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| 8-K - 8-K - First Internet Bancorp | inbk-3q2015xer8k.htm |
First Internet Bancorp Reports Record Quarterly Net Income
Quarterly earnings per share of $0.51, up 2.0% from second quarter 2015
and up 82.1% from third quarter 2014
Indianapolis, Indiana, October 22, 2015 - First Internet Bancorp (the “Company”) (NASDAQ: INBK), the parent company of First Internet Bank (the “Bank”) (www.firstib.com), announced today financial and operational results for the third quarter 2015. Third quarter net income was a record $2.32 million and diluted earnings per share were $0.51. This compares with second quarter net income of $2.27 million and diluted earnings per share of $0.50 and third quarter 2014 net income of $1.28 million and diluted earnings per share of $0.28.
David Becker, Chairman, President and Chief Executive Officer, commented, “To produce six consecutive quarters of earnings growth requires a commitment throughout the organization to execute our growth strategy. Our diverse platform of loan origination capabilities and revenue sources has allowed us to produce this consistent earnings growth and mitigate risk. Nationwide platforms, such as single tenant lease financing and consumer lending, provide geographic diversity in asset classes with historically strong credit performance. Our mortgage unit, a direct-to-consumer model, also originates loans in all 50 states, with the vast majority consisting of conforming loans sold into the secondary market. ‘High touch’ lending areas involving greater complexity, such as commercial and industrial as well as commercial real estate, are conducted locally with our lenders in close contact with the customers they serve.
“As a result, we have been able to generate significant organic growth as we prudently manage risk and asset quality. Net interest income continues to grow as we attract more customers to the Bank. What’s more, nearly half of the commercial loan balances we added during the quarter funded in September. We expect these loans to have an even greater impact on interest income in future periods.”
Highlights for the third quarter 2015 included:
▪ | Diluted earnings per share of $0.51, increasing $0.01, or 2.0%, compared to the linked quarter and $0.23, or 82.1%, compared to the third quarter 2014 |
▪ | Solid quarterly performance |
• | Return on average assets of 0.82% |
• | Return on average shareholders’ equity of 9.14% |
• | Return on average tangible common equity of 9.58% |
▪ | Total loan growth of $62.3 million, or 7.7%, compared to June 30, 2015 and $180.6 million, or 26.0%, compared to September 30, 2014 |
▪ | Continued growth in net interest income, increasing $0.3 million, or 3.5%, compared to the linked quarter and $2.2 million, or 38.2%, compared to the third quarter 2014 |
▪ | Net interest margin (“NIM”) of 2.84% compared to 2.87% for the linked quarter and 2.68% for the third quarter 2014 |
▪ | Solid capital levels supporting continued loan growth |
• | Tangible common equity to tangible assets of 8.46% |
• | Common equity tier 1 capital ratio of 10.60% |
• | Tier 1 capital ratio of 10.60% |
• | Total risk-based capital ratio of 11.75% |
▪ | Strong asset quality |
• | Nonperforming loans to total loans receivable totaled 0.02% as of September 30, 2015 |
• | Net recoveries to average loans receivable of 0.07% were recognized during the third quarter |
Net Interest Income and Net Interest Margin
Net interest income for the third quarter was $7.8 million compared to $7.6 million for the second quarter and $5.7 million for the third quarter 2014. Total interest income for the third quarter was $10.5 million, increasing $0.4 million, or 4.0%, compared to the second quarter and $2.6 million, or 32.6%, compared to the third quarter 2014. The increase in total interest income compared to the linked quarter was driven by a $48.6 million, or 6.2%, increase in average loans receivable and a $9.8 million, or 5.4%, increase in average investment balances, partially offset by a decline in average loans held-for-sale balances of $8.9 million, or 23.2%. A decline of 13 bps in the yield earned on the loan portfolio from 4.44% in the second quarter to 4.31% in the third quarter was due primarily to lower prepayment fees related to commercial real estate loans as well as accelerated premium and deferred fee amortization in the residential mortgage and consumer loan portfolios. The yield earned on the investment portfolio during the third quarter rose 9 bps to 2.30% from 2.21% for the linked quarter.
Total interest expense for the third quarter was $2.7 million, increasing $0.1 million, or 5.4%, compared to the second quarter and $0.4 million, or 18.6%, compared to the third quarter 2014. Average interest-bearing deposit balances increased $32.2 million, or 3.9%, compared to the linked quarter with the related cost of funds increasing 1 bp from 1.04% in the second quarter to 1.05% in the third quarter. During the third quarter, $15.0 million of short-term Federal Home Loan Bank advances were converted to long-term funding as the Company took advantage of attractive long-term fixed interest rates, which negatively impacted interest expense during the quarter but are expected to provide a longer term benefit in a rising interest rate environment. The cost of funds related to Federal Home Loan Bank advances increased 1 bp from 1.02% in the second quarter to 1.03% in the third quarter.
