First Internet Bancorp Reports Strong Earnings Growth in Second Quarter, Record First Half Results Business Wire INDIANAPOLIS -- July 24, 2013 First Internet Bancorp (NASDAQ: INBK), parent company of First Internet Bank of Indiana (www.firstib.com), a premier nationwide provider of online retail banking services and commercial banking services, today announced unaudited financial results for the three months and six months ended June 30, 2013. “We are reporting strong second quarter results,” said David Becker, Chairman and CEO. “Year over year, second quarter net income rose 34%, our commercial loan portfolio grew 66%, and non-interest income increased 76%.” Highlights for the quarter ended June 30, 2013: *Net income was a record $1.71 million or $0.59 per diluted share in the second quarter 2013 compared with $1.28 million or $0.45 per diluted share in the second quarter 2012. *Return on average assets in second quarter 2013 increased to 1.07% from 0.83% in the prior year’s second quarter, and return on average equity rose to 10.86% compared with 8.92% in second quarter 2012. *Total assets were $656.77 million at June 30, 2013, the highest in the company’s history, compared with $623.95 million at June 30, 2012. *Mortgage originations grew 25% to $232.54 million in second quarter 2013 compared to $186.06 in the second quarter 2012. *The company’s second quarter dividend of $0.06, following the company’s 3-for-2 stock split in second quarter 2013, was the equivalent of a 50% increase of its quarterly cash dividend paid in first quarter 2013. *First Internet Bancorp common stock was added to the Russell Microcap Index, the MSCI USA Micro Cap Index and the ABA NASDAQ Community Bank Index. Highlights for the six months ended June 30, 2013: *For the six months ended June 30, 2013, net income was $3.20 million or $1.11 per diluted share, a company record for first half earnings. *Commercial real estate and commercial & industrial loan activity was strong, with $45.54 million in commercial loans closed in first half 2013 compared with $26.21 million in first half 2012. *Total non-interest income, driven by gain on loans sold, rose to $6.89 million in first half 2013 compared with $4.14 million in first half 2012. “First Internet’s second quarter and first half results reflect the continuing expansion of the bank and progress toward our goal of being a strong national presence in retail and commercial banking,” said David Becker, Chairman and CEO. “We have added experienced talent to our retail and commercial lending teams and have also strengthened our finance and support teams to enhance efficiency, risk management and regulatory compliance.” Second Quarter Income Statement Reflects Year-Over-Year Growth in Interest and Non-Interest Income For the quarter ended June 30, 2013, net income was $1.71 million or $0.59 per diluted share. Net interest income after provision for loan losses was $4.21 million in second quarter 2013, up 27% over second quarter 2012. Total interest expense in second quarter 2013 declined to $1.92 million compared with $2.16 million in second quarter 2012. The company held interest rates on deposits steady as core deposits climbed, allowing the company to reduce its use of higher-cost Federal Home Loan Bank borrowings. The company’s average cost of funds was 1.35% in second quarter 2013, compared with 1.58% in second quarter 2012. Net interest margin increased to 2.78% at June 30, 2013 compared with 2.63% at June 30, 2012. Loan growth, lower interest expense and management of the company’s investment portfolio contributed to the increase. Total non-interest income in second quarter 2013 increased 76% to $3.82 million over second quarter 2012. Gains on loans sold and secondary market hedges contributed to the increase. Total non-interest expense in second quarter 2013 was $5.62 million compared with $3.80 million in second quarter 2012. Increased salaries and benefits expense reflected continued investment in experienced talent, primarily in mortgage lending and commercial banking. To support mortgage lending growth, the company established a residential mortgage loan processing center in Tempe, Arizona, and expanded facilities in the Indianapolis area. Becker stated: “While we remain committed to our efficient and highly scalable operating model with minimal reliance on brick and mortar facilities, supporting current and future growth requires investments in quality people and critical facilities.” Balance Sheet, Deposit Growth, Loan Activity and Asset Quality Highlights The company’s total assets of $656.77 million at June 30, 2013 demonstrated steady year-over-year growth, up from $623.95 million at June 30, 2012. Total deposits at June 30, 2013 were up 7.5%, to $561.16 million over the same quarter in the prior year. Net loans after allowance for loan losses were $360.80 million at June 30, 2013 compared with $341.57 million at June 30, 2012, with the portfolio showing strong growth in commercial loans. Commercial loans comprised 35% of the company’s total loan portfolio at June 30, 2013 compared with 22% at June 30, 2012. Commercial real estate loans increased 64% to $112.68 million at June 30, 2013, compared with $68.90 million at June 30, 2012. Commercial & industrial lending grew to $15.13 million at June 30, 2013, compared with $8.12 million at June 30, 2012. The company’s commercial banking business, which in the first half was augmented with cash management services and a business credit card, continued to demonstrate gains. Residential mortgage originations demonstrated positive year-over-year and consecutive quarter trends. The total value of mortgages originated grew to $232.54 million in second quarter 2013 compared with $186.06 million in the second quarter 2012. Purchase mortgages accounted for 24% of the company’s residential loan originations. The company’s loan and asset quality remained strong, with non-performing loans at June 30, 2013 declining to $2.89 million from $8.37 million at June 30, 2012. The ratio of non-performing loans to total assets was 0.71% in second quarter 2013 compared with 2.19% in second quarter 2012. Capital Position The bank and holding company continue to exceed all regulatory