First Internet Bancorp · NASDAQ:INBK
First Internet Bancorp — Q1 2020 Earnings Presentation
24 slides from First Internet Bancorp's earnings presentation, Apr 22, 2020
Slide 1: Financial Results First Quarter 2020
Financial Results First Quarter 2020 Exhibit 99.2
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
Forward-Looking Statements & Non-GAAP Financial Measures This presentation may contain forward-looking statements with respect to the financial condition, results of operations, trends in lending policies, timing of pending acquisitions, plans, objectives, future performance or business of the Compa
Slide 3: First Quarter 2020 Highlights
First Quarter 2020 Highlights . Diluted EPS of $0.62, up 10.7% from 1Q19 Earnings . Net income of $6.0 million, up 5.7% from 1Q19 . Total revenue of $21.2 million, up 14.0% from 1Q19 . Cost of interest-bearing deposits declined 11 bps from 4Q19 to 2.24% Key Operating . Allowance for loan losses / to
Slide 4: Loan Portfolio Overview
Loan Portfolio Overview . Total loans decreased $71.4 million, or 2.4%, compared to 4Q19 and increased $52.2 million, or 1.8%, year-over-year . Overall commercial loan balances were stable as growth in healthcare finance was offset by sales of single tenant lease financing and public finance loans .
Slide 5: Deposit Composition
Deposit Composition . Total deposits increased $24.5 million, or 0.8%, compared to 4Q19 and $367.4 million, or 13.1%, year- over-year . Strong quarterly money market growth of $144.3 million, including $52.5 million in small business . CD and brokered deposit balances decreased $130.3 million compar
Slide 6: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin . Interest income earned on loans and cash Net Interest Income – GAAP and FTE1 balances declined primarily due to the impact of Dollars in millions lower interest rates following successive Federal GAAP FTE $17.8 $17.7 Reserve rate cuts $16.8 $16.9 $16.6 .
Slide 7: Net Interest Margin Drivers
Net Interest Margin Drivers . Linked quarter NIM decline was primarily attributable to the impact of falling short term interest rates on loans yields and cash balances, which remained elevated during the quarter – 12 bp negative impact . Lower deposit costs and improved deposit mix had a positive i
Slide 8: Noninterest Income
Noninterest Income . Noninterest income of $6.2 million compared to $5.4 million in 4Q19 and $2.4 million in 1Q19 . Continued strong mortgage banking revenue of $3.7 million . Gain on sale of loans of $1.8 million, up slightly from 4Q19 . Sales of $99.9 million of single tenant lease financing, publ
Slide 9: Noninterest Expense
Noninterest Expense . Noninterest expense of $13.5 million compared to $12.6 million in 4Q19 . Higher salaries and employee benefits expense due primarily to seasonality, full quarter of SBA personnel additions and higher mortgage incentive compensation . Increased loan expenses due mainly to admini
Slide 10: Asset Quality
Asset Quality . Asset quality metrics remain among the industry’s best, driven by a strong credit culture and lower-risk asset classes . Allowance for loan losses to total loans increased to 0.79% in 1Q20 from 0.74% in 4Q19, while total loan balances declined 2.4%, due primarily to adjustments to ec
Slide 11: Liquidity and Capital
Liquidity and Capital . Regulatory capital ratios are strong at the Company and Bank level . More than sufficient liquidity, supplemented by access to multiple funding sources, to handle an extended economic impact of COVID-19 . Tangible book value per share was impacted by volatility in the fixed i
Slide 12: COVID-19 Response
COVID-19 Response Supporting communities, clients and colleagues Committed to serving our stakeholders during challenging times Caring for Communities: Serving Clients: Supporting Colleagues: . Focusing on leveraging core . Stepping up client interactions to . Stressing health and well-being best se
Slide 13: COVID-19 Summary Impact: Exposure to impacted industries
COVID-19 Summary Impact Single Tenant Small Loan Exposure to impacted industries Lease C&I & Business (As of March 31, 2020, dollars in millions) Financing OOCRE Lending Construction Quick service restaurants $215.7 $2.9 Full service restaurants $213.0 $2.4 $5.8 Hotels / accommodations $10.1 $2.5 He
Slide 14: COVID-19 Summary Impact: Payment deferrals
COVID-19 Summary Impact Supporting clients through payment deferrals % of Balances (Dollars in millions) Deferrals1 with Deferrals Commercial and industrial $15.4 16.2% Single tenant lease financing $11.8 1.2% Owner-occupied CRE $6.0 8.0% Healthcare finance $289.1 75.9% Small business $21.7 30.6% To
Slide 15: Single Tenant Lease Financing
Single Tenant Lease Financing Single tenant lease financing overview: Portfolio mix by major tenant . $972.3 million in balances as of March 31, 2020 Int. Car Wash 7% Red Lobster . Long term financing of single tenant properties occupied 7% Wendy's by financially strong national and regional tenants
Slide 16: Public Finance
Public Finance Public finance overview: Borrower mix by credit rating . $627.7 million in balances as of March 31, 2020 1%3% 6% AAA/Aaa . Provides a range of credit solutions for government and 5% AA+/Aa1 not-for-profit entities AA/Aa2 . Borrowers’ needs include short-term financing, debt 43% AA-/Aa
Slide 17: Healthcare Finance
Healthcare Finance Portfolio mix by borrower Healthcare finance overview: 1% . $372.3 million in balances as of March 31, 2020 5% . Loan portfolio focused primarily on dental practices with Dentists some exposure to veterinary practices and other specialties . Borrowers’ needs include practice finan
Slide 18: Specialty Consumer
Specialty Consumer . $296.6 million in balances as of March 31, 2020 Geographically Diverse Portfolio . Direct-to-consumer and nationwide dealer network originations . Focused on high quality borrowers 22% 10% . Avg. credit score at orig. of 778 17% . Avg. loan size of $19,100 . Strong historical cr
Slide 19: Residential Mortgage
Residential Mortgage Diversified Portfolio with . $242.6 million in balances as of March 31, 2020 (includes home equity balances) Midwest Concentration . Direct-to-consumer originations centrally located at corporate headquarters 24% 10% . Focused on high quality borrowers 55% . Avg. loan size of $1
Slide 20: Small Business Lending
Small Business Lending . $67.3 million in balances as of March 31, 2020 Portfolio Mix by State . SBA will be making scheduled loan payments for 7(a) 2% IN program borrowers for a six month period 10% . These payments will be made following deferral 6% IL programs offered to borrowers impacted by COV
Slide 21: Long-term Strategy
Long-term Strategy . Manage balance sheet growth and deploy excess liquidity to fund loan growth and/or higher-cost deposit runoff . Continued loan production combined with loan sales to enhance noninterest income and improve mix of earning assets . Build capital through improved profitability and d
Slide 22: Appendix
Appendix 22 NOOR P
Slide 23: Loan Portfolio Composition
Loan Portfolio Composition Dollars in thousands 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 Commercial loans Commercial and industrial$ 121,966 $ 107,405 $ 110,560 $ 106,517 $ 88,874 $ 96,420 $ 95,227 Owner-occupied commercial real estate 71,872 77,569 75,317 71,908 74,384 73,392 74,737 Investor commercial r
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollars in thousands 1Q19 2Q19 3Q19 4Q19 1Q20 Total equity - GAAP $294,013 $296,120 $295,140 $304,913 $305,127 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $289,326 $291,433 $290,453 $300,226 $300,440 Total assets
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