Net interest margin was 2.84% for the third quarter compared to 2.87% for the second quarter and 2.68% for the third quarter 2014.
Noninterest Income
Noninterest income for the third quarter was $2.4 million compared to $2.5 million for the second quarter and $1.9 million for the third quarter 2014. The decrease of $0.1 million, or 4.1%, compared to the linked quarter was driven by a decline of $0.1 million, or 5.4%, in mortgage banking revenue resulting primarily from lower origination volumes, partially offset by higher gain on sale margins.
Noninterest Expense
Noninterest expense for the third quarter was $6.2 million compared to $6.3 million for the second quarter and $5.8 million for the third quarter 2014. The decrease of $0.1 million, or 1.9%, compared to the linked quarter was due to lower salaries and employee benefits and loan expenses, partially offset by higher marketing expenses and other expenses. The decline of $0.3 million in salaries and employee benefits compared to the linked quarter was due to costs associated with staffing-related changes recognized in the second quarter and the expense savings related to these changes.
Income Taxes
Income tax expense was $1.2 million for the third quarter, resulting in an effective tax rate of 34.6%, compared to $1.2 million and an effective tax rate of 33.7% for the linked quarter and $0.7 million and an effective tax rate of 34.0% for the third quarter 2014.
Loans and Credit Quality
Total loans as of September 30, 2015 were $876.6 million, increasing $62.3 million, or 7.7%, compared to June 30, 2015 and $180.6 million, or 26.0%, compared to September 30, 2014. Total commercial loan balances were $508.7 million as of September 30, 2015, increasing $59.8 million, or 13.3%, compared to June 30, 2015 and $200.7 million, or 65.2%, compared to September 30, 2014. Continued strong production in single tenant lease financing balances contributed significantly to the growth as balances increased $49.3 million, or 17.6%, compared to the second quarter and $163.4 million, or 98.6%, compared to the third quarter 2014. Construction loan originations were also strong during the third quarter as balances increased $10.0 million, or 49.8%, compared to the second quarter and $12.3 million, or 68.4%, compared to the third quarter 2014. Commercial and industrial and owner-occupied commercial real estate production remained solid as balances increased $3.2 million on a combined basis, or 2.5%, compared to June 30, 2015 and $28.1 million, or 27.1%, compared to September 30, 2014. Also contributing to growth during the third quarter was continued production in consumer lending as balances for trailers and recreational vehicles increased $3.1 million on a combined basis, or 3.1%, compared to June 30, 2015 and $6.9 million, or 7.1%, compared to September 30, 2014.
Credit quality continued to remain strong as nonperforming loans to total loans receivable were 0.02% as of September 30, 2015, consistent with the prior quarter and down 4 bps from 0.06% as of September 30, 2014. Additionally, nonperforming assets to total assets declined to 0.41% as of September 30, 2015 from 0.43% as of June 30, 2015 and 0.55% as of September 30, 2014. The allowance for loan losses was $7.7 million as of September 30, 2015 compared to $7.1 million as of June 30, 2015 and $5.5 million as of September 30, 2014. The allowance as a percentage of total nonperforming loans was 3,723.8% as of September 30, 2015 compared to 3,762.2% as of June 30, 2015 and 1,366.0% as of September 30, 2014. The allowance as a percentage of total loans receivable increased to 0.88% as of September 30, 2015 compared to 0.87% as of June 30, 2015 and 0.79% as of September 30, 2014.
Net recoveries of $0.1 million were recognized during the third quarter, resulting in net recoveries to average loans of 0.07% compared to 0.20% for the second quarter and 0.27% for the third quarter 2014.
Capital
During the third quarter, total shareholders’ equity increased $3.0 million, due primarily to net income earned during the quarter and the change in the unrealized gain/loss related to the investment portfolio, partially offset by declared dividends. As of September 30, 2015, the Company’s common equity tier 1, tier 1 and total risk-based capital ratios declined to 10.60%, 10.60% and 11.75% from 11.12%, 11.12% and 12.28% as of June 30, 2015, respectively, due to an increase in risk-weighted assets resulting primarily from commercial loan growth for the quarter. Tangible common equity to tangible assets declined 20 bps during the third quarter to 8.46% due primarily to strong balance sheet growth. Tangible book value per share increased to $21.90 as of September 30, 2015 from $21.23 as of June 30, 2015.
