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| 8-K - 8-K - First Internet Bancorp | inbk-3q2016xer8k.htm |
First Internet Bancorp Reports Record Quarterly Net Income
Quarterly net income up 33% year-over-year
Fishers, Indiana, October 20, 2016 - First Internet Bancorp (the “Company”) (NASDAQ: INBK), the parent company of First Internet Bank (www.firstib.com), announced today financial and operational results for the third quarter 2016.
David Becker, Chairman, President and Chief Executive Officer, commented, “Once again, we produced record quarterly net income as we continue to deliver on our growth strategy. Our execution has been impressive: loans are up over 36% and assets are up over 56% compared to this period last year.
“To support this growth, we successfully completed a subordinated debt offering in the third quarter, which followed our equity offering in the second quarter.
“We serve an ever-increasing, nationwide customer base with a broad range of innovative products and services. We are exceptionally pleased with our continued success in commercial real estate lending. Additionally, mortgage banking performed very well this quarter.”
Third quarter net income was a record $3.1 million and diluted earnings per share were $0.55. This compares with second quarter net income of $2.8 million and diluted earnings per share of $0.57 and third quarter 2015 net income of $2.3 million and diluted earnings per share of $0.51. The third quarter’s diluted earnings per share results reflect the full impact of the 1,035,766 common shares issued during the second quarter through an underwritten offering and an “at-the-market” (“ATM”) equity offering program.
During the third quarter, the Company charged-off the full balance of a commercial and industrial loan it placed on nonaccrual status during the second quarter. The outstanding balance of the loan was $1.6 million and the associated specific allowance was $0.5 million. As a result, the provision for loan losses for the third quarter includes $1.1 million related to the charge-off of this loan, reducing after-tax net income by $0.7 million and diluted earnings per share by $0.13.
Highlights for the third quarter 2016 include:
▪ | Diluted earnings per share of $0.55, decreasing $0.02, or 3.5%, compared to the linked quarter and increasing $0.04, or 7.8%, compared to the third quarter 2015 |
• | Excluding the charge-off discussed above, net income was $3.8 million and diluted earnings per share were $0.68 |
▪ | Solid quarterly performance |
• | Return on average assets of 0.71%; 0.88% excluding the charge-off above |
• | Return on average shareholders’ equity of 9.08%; 11.20% excluding the charge-off above |
• | Return on average tangible common equity of 9.41%; 11.60% excluding the charge-off above |
▪ | Total loan growth of $87.3 million, or 7.9%, compared to June 30, 2016 and $322.4 million, or 36.8%, compared to September 30, 2015 |
▪ | Total deposit growth of $104.7 million, or 7.5%, compared to June 30, 2016 and $593.9 million, or 66.0%, compared to September 30, 2015 |
▪ | Net interest income of $10.3 million, increasing $1.0 million, or 11.1%, compared to the linked quarter and $2.5 million, or 31.9%, compared to the third quarter 2015 |
▪ | Noninterest income of $4.9 million, increasing $1.2 million, or 30.7%, compared to the linked quarter and $2.5 million, or 106.3%, compared to the third quarter 2015 |
▪ | Total capital enhanced following the subordinated notes offering |
• | Tangible common equity to tangible assets of 7.28% |
• | Tier 1 leverage ratio of 7.62% |
• | Common equity tier 1 capital ratio of 10.07% |
• | Tier 1 capital ratio of 10.07% |
• | Total risk-based capital ratio of 13.67% |
▪ | Strong asset quality |
• | Nonperforming loans to total loans of 0.09% as of September 30, 2016 |
• | Net charge-offs to average loans of 0.57%; 0.03% excluding the charge-off above |
Net Interest Income and Net Interest Margin
Net interest income for the third quarter was $10.3 million compared to $9.3 million for the second quarter and $7.8 million for the third quarter 2015. Total interest income for the third quarter was $15.5 million, increasing $1.5 million, or 10.7%, compared to the second quarter and $4.9 million, or 46.8%, compared to the third quarter 2015. The increase in total interest income compared to the linked quarter was driven by an $82.8 million, or 7.7%, increase in average loan balances and a $98.9 million, or 27.6%, increase in average investment balances. The growth in average loan balances was partially offset by a modest decline of 4 bps in the yield earned on the loan portfolio to 4.21% for the third quarter from 4.25% for the second quarter. The yield earned on the investment portfolio increased 5 bps to 2.42% for the third quarter from 2.37% for the second quarter. In total, the Company’s yield on interest-earning assets increased 3 bps during the third quarter to 3.62% from 3.59% for the second quarter.
