Slide 1: Financial Results Fourth Quarter 2023
Financial Results Fourth 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: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights Net income of $4.1 million Diluted earnings per share of $0.48 3 Net interest margin of 1.58% and FTE net interest margin of 1.68%1, both improving by 19 bps from 3Q23 Pace of increase in deposit costs slowed to lowest point in past six quarters Capital posit
Slide 4: Loan Portfolio Overview
Loan Portfolio Overview Total portfolio loan balances increased 2.8% from 3Q23 Commercial loan balances increased $97.7 million, or 3.4%, compared to 3Q23 Consumer loan balances increased $10.4 million, or 1.3%, compared to 3Q23 4Q23 funded portfolio loan origination yields were 8.85%, relat
Slide 5: Deposit Composition
$1,710.7 42%$956.8 24% 397.6 10% $244.7 6% $212.5 5% $544.7 13% Consumer Small Business Commercial Public Funds BaaS Brokered2 $119.8 3% $268.6 7% $21.4 1% $439.4 11% $808.9 20% $212.5 5% $1,605.1 39% $591.3 14% Noninterest-bearing deposits Interest-bearing demand deposits Savings accounts Money mar
Slide 6: Uninsured Deposit Balances
Uninsured Deposit Balances 6 Estimated uninsured deposit balances represent 25% of total deposits, up from 23% in 3Q23 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 4Q23 Deposit Update
Liquidity and 4Q23 Deposit Update 7 Cash and unused borrowing capacity totaled $1.6 billion at year end – Cash balances down $115 million since 3Q23 – Currently represents 156% of total uninsured deposits and 208% of adjusted uninsured deposits Liquidity built in prior quarters deployed to fund
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 14.0% and 12.9%, respectively, from 3Q23 Improved loan mix and higher yields were partially offset by slightly higher funding costs Total loan portfolio yield impacted by loan beta lag effect on fix
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 19 bps due to higher earning asset yields, offset by slightl
Slide 10: Noninterest Income
Noninterest Income 10 Dollars in millions Noninterest Income by Type Dollars in millions Noninterest Income by Quarter Noninterest income of $7.4 million, consistent with 3Q23 Gain on sale of loans of $6.0 million, up 8.2%, compared to $5.6 million in 3Q23 – SBA loan sale volume increased 11.6%
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% 1.72% 1.83% 1.52%
Slide 12: Asset Quality
Asset Quality Allowance for credit losses to total loans of 1.01% in 4Q23, up 3 bps from 3Q23 Quarterly provision for credit losses was $3.6 million, compared to $1.9 million in 3Q23 Net charge-offs to average loans of 0.12%, compared to 0.16% in 3Q23 Nonperforming loans to total loans incre
Slide 13: Capital
Capital Tangible common equity to tangible assets increased 30 bps to 6.94%1 from 3Q23 Tangible book value per share of $41.431, up 4.7% from 3Q23 Repurchased 40,000 shares at an average price per share of $18.78 during 4Q23 Since 4Q21, 1.4 million shares have been purchased at an average pr
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 $218.5 million in balances as of December 31, 2023 Nationwide platform providing growth capital to entrepreneurs and small business owners Full year 2023 originations up 139% over 2022 9th largest Small Business Administration 7(a) lender for the SBA’s 2023 fiscal year
Slide 16: Franchise Finance
Franchise Finance $525.8 million balances as of December 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 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 $393.8 million in combined balances as of December 31, 2023 Average current loan balance of $5.5 million for investor CRE Average commitment sizes for construction – Commercial construction/development: $20.9 million – Residential construction/d
Slide 18: Single Tenant Lease Financing
Single Tenant Lease Financing $936.6 million in balances as of December 31, 2023 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 Ver
Slide 19: Public Finance
5% 10% 11% 5% 17% 9% 7% 3% 1% 32% AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 A-/A3 BBB+/Baa1 BBB/Baa2 Non-Rated 33% 14% 13% 10% 6% 6% 6% 3% 3% 2% 4% General Obligation Essential use equipment loans Lease rental revenue Water & sewer revenue Short term cash flow financing (BAN) Private Higher Educatio
Slide 20: Healthcare Finance
Healthcare Finance $222.8 million in balances as of December 31, 2023 Average loan size of $459,000 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 Veterina
Slide 21: C&I and Owner-Occupied Commercial Real Estate
C&I and Owner-Occupied Commercial Real Estate $186.6 million in combined balances as of December 31, 2023 Current C&I LOC utilization of 45% Average loan sizes C&I: $768,000 Owner-occupied CRE: $855,000 21 Portfolio by Loan Type Portfolio Mix by State Portfolio Mix by Major Industry 21 46%
Slide 22: Residential Mortgage
Residential Mortgage $419.3 million in balances as of December 31, 2023 (includes home equity balances) Historically direct-to-consumer originations centrally located at corporate headquarters Focused on high quality borrowers – Average loan size of $208,000 – Average credit score at originati
Slide 23: Specialty Consumer
23% 21% 17% 29% 10% Specialty Consumer $377.6 million in balances as of December 31, 2023 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 perfo
Slide 24: First Internet
First INTERNET +
Slide 25: Loan Portfolio Composition
Loan Portfolio Composition 25 1 Includes carrying value adjustments of $27.8 million, $29.0 million, $30.5 million, $31.5 million, $32.5 million, $37.5 million and $42.7 million related to terminated interest rate swaps associated with public finance loans as of December 31, 2023, September 30, 2023
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 26 Dollars in thousands, except for per share data 2017 2018 2019 2020 2021 2022 2023 Total equity - GAAP $224,127 $288,735 $304,913 $330,944 $380,338 $364,974 $362,795 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 4Q22 1Q23 2Q23 3Q23 4Q23 Total equity - GAAP $364,974 $355,572 $354,332 $347,744 $362,795 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 4Q22 1Q23 2Q23 3Q23 4Q23 Noninterest income $5,807 $5,446 $5,871 $7,407 $7,401 Adjustments: Mortgage-related revenue - (65) - - - Adjusted noninterest income $5,807 $5,381 $5,871 $7,407 $7,401 Noninteres
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 29 1 Assuming a 21% tax rate Dollars in thousands, except for per share data 4Q22 1Q23 2Q23 3Q23 4Q23 Income (loss) before income taxes - GAAP 6,854$ (5,349)$ 3,648$ 3,083$ 3,558$ Adjustments: Mortgage-related revenue - (65) - - - Mortgage-related costs
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 30 Dollars in thousands 4Q23 Tangible common equity $358,108 Adjustments: Accumulated other comprehensive loss 29,375 Adjusted tangible common equity $387,483 Tangible assets $5,164,336 Adjustments: Cash in excess of $300 million (105,898) Adjusted tangi