Subsequent to September 30, 2015, the Company issued $10.0 million in subordinated notes (the “Notes”) with an institutional accredited investor through a private placement offering. The Notes were issued on October 15, 2015 and bear a fixed rate of interest of 6.4375% per year, payable quarterly, and mature on October 1, 2025. The Notes include a right of prepayment, without penalty, on any interest payment date on or after the fifth anniversary of the closing date. The Notes have been structured to qualify as Tier 2 capital under regulatory guidelines. The Company intends to use the proceeds from the placement for general corporate purposes, including the contribution of capital to the Bank to support continued organic growth.
About First Internet Bancorp
First Internet Bancorp is the parent company of First Internet Bank, which opened for business in 1999 as the nation’s first state-chartered, FDIC-insured institution to operate solely via the Internet. With customers in all 50 states, First Internet Bank offers consumers services including checking, savings, money market, certificates of deposit and IRA accounts as well as consumer loans, residential mortgages, residential construction loans and home equity products. For commercial clients, it provides commercial real estate loans, commercial and industrial loans and treasury management services. First Internet Bank has been recognized as one of the “Best Banks to Work For” by American Banker Magazine as well as a “Top Workplace” by The Indianapolis Star. Additional information about the Company is available at www.firstinternetbancorp.com and additional information about the Bank, including its products and services, is available at www.firstib.com.
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: failures of or interruptions in the communications and information systems on which we rely to conduct our business; our plans to grow our commercial real estate and commercial and industrial loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; fluctuations in interest rates; general economic conditions; risks relating to the regulation of financial institutions; and other factors identified in reports we file with the SEC. All statements in this press release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.
Non-GAAP Financial Measures
This press release 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, tangible assets, tangible book value per common share, return on average tangible common equity and tangible common equity to tangible assets are used by the Company’s management to measure the strength of its capital and its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures provide a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”
Contact Information: | |||
Investors/Analysts | Media | ||
Paula Deemer | Nicole Lorch | ||
(317) 428-4628 | Senior Vice President, Retail Banking | ||
investors@firstib.com | (317) 532-7906 | ||
nlorch@firstib.com | |||
First Internet Bancorp | ||||||||||||||||||||
Summary Financial Information (unaudited) | ||||||||||||||||||||
Amounts in thousands, except per share data | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||||||
Net income | $ | 2,323 | $ | 2,265 | $ | 1,282 | $ | 6,651 | $ | 2,859 | ||||||||||
Per share and share information | ||||||||||||||||||||
Earnings per share - basic | $ | 0.51 | $ | 0.50 | $ | 0.29 | $ | 1.47 | $ | 0.64 | ||||||||||
Earnings per share - diluted | 0.51 | 0.50 | 0.28 | 1.46 | 0.63 | |||||||||||||||
Dividends declared per share | 0.06 | 0.06 | 0.06 | 0.18 | 0.18 | |||||||||||||||
Book value per common share | 22.95 | 22.28 | 21.35 | 22.95 | 21.35 | |||||||||||||||
Tangible book value per common share | 21.90 | 21.23 | 20.29 | 21.90 | 20.29 | |||||||||||||||
Common shares outstanding | 4,484,513 | 4,484,513 | 4,439,575 | 4,484,513 | 4,439,575 | |||||||||||||||
Average common shares outstanding: | ||||||||||||||||||||
Basic | 4,532,360 | 4,529,823 | 4,497,762 | 4,526,377 | 4,496,228 | |||||||||||||||