Total interest expense for the third quarter was $5.1 million, increasing $0.5 million, or 10.0%, compared to the second quarter and $2.4 million, or 90.3%, compared to the third quarter 2015. Average interest-bearing deposit balances increased $100.5 million, or 7.8%, compared to the linked quarter with the related cost of funds increasing 2 bps from 1.23% in the second quarter to 1.25% in the third quarter. The average interest-bearing deposit balance growth was driven primarily by an increase in average certificates of deposit balances of $98.3 million, or 12.3%, compared to the linked quarter. Overall, the total cost of interest-bearing liabilities increased 1 bp during the third quarter to 1.31% from 1.30% for the second quarter.
Net interest margin was 2.42% for the third quarter compared to 2.39% for the second quarter and 2.84% for the third quarter 2015. The Company deployed its excess liquidity during the third quarter as average cash balances declined $46.0 million, or 51.6%, compared to the second quarter and growth in loan and investment securities balances outpaced deposit growth.
Noninterest Income
Noninterest income for the third quarter was $4.9 million compared to $3.7 million for the second quarter and $2.4 million for the third quarter 2015. The increase of $1.2 million, or 30.7%, compared to the linked quarter was driven by an increase of $1.1 million, or 34.8%, in mortgage banking revenue due to increases in mortgage originations and sales as well as higher gain on sale margins.
Noninterest Expense
Noninterest expense for the third quarter was $8.4 million compared to $7.9 million for the second quarter and $6.2 million for the third quarter 2015. Excluding the lease impairment of $0.1 million related to the former headquarters location recognized in premises and equipment in the second quarter, the increase of $0.7 million, or 8.6%, compared to the linked quarter was due primarily to higher salaries and employee benefits, deposit insurance premium expense and premises and equipment. The increase in salaries and employee benefits resulted primarily from higher incentive compensation related to increased mortgage production and personnel growth. The increase in deposit insurance was due to the new methodology implemented by the FDIC as of July 1, 2016 used to calculate the assessment rate. The increase in premises and equipment was due to expenses associated with the Company’s new headquarters location.
Income Taxes
Income tax expense was $1.5 million for the third quarter, resulting in an effective tax rate of 32.9%, compared to $1.4 million and an effective tax rate of 33.4% for the linked quarter and $1.2 million and an effective tax rate of 34.6% for the third quarter 2015.
Loans and Credit Quality
Total loans as of September 30, 2016 were $1.2 billion, increasing $87.3 million, or 7.9%, compared to June 30, 2016 and $322.4 million, or 36.8%, compared to September 30, 2015. Total commercial loan balances were $793.9 million as of September 30, 2016, increasing $69.0 million, or 9.5%, compared to June 30, 2016 and $285.2 million, or 56.1%, compared to September 30, 2015. The growth in commercial loan balances was due primarily to strong production in single tenant lease financing as balances increased $71.0 million, or 14.2%, compared to June 30, 2016 and $242.8 million, or 73.8%, compared to September 30, 2015. Construction loan production was solid as balances increased $3.0 million, or 5.7%, compared to June 30, 2016 and $26.2 million, or 86.7%, compared to September 30, 2015. Commercial and industrial and owner-occupied commercial real estate balances decreased $4.9 million on a combined basis, or 3.1%, compared to June 30, 2016 but increased $20.9 million, or 15.9%, compared to September 30, 2015.
Total consumer loan balances were $401.9 million as of September 30, 2016, increasing $19.1 million, or 5.0%, compared to June 30, 2016 and $38.9 million, or 10.7%, compared to September 30, 2015. Due primarily to the Company’s recent initiative in financing home improvement loans, other consumer loans continued to grow as balances increased $12.9 million, or 57.0%, compared to June 30, 2016 and $32.8 million, or 1,244.4%, compared to September 30, 2015. Growth in recreational vehicle lending was solid as balances increased $4.9 million, or 11.0%, compared to June 30, 2016 and $12.5 million, or 33.9%, compared to September 30, 2015. The trailer portfolio also contributed to the growth as balances increased $3.6 million, or 4.9%, compared to June 30, 2016 and $11.7 million, or 17.5%, compared to September 30, 2015.
Credit quality continued to remain strong as total delinquencies 30 days or more past due increased modestly to 0.13% as a percent of total loans as of September 30, 2016 from 0.09% as of June 30, 2016. Due primarily to the charge-off of the commercial and industrial loan discussed above, nonperforming loans to total loans dropped to 0.09% as of September 30, 2016 from 0.51% as of June 30, 2016 and nonperforming assets to total assets declined to 0.31% as of September 30, 2016 from 0.60% as of June 30, 2016.