capital requirements, with a Tier 1 leverage ratio of 9.00% at the bank and 9.13% at the holding company. Outlook Becker commented: “We have a robust pipeline for commercial loans. Somewhat improved economic conditions seem to be having a positive impact on commercial real estate lending opportunities, with higher levels of activity in construction and income properties. First Internet’s C&I business is performing well, and while we face considerable competition, we are committed to making quality loans.” About First Internet Bancorp First Internet Bancorp (NASDAQ: INBK) is the parent company of First Internet Bank of Indiana. First Internet Bank opened for business in 1999. The Bancorp became the parent of the Bank effective March 21, 2006. About First Internet Bank First Internet Bank of Indiana is the first state-chartered, FDIC-insured institution to operate solely via the Internet and has customers in all 50 states. Deposit services include checking accounts, regular and money market savings accounts with industry-leading interest rates, CDs and IRAs. First Internet Bank also offers consumer loans, conforming mortgages, jumbo mortgages, home equity loans and lines of credit, and commercial loans. The bank is a wholly owned subsidiary of First Internet Bancorp. Safe Harbor Statement This press release may contain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance or business of the company. Forward-looking statements are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the information in the forward-looking statements. Factors that may cause such differences include: changes in interest rates; risks associated with the regulation of financial institutions and holding companies, including capital requirements and the costs of regulatory compliance; failures or interruptions in communications and information systems; general economic conditions and conditions in the lending markets; competition; the plans to grow commercial lending; the loss of key members of management and other matters discussed in the press release. For a further list and description of such risks and uncertainties, see our periodic reports filed with the U.S. Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be set forth in our periodic reports. First Internet Bancorp Consolidated Balance Sheets (unaudited) (in thousands) June 30, 2013 June 30, 2012 Cash and due from banks 1,355 1,344 Interest-bearing demand deposits 14,093 34,658 Total cash and cash equivalents 15,448 36,002 Interest bearing time deposits 2,500 - Securities - AFS 193,934 182,671 Loans held for sale 42,271 34,960 Gross loans 362,983 343,340 Net deferred expenses 3,344 3,954 Allowance for loan losses (5,527) (5,727) Net loans 360,800 341,567 Accrued interest receivable 2,271 2,264 FHLB stock 2,943 2,943 Bank owned life insurance 11,735 11,346 Goodwill 4,687 4,687 Other real estate owned 5,156 750 Premises and equipment 6,740 894 Other assets 8,280 5,861 Total assets 656,765 623,945 Non-interest bearing demand deposits 16,915 13,588 Interest bearing demand deposits 73,321 64,458 Savings and money market deposits 230,977 200,287 Time deposits 239,949 243,692 Total deposits 561,162 522,025 FHLB advances 23,740 40,629 Subordinated debt 2,745 - Accrued interest payable 100 115 Accrued payroll and related expenses 1,469 1,140 Other liabilities 6,371 1,786 Total liabilities 595,587 565,695 Common stock 41,826 41,346 Retained earnings 20,938 15,323 Accumulated other comprehensive (1,586) 1,581 income / (loss) Shareholders’ equity 61,178 58,250 Total liabilities & equity 656,765 623,945 First Internet Bancorp Consolidated Statements of Income (unaudited) (in thousands, except share data) Quarter Ended June 30, 2013 June 30, 2012 Securities income 1,277 1,320 Loan income 4,861 4,716 Other interest income 21 19 Total interest income 6,159 6,055 Deposit interest expense 1,656 1,826 Other interest expense 267 338 Total interest expense 1,923 2,164 Net interest income 4,236 3,891 Provision for loan losses 24 564 Net interest income after provision 4,212 3,327 Service charges and fees 179 166 Gain on loans sold 2,249 2,034 Gain on secondary marketing hedge 1,208 - Other-than-temporary impairment loss - (92) Loss on asset disposals (4) (31) Other non-interest income 186 98 Total non-interest income 3,818 2,175 Salaries and employee benefits 2,846 1,929 Marketing, advertising and promotion 455 341 Consulting and professional fees 561 272 Data processing 232 238 Loan expenses 285 303 Premises and equipment 715 350 Deposit insurance premiums 115 121 Other non-interest expense 415 241 Total non-interest expense 5,624 3,795 Income before taxes 2,406 1,707 Tax provision 694 428 Net Income 1,712 1,279 Diluted weighted average shares 2,888,260 2,867,763 Diluted EPS 0.59 0.45 First Internet Bancorp Consolidated Statements of Income (unaudited) (in thousands, except share data) Six Months Ended June 30, 2013 June 30, 2012 Securities income 2,046 2,666 Loan income 9,903 9,513 Other interest income 39 37 Total interest income 11,988 12,216 Deposit interest expense 3,284 3,646 Other interest expense 575 677 Total interest expense 3,859 4,323 Net interest income 8,129 7,893 Provision for loan losses 158 1,134 Net interest income after provision 7,971 6,759 Service charges and fees 338 361 Gain on loans sold 5,260 3,785 Gain on secondary marketing hedge 1,208 - Other-than-temporary impairment loss (34) (92) Loss on asset disposals (268) (101) Other non-interest income 384 190 Total non-interest income 6,888 4,143 Salaries and employee benefits 5,225 3,920 Marketing, advertising and promotion 827 732 Consulting and professional fees 1,214 599 Data processing 446 468 Loan expenses 365 488 Premises and equipment 1,116 762 Deposit insurance premiums 227 219 Other non-interest expense 850 489 Total non-interest expense 10,270 7,677 Income before taxes 4,589 3,225 Tax provision 1,389 800 Net Income 3,200 2,425 Diluted weighted average shares 2,887,207 2,866,174 Diluted EPS 1.11 0.85 Contact: First Internet Bancorp Nicole Lorch, 317-532-7906 firstname.lastname@example.org
First Internet Bancorp Reports Strong Earnings Growth in Second Quarter, Record First Half Results
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