Diluted | 4,574,455 | 4,550,034 | 4,511,291 | 4,549,447 | 4,505,801 | |||||||||||||||
Performance ratios | ||||||||||||||||||||
Return on average assets | 0.82 | % | 0.84 | % | 0.59 | % | 0.83 | % | 0.45 | % | ||||||||||
Return on average shareholders' equity | 9.14 | % | 9.15 | % | 5.36 | % | 8.95 | % | 4.11 | % | ||||||||||
Return on average tangible common equity | 9.58 | % | 9.60 | % | 5.64 | % | 9.39 | % | 4.32 | % | ||||||||||
Net interest margin | 2.84 | % | 2.87 | % | 2.68 | % | 2.85 | % | 2.60 | % | ||||||||||
Capital ratios 1 | ||||||||||||||||||||
Tangible common equity to tangible assets | 8.46 | % | 8.66 | % | 9.77 | % | 8.46 | % | 9.77 | % | ||||||||||
Tier 1 leverage ratio | 8.81 | % | 8.93 | % | 10.52 | % | 8.81 | % | 10.52 | % | ||||||||||
Common equity tier 1 capital ratio | 10.60 | % | 11.12 | % | 13.22 | % | 10.60 | % | 13.22 | % | ||||||||||
Tier 1 capital ratio | 10.60 | % | 11.12 | % | 13.22 | % | 10.60 | % | 13.22 | % | ||||||||||
Total risk-based capital ratio | 11.75 | % | 12.28 | % | 14.45 | % | 11.75 | % | 14.45 | % | ||||||||||
Asset quality | ||||||||||||||||||||
Nonperforming loans | $ | 206 | $ | 188 | $ | 400 | $ | 206 | $ | 400 | ||||||||||
Nonperforming assets | 4,724 | 4,765 | 5,067 | 4,724 | 5,067 | |||||||||||||||
Nonperforming loans to loans receivable | 0.02 | % | 0.02 | % | 0.06 | % | 0.02 | % | 0.06 | % | ||||||||||
Nonperforming assets to total assets | 0.41 | % | 0.43 | % | 0.55 | % | 0.41 | % | 0.55 | % | ||||||||||
Allowance for loan losses to: | ||||||||||||||||||||
Loans receivable | 0.88 | % | 0.87 | % | 0.79 | % | 0.88 | % | 0.79 | % | ||||||||||
Nonperforming loans | 3,723.8 | % | 3,762.2 | % | 1,366.0 | % | 3,723.8 | % | 1,366.0 | % | ||||||||||
Net recoveries to average loans receivable | (0.07 | )% | (0.20 | )% | (0.27 | )% | (0.11 | )% | (0.02 | )% | ||||||||||
Average balance sheet information | ||||||||||||||||||||
Loans receivable | $ | 835,938 | $ | 787,339 | $ | 632,403 | $ | 789,908 | $ | 570,751 | ||||||||||
Securities available-for-sale | 191,634 | 181,864 | 139,569 | 173,083 | 161,861 | |||||||||||||||
Other earning assets | 37,638 | 49,001 | 38,964 | 42,746 | 63,403 | |||||||||||||||
Total interest-earning assets | 1,094,622 | 1,056,485 | 839,183 | 1,039,898 | 818,651 | |||||||||||||||
Total assets | 1,123,741 | 1,085,118 | 868,361 | 1,068,705 | 849,932 | |||||||||||||||
Noninterest-bearing deposits | 23,267 | 20,697 | 21,960 | 22,080 | 19,661 | |||||||||||||||
Interest-bearing deposits | 854,889 | 822,735 | 718,100 | 813,521 | 702,383 | |||||||||||||||
Total deposits | 878,156 | 843,432 | 740,060 | 835,601 | 722,044 | |||||||||||||||
Shareholders' equity | 100,885 | 99,333 | 94,840 | 99,365 | 93,110 | |||||||||||||||
1 Regulatory capital ratios are preliminary pending filing of the Company's regulatory reports
First Internet Bancorp | ||||||||||||
Condensed Consolidated Balance Sheets (unaudited) | ||||||||||||
Amounts in thousands | ||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 1,460 | $ | 1,713 | $ | 1,137 | ||||||
Interest-bearing demand deposits | 19,185 | 28,889 | 38,470 | |||||||||
Interest-bearing time deposits | 1,250 | 1,250 | 2,000 | |||||||||
Securities available-for-sale, at fair value | 202,565 | 190,767 | 128,203 | |||||||||
Loans held-for-sale | 27,773 | 29,872 | 27,547 | |||||||||
Loans receivable | 876,578 | 814,243 | 695,929 | |||||||||
Allowance for loan losses | (7,671 | ) | (7,073 | ) | (5,464 | ) | ||||||
Net loans receivable | 868,907 | 807,170 | 690,465 | |||||||||
Accrued interest receivable | 3,581 | 3,550 | 2,803 | |||||||||
Federal Home Loan Bank of Indianapolis stock | 6,946 | 6,946 | 2,943 | |||||||||
Cash surrender value of bank-owned life insurance | 12,625 | 12,524 | 12,226 | |||||||||
Premises and equipment, net | 8,508 | 8,120 | 7,075 | |||||||||
Goodwill | 4,687 | 4,687 | 4,687 | |||||||||
Other real estate owned | 4,488 | 4,488 | 4,545 | |||||||||
Accrued income and other assets | 4,195 | 4,669 | 4,782 | |||||||||