The allowance for loan losses was $10.6 million as of September 30, 2016 compared to $10.0 million as of June 30, 2016 and $7.7 million as of September 30, 2015. Due primarily to the charged-off commercial and industrial loan, the allowance as a percentage of total nonperforming loans increased to 932.1% as of September 30, 2016 from 177.6% as of June 30, 2016. The allowance as a percentage of total loans was 0.88% as of September 30, 2016 compared to 0.90% as of June 30, 2016 and 0.88% as of September 30, 2015.
Net charge-offs of $1.7 million were recognized during the third quarter, resulting in net charge-offs to average loans of 0.57% as compared to 0.05% for the second quarter and net recoveries of 0.07% for the third quarter 2015. Excluding the $1.6 million balance of the charged-off commercial and industrial loan, net charge-offs totaled $0.1 million and net charge-offs to average loans were 0.03%. The provision for loan losses in the third quarter was $2.2 million compared to $0.9 million for the second quarter and $0.5 million for the third quarter 2015. As discussed above, $1.1 million of the third quarter’s provision was due to the charged-off commercial and industrial loan. The remaining $1.1 million was driven primarily by growth in the loan portfolio.
Capital
During the third quarter, total shareholders’ equity increased $1.5 million, due primarily to net income earned during the quarter, partially offset by the change in the unrealized gain/loss related to the investment portfolio and declared dividends. As of September 30, 2016, the Company’s tier 1 leverage, common equity tier 1, tier 1 and total risk-based capital ratios were 7.62%, 10.07%, 10.07% and 13.67% compared to 8.08%, 10.66%, 10.66% and 12.54% as of June 30, 2016, respectively. The declines in the tier 1 leverage, common equity tier 1 and tier 1 capital ratios were due to increases in average assets and risk-weighted assets resulting primarily from loan growth during the third quarter. The total risk-based capital ratio increased compared to the linked quarter as the impact of the increase in risk-weighted assets was more than offset by the issuance of $25.0 million of subordinated notes during the quarter which qualify as tier 2 capital, a component of total capital for regulatory purposes. Tangible common equity to tangible assets decreased 44 bps during the third quarter to 7.28% due primarily to balance sheet growth. Tangible book value per share increased to $23.94 as of September 30, 2016 from $23.67 as of June 30, 2016 and $21.90 as of September 30, 2015.
About First Internet Bancorp
First Internet Bancorp is the parent company of First Internet Bank of Indiana, 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, a “Best Place to Work in Indiana” by a consortium of statewide resources, and 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; failure of 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 U.S. Securities and Exchange Commission. 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, tangible common equity to tangible assets, adjusted net income, adjusted net charge-offs (recoveries), adjusted diluted earnings per share, adjusted net charge-offs (recoveries) to average loans, adjusted return on average assets, adjusted return on average shareholders’ equity and adjusted return on average tangible common equity 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 | ||
Investor Relations | Senior Vice President, Retail Banking | ||
(317) 428-4628 | (317) 532-7906 | ||
investors@firstib.com | 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, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | ||||||||||||||||
Net income | $ | 3,098 | $ | 2,834 | $ | 2,323 | $ | 8,364 | $ | 6,651 | ||||||||||
