 2Q18 Allowanc
Slide 24: Capital
Capital . Following the initial public offering in late 2013, the Company deployed capital to fund commercial loan growth, driving revenue growth and improved profitability . Capital offerings: . 2Q16: raised $22.8 million of common equity . 3Q16: issued $25.0 million in publicly traded subordinated
Slide 25: Investment Summary
Investment Summary . Strong earnings growth improving profitability . Demonstrated track record of deploying capital to fuel loan growth while maintaining strong asset quality . Investments in commercial lending platforms are producing results . Geographic and credit product diversity provide abilit
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Total equity - GAAP $137,154 $153,942 $157,491 $163,830 $220,867 $224,127 $224,824 $282,087 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Net Income $ 3,098 $ 3,710 $ 2,832 $ 4,001 $ 4,895 $ 3,498 $ 6,028 $ 6,008 Adjustments: Income tax provision 1,521 1,671 1,023 1,464 1,694 3,521 862 781 Provision for loan losses 2,204 256 1,03
Slide 28: First Internet Bancorp Second Quarter 2018
First Internet Bancorp Investor Presentation Second Quarter 2018
First Internet Bancorp — Q2 2018 Earnings Presentation on 6ix