Total assets | $ | 1,166,170 | $ | 1,104,645 | $ | 926,883 | ||||||
Liabilities | ||||||||||||
Noninterest-bearing deposits | $ | 22,338 | $ | 20,994 | $ | 20,359 | ||||||
Interest-bearing deposits | 877,412 | 835,509 | 717,611 | |||||||||
Total deposits | 899,750 | 856,503 | 737,970 | |||||||||
Advances from Federal Home Loan Bank | 150,946 | 140,935 | 86,871 | |||||||||
Subordinated debt | 2,937 | 2,915 | 2,852 | |||||||||
Accrued interest payable | 112 | 108 | 82 | |||||||||
Accrued expenses and other liabilities | 9,513 | 4,276 | 4,334 | |||||||||
Total liabilities | 1,063,258 | 1,004,737 | 832,109 | |||||||||
Shareholders' equity | ||||||||||||
Voting common stock | 72,409 | 72,218 | 71,705 | |||||||||
Retained earnings | 30,977 | 28,928 | 23,951 | |||||||||
Accumulated other comprehensive loss | (474 | ) | (1,238 | ) | (882 | ) | ||||||
Total shareholders' equity | 102,912 | 99,908 | 94,774 | |||||||||
Total liabilities and shareholders' equity | $ | 1,166,170 | $ | 1,104,645 | $ | 926,883 | ||||||
First Internet Bancorp | |||||||||||||||||||
Condensed Consolidated Statements of Income (unaudited) | |||||||||||||||||||
Amounts in thousands, except per share data | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Interest income | |||||||||||||||||||
Loans | $ | 9,326 | $ | 9,043 | $ | 7,218 | $ | 26,759 | $ | 19,918 | |||||||||
Securities - taxable | 994 | 945 | 684 | 2,661 | 2,421 | ||||||||||||||
Securities - non-taxable | 116 | 59 | — | 175 | 58 | ||||||||||||||
Other earning assets | 100 | 83 | 45 | 258 | 195 | ||||||||||||||
Total interest income | 10,536 | 10,130 | 7,947 | 29,853 | 22,592 | ||||||||||||||
Interest expense | |||||||||||||||||||
Deposits | 2,260 | 2,137 | 1,958 | 6,350 | 5,740 | ||||||||||||||
Other borrowed funds | 437 | 421 | 316 | 1,318 | 940 | ||||||||||||||
Total interest expense | 2,697 | 2,558 | 2,274 | 7,668 | 6,680 | ||||||||||||||
Net interest income | 7,839 | 7,572 | 5,673 | 22,185 | 15,912 | ||||||||||||||
Provision (credit) for loan losses | 454 | 304 | (112 | ) | 1200 | (38 | ) | ||||||||||||
Net interest income after provision (credit) for loan losses | 7,385 | 7,268 | 5,785 | 20,985 | 15,950 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges and fees | 202 | 193 | 179 | 571 | 533 | ||||||||||||||
Mortgage banking activities | 2,095 | 2,214 | 1,638 | 7,195 | 3,767 | ||||||||||||||
Gain on sale of securities | — | — | 54 | — | 538 | ||||||||||||||
Loss on asset disposals | (27 | ) | (33 | ) | (28 | ) | (74 | ) | (59 | ) | |||||||||
Other | 104 | 102 | 100 | 306 | 297 | ||||||||||||||
Total noninterest income | 2,374 | 2,476 | 1,943 | 7,998 | 5,076 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 3,446 | 3,787 | 3,264 | 10,811 | 9,219 | ||||||||||||||
Marketing, advertising and promotion | 544 | 334 | 381 | 1,330 | 1,148 | ||||||||||||||
Consulting and professional fees | 544 | 564 | 409 | 1,700 | 1,307 | ||||||||||||||
Data processing | 248 | 233 | 245 | 729 | 718 | ||||||||||||||
Loan expenses | 97 | 181 | 208 | 459 | 458 | ||||||||||||||
Premises and equipment | 676 | 691 | 742 | 2,009 | 2,204 | ||||||||||||||
Deposit insurance premium | 163 | 160 | 155 | 473 | 437 | ||||||||||||||
Other | 489 | 377 | 381 | 1,280 | 1,292 | ||||||||||||||
Total noninterest expense | 6,207 | 6,327 | 5,785 | 18,791 | 16,783 | ||||||||||||||
Income before income taxes | 3,552 | 3,417 | 1,943 | 10,192 | 4,243 | ||||||||||||||
Income tax provision | 1,229 | 1,152 | 661 | 3,541 | 1,384 | ||||||||||||||
Net income | $ | 2,323 | $ | 2,265 | $ | 1,282 | $ | 6,651 | $ | 2,859 | |||||||||
Per common share data | |||||||||||||||||||
Earnings per share - basic | $ | 0.51 | $ | 0.50 | $ | 0.29 | $ | 1.47 | $ | 0.64 | |||||||||
Earnings per share - diluted | $ | 0.51 | $ | 0.50 | $ | 0.28 | $ | 1.46 | $ | 0.63 | |||||||||
Dividends declared per share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 | |||||||||
All periods presented have been reclassified to conform to the current period classification.