Per share and share information | ||||||||||||||||||||
Earnings per share - basic | $ | 0.55 | $ | 0.57 | $ | 0.51 | $ | 1.66 | $ | 1.47 | ||||||||||
Earnings per share - diluted | 0.55 | 0.57 | 0.51 | 1.65 | 1.46 | |||||||||||||||
Dividends declared per share | 0.06 | 0.06 | 0.06 | 0.18 | 0.18 | |||||||||||||||
Book value per common share | 24.79 | 24.52 | 22.95 | 24.79 | 22.95 | |||||||||||||||
Tangible book value per common share | 23.94 | 23.67 | 21.90 | 23.94 | 21.90 | |||||||||||||||
Common shares outstanding | 5,533,050 | 5,533,050 | 4,484,513 | 5,533,050 | 4,484,513 | |||||||||||||||
Average common shares outstanding: | ||||||||||||||||||||
Basic | 5,597,867 | 4,972,759 | 4,532,360 | 5,039,497 | 4,526,377 | |||||||||||||||
Diluted | 5,622,181 | 4,992,025 | 4,574,455 | 5,063,299 | 4,549,447 | |||||||||||||||
Performance ratios | ||||||||||||||||||||
Return on average assets | 0.71 | % | 0.71 | % | 0.82 | % | 0.72 | % | 0.83 | % | ||||||||||
Return on average shareholders' equity | 9.08 | % | 9.67 | % | 9.14 | % | 9.31 | % | 8.95 | % | ||||||||||
Return on average tangible common equity | 9.41 | % | 10.07 | % | 9.58 | % | 9.69 | % | 9.39 | % | ||||||||||
Net interest margin | 2.42 | % | 2.39 | % | 2.84 | % | 2.51 | % | 2.85 | % | ||||||||||
Capital ratios 1 | ||||||||||||||||||||
Tangible common equity to tangible assets | 7.28 | % | 7.72 | % | 8.46 | % | 7.28 | % | 8.46 | % | ||||||||||
Tier 1 leverage ratio | 7.62 | % | 8.08 | % | 8.81 | % | 7.62 | % | 8.81 | % | ||||||||||
Common equity tier 1 capital ratio | 10.07 | % | 10.66 | % | 10.74 | % | 10.07 | % | 10.74 | % | ||||||||||
Tier 1 capital ratio | 10.07 | % | 10.66 | % | 10.74 | % | 10.07 | % | 10.74 | % | ||||||||||
Total risk-based capital ratio | 13.67 | % | 12.54 | % | 11.90 | % | 13.67 | % | 11.90 | % | ||||||||||
Asset quality | ||||||||||||||||||||
Nonperforming loans | $ | 1,133 | $ | 5,639 | $ | 206 | $ | 1,133 | $ | 206 | ||||||||||
Nonperforming assets | 5,735 | 10,173 | 4,724 | 5,735 | 4,724 | |||||||||||||||
Nonperforming loans to loans | 0.09 | % | 0.51 | % | 0.02 | % | 0.09 | % | 0.02 | % | ||||||||||
Nonperforming assets to total assets | 0.31 | % | 0.60 | % | 0.41 | % | 0.31 | % | 0.41 | % | ||||||||||
Allowance for loan losses to: | ||||||||||||||||||||
Loans | 0.88 | % | 0.9 | % | 0.88 | % | 0.88 | % | 0.88 | % | ||||||||||
Nonperforming loans | 932.1 | % | 177.6 | % | 3,723.8 | % | 932.1 | % | 3,723.8 | % | ||||||||||
Net charge-offs (recoveries) to average loans | 0.57 | % | 0.05 | % | (0.07 | %) | 0.23 | % | (0.11 | )% | ||||||||||
Average balance sheet information | ||||||||||||||||||||
Loans | $ | 1,155,749 | $ | 1,072,901 | $ | 835,938 | $ | 1,073,722 | $ | 789,908 | ||||||||||
Total securities | 457,407 | 358,498 | 191,634 | 347,397 | 173,083 | |||||||||||||||
Other earning assets | 51,779 | 97,774 | 37,638 | 75,860 | 42,746 | |||||||||||||||
Total interest-earning assets | 1,702,002 | 1,566,554 | 1,094,622 | 1,531,323 | 1,039,898 | |||||||||||||||
Total assets | 1,734,943 | 1,596,504 | 1,123,741 | 1,562,059 | 1,068,705 | |||||||||||||||
Noninterest-bearing deposits | 32,897 | 27,687 | 23,267 | 27,846 | 22,080 | |||||||||||||||
Interest-bearing deposits | 1,385,487 | 1,284,952 | 854,889 | 1,235,078 | 813,521 | |||||||||||||||
Total deposits | 1,418,384 | 1,312,639 | 878,156 | 1,262,924 | 835,601 | |||||||||||||||
Shareholders' equity | 135,666 | 117,913 | 100,885 | 120,010 | 99,365 | |||||||||||||||
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, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 2,314 | $ | 1,868 | $ | 1,460 | ||||||
Interest-bearing demand deposits | 65,511 | 68,140 | 19,185 | |||||||||
Interest-bearing time deposits | 250 | 250 | 1,250 | |||||||||
Securities available-for-sale, at fair value | 470,978 | 433,806 | 202,565 | |||||||||
Securities held-to-maturity, at amortized cost | 5,500 | — | — | |||||||||
Loans held-for-sale | 32,471 | 44,503 | 27,773 | |||||||||
Loans | 1,198,932 | 1,111,622 | 876,578 | |||||||||
Allowance for loan losses | (10,561 | ) | (10,016 | ) | (7,671 | ) | ||||||
Net loans | 1,188,371 | 1,101,606 | 868,907 | |||||||||
Accrued interest receivable | 5,848 | 5,508 | 3,581 | |||||||||
Federal Home Loan Bank of Indianapolis stock | 8,595 | 8,595 | 6,946 | |||||||||
Cash surrender value of bank-owned life insurance | 18,044 | 12,932 | 12,625 | |||||||||
Premises and equipment, net | 10,116 | 9,267 | 8,508 | |||||||||
Goodwill | 4,687 | 4,687 | 4,687 | |||||||||
Other real estate owned | 4,533 | 4,488 | 4,488 | |||||||||
Accrued income and other assets | 6,978 | 6,818 | 4,195 | |||||||||
Total assets | $ | 1,824,196 | $ | 1,702,468 | $ | 1,166,170 | ||||||
Liabilities | ||||||||||||
Noninterest-bearing deposits | $ | 32,938 | $ | 28,066 | $ | 22,338 | ||||||
Interest-bearing deposits | 1,460,663 | 1,360,867 | 877,412 | |||||||||
Total deposits | 1,493,601 | 1,388,933 | 899,750 | |||||||||
Advances from Federal Home Loan Bank | 147,978 | 147,974 | 150,946 | |||||||||
Subordinated debt | 36,541 | 12,778 | 2,937 | |||||||||
Accrued interest payable | 125 | 138 | 112 | |||||||||
Accrued expenses and other liabilities | 8,797 | 16,966 | 9,513 | |||||||||
Total liabilities | 1,687,042 | 1,566,789 | 1,063,258 | |||||||||
Shareholders' equity | ||||||||||||
Voting common stock | 95,839 | 95,642 | 72,409 | |||||||||
Retained earnings | 40,389 | 37,630 | 30,977 | |||||||||
Accumulated other comprehensive income (loss) | 926 | 2,407 | (474 | ) | ||||||||
Total shareholders' equity | 137,154 | 135,679 | 102,912 | |||||||||
Total liabilities and shareholders' equity | $ | 1,824,196 | $ | 1,702,468 | $ | 1,166,170 | ||||||
First Internet Bancorp | |||||||||||||||||||
Condensed Consolidated Statements of Income (unaudited) | |||||||||||||||||||
Amounts in thousands, except per share data | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||||
Interest income | |||||||||||||||||||
Loans | $ | 12,544 | $ | 11,661 | $ | 9,326 | $ | 35,394 | $ | 26,759 | |||||||||
Securities - taxable | 2,148 | 1,747 | 994 | 5,064 | 2,661 | ||||||||||||||
Securities - non-taxable | 637 | 368 | 116 | 1,170 | 175 | ||||||||||||||
Other earning assets | 142 | 195 | 100 | 507 | 258 | ||||||||||||||
Total interest income | 15,471 | 13,971 | 10,536 | 42,135 | 29,853 | ||||||||||||||
Interest expense | |||||||||||||||||||
Deposits | 4,368 | 3,930 | 2,260 | 11,186 | 6,350 | ||||||||||||||
Other borrowed funds | 765 | 735 | 437 | 2,164 | 1,318 | ||||||||||||||
Total interest expense | 5,133 | 4,665 | 2,697 | 13,350 | 7,668 | ||||||||||||||
Net interest income | 10,338 | 9,306 | 7,839 | 28,785 | 22,185 | ||||||||||||||
Provision for loan losses | 2,204 | 924 | 454 | 4,074 | 1,200 | ||||||||||||||
Net interest income after provision for loan losses | 8,134 | 8,382 | 7,385 | 24,711 | 20,985 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges and fees | 207 | 215 | 202 | 622 | 571 | ||||||||||||||
Mortgage banking activities | 4,442 | 3,295 | 2,095 | 9,991 | 7,195 | ||||||||||||||
Gain on sale of securities | — | 177 | — | 177 | — | ||||||||||||||
Gain (loss) on asset disposals | 5 | (48 | ) | (27 | ) | (59 | ) | (74 | ) | ||||||||||
Other | 244 | 109 | 104 | 455 | 306 | ||||||||||||||
Total noninterest income | 4,898 | 3,748 | 2,374 | 11,186 | 7,998 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 4,550 | 4,329 | 3,446 | 12,777 | 10,811 | ||||||||||||||
Marketing, advertising and promotion | 454 | 434 | 544 | 1,352 | 1,330 | ||||||||||||||