First Internet Bancorp | ||||||||||||||||||||||||||||||||
Average Balances and Rates (unaudited) | ||||||||||||||||||||||||||||||||
Amounts in thousands | ||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | ||||||||||||||||||||||||||||||
Average Balance | Interest/Dividends | Yield/ Cost | Average Balance | Interest/Dividends | Yield/ Cost | Average Balance | Interest/Dividends | Yield/ Cost | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Interest-earning assets | ||||||||||||||||||||||||||||||||
Loans, including loans held-for-sale | $ | 865,350 | $ | 9,326 | 4.28 | % | $ | 825,620 | $ | 9,043 | 4.39 | % | $ | 660,650 | $ | 7,218 | 4.33 | % | ||||||||||||||
Securities - taxable | 176,722 | 994 | 2.23 | % | 174,057 | 945 | 2.18 | % | 139,569 | 684 | 1.94 | % | ||||||||||||||||||||
Securities - non-taxable | 14,912 | 116 | 3.09 | % | 7,807 | 59 | 3.03 | % | — | — | 0.00 | % | ||||||||||||||||||||
Other earning assets | 37,638 | 100 | 1.05 | % | 49,001 | 83 | 0.68 | % | 38,964 | 45 | 0.46 | % | ||||||||||||||||||||
Total interest-earning assets | 1,094,622 | 10,536 | 3.82 | % | 1,056,485 | 10,130 | 3.85 | % | 839,183 | 7,947 | 3.76 | % | ||||||||||||||||||||
Allowance for loan losses | (7,223 | ) | (6,545 | ) | (5,248 | ) | ||||||||||||||||||||||||||
Noninterest earning-assets | 36,342 | 35,178 | 34,426 | |||||||||||||||||||||||||||||
Total assets | $ | 1,123,741 | $ | 1,085,118 | $ | 868,361 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||||||||
Regular savings accounts | $ | 25,500 | $ | 38 | 0.59 | % | $ | 23,873 | $ | 34 | 0.57 | % | $ | 16,932 | $ | 25 | 0.59 | % | ||||||||||||||
Interest-bearing demand deposits | 75,965 | 105 | 0.55 | % | 76,095 | 104 | 0.55 | % | 69,635 | 96 | 0.55 | % | ||||||||||||||||||||
Money market accounts | 297,545 | 533 | 0.71 | % | 282,015 | 503 | 0.72 | % | 272,697 | 501 | 0.73 | % | ||||||||||||||||||||
Certificates and brokered deposits | 455,879 | 1,584 | 1.38 | % | 440,752 | 1,496 | 1.36 | % | 358,836 | 1,336 | 1.48 | % | ||||||||||||||||||||
Total interest-bearing deposits | 854,889 | 2,260 | 1.05 | % | 822,735 | 2,137 | 1.04 | % | 718,100 | 1,958 | 1.08 | % | ||||||||||||||||||||
Other borrowed funds | 139,731 | 437 | 1.24 | % | 137,421 | 421 | 1.23 | % | 29,748 | 316 | 4.21 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 994,620 | 2,697 | 1.08 | % | 960,156 | 2,558 | 1.07 | % | 747,848 | 2,274 | 1.21 | % | ||||||||||||||||||||
Noninterest-bearing deposits | 23,267 | 20,697 | 21,960 | |||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 4,969 | 4,932 | 3,713 | |||||||||||||||||||||||||||||
Total liabilities | 1,022,856 | 985,785 | 773,521 | |||||||||||||||||||||||||||||
Shareholders' equity | 100,885 | 99,333 | 94,840 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,123,741 | $ | 1,085,118 | $ | 868,361 | ||||||||||||||||||||||||||
Net interest income | $ | 7,839 | $ | 7,572 | $ | 5,673 | ||||||||||||||||||||||||||
Interest rate spread | 2.74 | % | 2.78 | % | 2.55 | % | ||||||||||||||||||||||||||
Net interest margin | 2.84 | % | 2.87 | % | 2.68 | % | ||||||||||||||||||||||||||
First Internet Bancorp | |||||||||||||||||||||
Average Balances and Rates (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2015 | September 30, 2014 | ||||||||||||||||||||