Consulting and professional fees | 901 | 895 | 544 | 2,434 | 1,700 | ||||||||||||||
Data processing | 286 | 275 | 248 | 835 | 729 | ||||||||||||||
Loan expenses | 240 | 200 | 97 | 624 | 459 | ||||||||||||||
Premises and equipment | 983 | 963 | 676 | 2,744 | 2,009 | ||||||||||||||
Deposit insurance premium | 420 | 215 | 163 | 815 | 473 | ||||||||||||||
Other | 579 | 564 | 489 | 1,712 | 1,280 | ||||||||||||||
Total noninterest expense | 8,413 | 7,875 | 6,207 | 23,293 | 18,791 | ||||||||||||||
Income before income taxes | 4,619 | 4,255 | 3,552 | 12,604 | 10,192 | ||||||||||||||
Income tax provision | 1,521 | 1,421 | 1,229 | 4,240 | 3,541 | ||||||||||||||
Net income | $ | 3,098 | $ | 2,834 | $ | 2,323 | $ | 8,364 | $ | 6,651 | |||||||||
Per common share data | |||||||||||||||||||
Earnings per share - basic | $ | 0.55 | $ | 0.57 | $ | 0.51 | $ | 1.66 | $ | 1.47 | |||||||||
Earnings per share - diluted | $ | 0.55 | $ | 0.57 | $ | 0.51 | $ | 1.65 | $ | 1.46 | |||||||||
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, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||||||||||||||||
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 | $ | 1,192,816 | $ | 12,544 | 4.18 | % | $ | 1,110,282 | $ | 11,661 | 4.22 | % | $ | 865,350 | $ | 9,326 | 4.28 | % | ||||||||||||||
Securities - taxable | 366,810 | 2,148 | 2.33 | % | 307,336 | 1,747 | 2.29 | % | 176,722 | 994 | 2.23 | % | ||||||||||||||||||||
Securities - non-taxable | 90,597 | 637 | 2.80 | % | 51,162 | 368 | 2.89 | % | 14,912 | 116 | 3.09 | % | ||||||||||||||||||||
Other earning assets | 51,779 | 142 | 1.09 | % | 97,774 | 195 | 0.80 | % | 37,638 | 100 | 1.05 | % | ||||||||||||||||||||
Total interest-earning assets | 1,702,002 | 15,471 | 3.62 | % | 1,566,554 | 13,971 | 3.59 | % | 1,094,622 | 10,536 | 3.82 | % | ||||||||||||||||||||
Allowance for loan losses | (10,378 | ) | (9,472 | ) | (7,223 | ) | ||||||||||||||||||||||||||
Noninterest-earning assets | 43,319 | 39,422 | 36,342 | |||||||||||||||||||||||||||||
Total assets | $ | 1,734,943 | $ | 1,596,504 | $ | 1,123,741 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 81,151 | $ | 112 | 0.55 | % | $ | 83,712 | $ | 114 | 0.55 | % | $ | 75,965 | $ | 105 | 0.55 | % | ||||||||||||||
Regular savings accounts | 27,479 | 40 | 0.58 | % | 28,023 | 40 | 0.57 | % | 25,500 | 38 | 0.59 | % | ||||||||||||||||||||
Money market accounts | 369,082 | 658 | 0.71 | % | 363,767 | 641 | 0.71 | % | 297,545 | 533 | 0.71 | % | ||||||||||||||||||||
Certificates and brokered deposits | 907,775 | 3,558 | 1.56 | % | 809,450 | 3,135 | 1.56 | % | 455,879 | 1,584 | 1.38 | % | ||||||||||||||||||||
Total interest-bearing deposits | 1,385,487 | 4,368 | 1.25 | % | 1,284,952 | 3,930 | 1.23 | % | 854,889 | 2,260 | 1.05 | % | ||||||||||||||||||||
Other borrowed funds | 173,568 | 765 | 1.75 | % | 161,127 | 735 | 1.83 | % | 139,731 | 437 | 1.24 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 1,559,055 | 5,133 | 1.31 | % | 1,446,079 | 4,665 | 1.30 | % | 994,620 | 2,697 | 1.08 | % | ||||||||||||||||||||
Noninterest-bearing deposits | 32,897 | 27,687 | 23,267 | |||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 7,325 | 4,825 | 4,969 | |||||||||||||||||||||||||||||
Total liabilities | 1,599,277 | 1,478,591 | 1,022,856 | |||||||||||||||||||||||||||||
Shareholders' equity | 135,666 | 117,913 | 100,885 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,734,943 | $ | 1,596,504 | $ | 1,123,741 | ||||||||||||||||||||||||||
Net interest income | $ | 10,338 | $ | 9,306 | $ | 7,839 | ||||||||||||||||||||||||||
Interest rate spread | 2.31 | % | 2.29 | % | 2.74 | % | ||||||||||||||||||||||||||
Net interest margin | 2.42 | % | 2.39 | % | 2.84 | % | ||||||||||||||||||||||||||
First Internet Bancorp | |||||||||||||||||||||