Average Balance | Interest/Dividends | Yield/Cost | Average Balance | Interest/Dividends | Yield/Cost | ||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||
Loans, including loans held for sale | $ | 824,069 | $ | 26,759 | 4.34 | % | $ | 593,387 | $ | 19,918 | 4.49 | % | |||||||||
Securities - taxable | 165,456 | 2,661 | 2.15 | % | 159,474 | 2,421 | 2.03 | % | |||||||||||||
Securities - non-taxable | 7,627 | 175 | 3.07 | % | 2,387 | 58 | 3.25 | % | |||||||||||||
Other earning assets | 42,746 | 258 | 0.81 | % | 63,403 | 195 | 0.41 | % | |||||||||||||
Total interest-earning assets | 1,039,898 | 29,853 | 3.84 | % | 818,651 | 22,592 | 3.69 | % | |||||||||||||
Allowance for loan losses | (6,555 | ) | (5,373 | ) | |||||||||||||||||
Noninterest earning-assets | 35,362 | 36,654 | |||||||||||||||||||
Total assets | $ | 1,068,705 | $ | 849,932 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Regular savings accounts | $ | 23,836 | $ | 104 | 0.58 | % | $ | 18,160 | $ | 81 | 0.60 | % | |||||||||
Interest-bearing demand deposits | 75,824 | 311 | 0.55 | % | 70,831 | 290 | 0.55 | % | |||||||||||||
Money market accounts | 284,709 | 1,528 | 0.72 | % | 267,672 | 1,462 | 0.73 | % | |||||||||||||
Certificates and brokered deposits | 429,152 | 4,407 | 1.37 | % | 345,720 | 3,907 | 1.51 | % | |||||||||||||
Total interest-bearing deposits | 813,521 | 6,350 | 1.04 | % | 702,383 | 5,740 | 1.09 | % | |||||||||||||
Other borrowed funds | 129,089 | 1,318 | 1.37 | % | 29,831 | 940 | 4.21 | % | |||||||||||||
Total interest-bearing liabilities | 942,610 | 7,668 | 1.09 | % | 732,214 | 6,680 | 1.22 | % | |||||||||||||
Noninterest-bearing deposits | 22,080 | 19,661 | |||||||||||||||||||
Other noninterest-bearing liabilities | 4,650 | 4,947 | |||||||||||||||||||
Total liabilities | 969,340 | 756,822 | |||||||||||||||||||
Shareholders' equity | 99,365 | 93,110 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,068,705 | $ | 849,932 | |||||||||||||||||
Net interest income | $ | 22,185 | $ | 15,912 | |||||||||||||||||
Interest rate spread | 2.75 | % | 2.47 | % | |||||||||||||||||
Net interest margin | 2.85 | % | 2.60 | % | |||||||||||||||||
First Internet Bancorp | |||||||||||||||||||||
Loans and Deposits (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Commercial loans | |||||||||||||||||||||
Commercial and industrial | $ | 89,762 | 10.2 | % | $ | 89,316 | 11.0 | % | $ | 72,099 | 10.4 | % | |||||||||
Owner-occupied commercial real estate | 42,117 | 4.8 | % | 39,405 | 4.8 | % | 31,637 | 4.5 | % | ||||||||||||
Investor commercial real estate | 17,483 | 2.0 | % | 20,163 | 2.5 | % | 20,567 | 3.0 | % | ||||||||||||
Construction | 30,196 | 3.4 | % | 20,155 | 2.5 | % | 17,936 | 2.6 | % | ||||||||||||
Single tenant lease financing | 329,149 | 37.6 | % | 279,891 | 34.4 | % | 165,738 | 23.8 | % | ||||||||||||
Total commercial loans | 508,707 | 58.0 | % | 448,930 | 55.2 | % | 307,977 | 44.3 | % | ||||||||||||
Consumer loans | |||||||||||||||||||||
Residential mortgage | 209,507 | 23.9 | % | 207,703 | 25.5 | % | 220,499 | 31.7 | % | ||||||||||||
Home equity | 47,319 | 5.4 | % | 49,662 | 6.1 | % | 61,799 | 8.9 | % | ||||||||||||
Trailers | 66,749 | 7.6 | % | 66,080 | 8.1 | % | 65,085 | 9.3 | % | ||||||||||||