Average Balances and Rates (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||
September 30, 2016 | September 30, 2015 | ||||||||||||||||||||
Average Balance | Interest/Dividends | Yield/Cost | Average Balance | Interest/Dividends | Yield/Cost | ||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||
Loans, including loans held-for-sale | $ | 1,108,066 | $ | 35,394 | 4.27 | % | $ | 824,069 | $ | 26,759 | 4.34 | % | |||||||||
Securities - taxable | 292,620 | 5,064 | 2.31 | % | 165,456 | 2,661 | 2.15 | % | |||||||||||||
Securities - non-taxable | 54,777 | 1,170 | 2.85 | % | 7,627 | 175 | 3.07 | % | |||||||||||||
Other earning assets | 75,860 | 507 | 0.89 | % | 42,746 | 258 | 0.81 | % | |||||||||||||
Total interest-earning assets | 1,531,323 | 42,135 | 3.68 | % | 1,039,898 | 29,853 | 3.84 | % | |||||||||||||
Allowance for loan losses | (9,505 | ) | (6,555 | ) | |||||||||||||||||
Noninterest-earning assets | 40,241 | 35,362 | |||||||||||||||||||
Total assets | $ | 1,562,059 | $ | 1,068,705 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 82,063 | $ | 336 | 0.55 | % | $ | 75,824 | $ | 311 | 0.55 | % | |||||||||
Regular savings accounts | 26,844 | 117 | 0.58 | % | 23,836 | 104 | 0.58 | % | |||||||||||||
Money market accounts | 361,248 | 1,915 | 0.71 | % | 284,709 | 1,528 | 0.72 | % | |||||||||||||
Certificates and brokered deposits | 764,923 | 8,818 | 1.54 | % | 429,152 | 4,407 | 1.37 | % | |||||||||||||
Total interest-bearing deposits | 1,235,078 | 11,186 | 1.21 | % | 813,521 | 6,350 | 1.04 | % | |||||||||||||
Other borrowed funds | 173,438 | 2,164 | 1.67 | % | 129,089 | 1,318 | 1.37 | % | |||||||||||||
Total interest-bearing liabilities | 1,408,516 | 13,350 | 1.27 | % | 942,610 | 7,668 | 1.09 | % | |||||||||||||
Noninterest-bearing deposits | 27,846 | 22,080 | |||||||||||||||||||
Other noninterest-bearing liabilities | 5,687 | 4,650 | |||||||||||||||||||
Total liabilities | 1,442,049 | 969,340 | |||||||||||||||||||
Shareholders' equity | 120,010 | 99,365 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,562,059 | $ | 1,068,705 | |||||||||||||||||
Net interest income | $ | 28,785 | $ | 22,185 | |||||||||||||||||
Interest rate spread | 2.41 | % | 2.75 | % | |||||||||||||||||
Net interest margin | 2.51 | % | 2.85 | % | |||||||||||||||||
First Internet Bancorp | |||||||||||||||||||||
Loans and Deposits (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
September 30, 2016 | June 30, 2016 | September 30, 2015 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Commercial loans | |||||||||||||||||||||
Commercial and industrial | $ | 107,250 | 8.9 | % | $ | 111,130 | 10.0 | % | $ | 89,762 | 10.2 | % | |||||||||
Owner-occupied commercial real estate | 45,540 | 3.8 | % | 46,543 | 4.2 | % | 42,117 | 4.8 | % | ||||||||||||
Investor commercial real estate | 12,752 | 1.1 | % | 12,976 | 1.2 | % | 17,483 | 2.0 | % | ||||||||||||
Construction | 56,391 | 4.7 | % | 53,368 | 4.8 | % | 30,196 | 3.4 | % | ||||||||||||
Single tenant lease financing | 571,972 | 47.7 | % | 500,937 | 45.1 | % | 329,149 | 37.6 | % | ||||||||||||
Total commercial loans | 793,905 | 66.2 | % | 724,954 | 65.3 | % | 508,707 | 58.0 | % | ||||||||||||
Consumer loans | |||||||||||||||||||||
Residential mortgage | 200,889 | 16.7 | % | 202,107 | 18.2 | % | 209,507 | 23.9 | % | ||||||||||||
Home equity | 37,849 | 3.2 | % | 38,981 | 3.5 | % | 47,319 | 5.4 | % | ||||||||||||
Trailers | 78,419 | 6.5 | % | 74,777 | 6.7 | % | 66,749 | 7.6 | % | ||||||||||||
Recreational vehicles | 49,275 | 4.1 | % | 44,387 | 4.0 | % | 36,800 | 4.2 | % | ||||||||||||
Other consumer loans | 35,464 | 3.0 | % | 22,592 | 2.0 | % | 2,638 | 0.3 | % | ||||||||||||
Total consumer loans | 401,896 | 33.5 | % | 382,844 | 34.4 | % | 363,013 | 41.4 | % | ||||||||||||