Recreational vehicles | 36,800 | 4.2 | % | 34,366 | 4.2 | % | 31,591 | 4.5 | % | ||||||||||||
Other consumer loans | 2,638 | 0.3 | % | 2,711 | 0.3 | % | 3,398 | 0.5 | % | ||||||||||||
Total consumer loans | 363,013 | 41.4 | % | 360,522 | 44.2 | % | 382,372 | 54.9 | % | ||||||||||||
Net deferred loan fees, premiums and discounts | 4,858 | 0.6 | % | 4,791 | 0.6 | % | 5,580 | 0.8 | % | ||||||||||||
Total loans receivable | $ | 876,578 | 100.0 | % | $ | 814,243 | 100.0 | % | $ | 695,929 | 100.0 | % | |||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Deposits | |||||||||||||||||||||
Noninterest-bearing deposits | $ | 22,338 | 2.5 | % | $ | 20,994 | 2.5 | % | $ | 20,359 | 2.8 | % | |||||||||
Interest-bearing demand deposits | 79,031 | 8.8 | % | 77,822 | 9.1 | % | 71,762 | 9.7 | % | ||||||||||||
Regular savings accounts | 26,316 | 2.9 | % | 24,405 | 2.8 | % | 17,503 | 2.4 | % | ||||||||||||
Money market accounts | 314,105 | 34.9 | % | 278,791 | 32.5 | % | 275,901 | 37.4 | % | ||||||||||||
Certificates of deposits | 444,396 | 49.4 | % | 440,936 | 51.5 | % | 334,636 | 45.3 | % | ||||||||||||
Brokered deposits | 13,564 | 1.5 | % | 13,555 | 1.6 | % | 17,809 | 2.4 | % | ||||||||||||
Total deposits | $ | 899,750 | 100.0 | % | $ | 856,503 | 100.0 | % | $ | 737,970 | 100.0 | % | |||||||||
First Internet Bancorp | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
Amounts in thousands, except per share data | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||||||
Total equity - GAAP | $ | 102,912 | $ | 99,908 | $ | 94,774 | $ | 102,912 | $ | 94,774 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible common equity | $ | 98,225 | $ | 95,221 | $ | 90,087 | $ | 98,225 | $ | 90,087 | ||||||||||
Total assets - GAAP | $ | 1,166,170 | $ | 1,104,645 | $ | 926,883 | $ | 1,166,170 | $ | 926,883 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible assets | $ | 1,161,483 | $ | 1,099,958 | $ | 922,196 | $ | 1,161,483 | $ | 922,196 | ||||||||||
Common shares outstanding | 4,484,513 | 4,484,513 | 4,439,575 | 4,484,513 | 4,439,575 | |||||||||||||||
Book value per common share | $ | 22.95 | $ | 22.28 | $ | 21.35 | $ | 22.95 | $ | 21.35 | ||||||||||
Effect of goodwill | (1.05 | ) | (1.05 | ) | (1.06 | ) | (1.05 | ) | (1.06 | ) | ||||||||||
Tangible book value per common share | $ | 21.90 | $ | 21.23 | $ | 20.29 | $ | 21.90 | $ | 20.29 | ||||||||||
Total shareholders' equity to assets ratio | 8.82 | % | 9.04 | % | 10.23 | % | 8.82 | % | 10.23 | % | ||||||||||
Effect of goodwill | (0.36 | )% | (0.38 | )% | (0.46 | )% | (0.36 | )% | (0.46 | )% | ||||||||||
Tangible common equity to tangible assets ratio | 8.46 | % | 8.66 | % | 9.77 | % | 8.46 | % | 9.77 | % | ||||||||||
Total average equity - GAAP | $ | 100,885 | $ | 99,333 | $ | 94,840 | $ | 99,365 | $ | 93,110 | ||||||||||
Adjustments: | ||||||||||||||||||||
Average goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Average tangible common equity | $ | 96,198 | $ | 94,646 | $ | 90,153 | $ | 94,678 | $ | 88,423 | ||||||||||
Return on average shareholders' equity | 9.14 | % | 9.15 | % | 5.36 | % | 8.95 | % | 4.11 | % | ||||||||||
Effect of goodwill | 0.44 | % | 0.45 | % | 0.28 | % | 0.44 | % | 0.21 | % | ||||||||||
Return on average tangible common equity | 9.58 | % | 9.60 | % | 5.64 | % | 9.39 | % | 4.32 | % | ||||||||||