Net deferred loan fees, premiums and discounts | 3,131 | 0.3 | % | 3,824 | 0.3 | % | 4,858 | 0.6 | % | ||||||||||||
Total loans | $ | 1,198,932 | 100.0 | % | $ | 1,111,622 | 100.0 | % | $ | 876,578 | 100.0 | % | |||||||||
September 30, 2016 | June 30, 2016 | September 30, 2015 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Deposits | |||||||||||||||||||||
Noninterest-bearing deposits | $ | 32,938 | 2.2 | % | $ | 28,066 | 2.0 | % | $ | 22,338 | 2.5 | % | |||||||||
Interest-bearing demand deposits | 84,939 | 5.7 | % | 83,031 | 6.0 | % | 79,031 | 8.8 | % | ||||||||||||
Regular savings accounts | 27,661 | 1.8 | % | 28,900 | 2.1 | % | 26,316 | 2.9 | % | ||||||||||||
Money market accounts | 364,517 | 24.4 | % | 373,932 | 26.9 | % | 314,105 | 34.9 | % | ||||||||||||
Certificates of deposits | 970,684 | 65.0 | % | 862,150 | 62.1 | % | 444,396 | 49.4 | % | ||||||||||||
Brokered deposits | 12,862 | 0.9 | % | 12,854 | 0.9 | % | 13,564 | 1.5 | % | ||||||||||||
Total deposits | $ | 1,493,601 | 100.0 | % | $ | 1,388,933 | 100.0 | % | $ | 899,750 | 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, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | ||||||||||||||||
Total equity - GAAP | $ | 137,154 | $ | 135,679 | $ | 102,912 | $ | 137,154 | $ | 102,912 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible common equity | $ | 132,467 | $ | 130,992 | $ | 98,225 | $ | 132,467 | $ | 98,225 | ||||||||||
Total assets - GAAP | $ | 1,824,196 | $ | 1,702,468 | $ | 1,166,170 | $ | 1,824,196 | $ | 1,166,170 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible assets | $ | 1,819,509 | $ | 1,697,781 | $ | 1,161,483 | $ | 1,819,509 | $ | 1,161,483 | ||||||||||
Common shares outstanding | 5,533,050 | 5,533,050 | 4,484,513 | 5,533,050 | 4,484,513 | |||||||||||||||
Book value per common share | $ | 24.79 | $ | 24.52 | $ | 22.95 | $ | 24.79 | $ | 22.95 | ||||||||||
Effect of goodwill | (0.85 | ) | (0.85 | ) | (1.05 | ) | (0.85 | ) | (1.05 | ) | ||||||||||
Tangible book value per common share | $ | 23.94 | $ | 23.67 | $ | 21.90 | $ | 23.94 | $ | 21.90 | ||||||||||
Total shareholders' equity to assets ratio | 7.52 | % | 7.97 | % | 8.82 | % | 7.52 | % | 8.82 | % | ||||||||||
Effect of goodwill | (0.24 | %) | (0.25 | %) | (0.36 | %) | (0.24 | )% | (0.36 | )% | ||||||||||
Tangible common equity to tangible assets ratio | 7.28 | % | 7.72 | % | 8.46 | % | 7.28 | % | 8.46 | % | ||||||||||
Total average equity - GAAP | $ | 135,666 | $ | 117,913 | $ | 100,885 | $ | 120,010 | $ | 99,365 | ||||||||||
Adjustments: | ||||||||||||||||||||
Average goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Average tangible common equity | $ | 130,979 | $ | 113,226 | $ | 96,198 | $ | 115,323 | $ | 94,678 | ||||||||||
Return on average shareholders' equity | 9.08 | % | 9.67 | % | 9.14 | % | 9.31 | % | 8.95 | % | ||||||||||
Effect of goodwill | 0.33 | % | 0.40 | % | 0.44 | % | 0.38 | % | 0.44 | % | ||||||||||
Return on average tangible common equity | 9.41 | % | 10.07 | % | 9.58 | % | 9.69 | % | 9.39 | % | ||||||||||
First Internet Bancorp | |||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||
Amounts in thousands, except per share data | |||||||||||
Three Months Ended | |||||||||||
September 30, 2016 | June 30, 2016 | September 30, 2015 | |||||||||
Net income - GAAP | $ | 3,098 | $ | 2,834 | $ | 2,323 | |||||
Adjustments: | |||||||||||
Commercial and industrial loan charge-off 1 | 722 | — | — | ||||||||
Net income - adjusted | $ | 3,820 | $ | 2,834 | $ | 2,323 | |||||
Net charge-offs (recoveries) - GAAP | $ | 1,659 | $ | 128 | $ | (144 | ) | ||||
Adjustments: | |||||||||||
Commercial and industrial loan charge-off | 1,582 | — | — | ||||||||
Net charge-offs (recoveries) - adjusted | $ | 77 | $ | 128 | $ | (144 | ) | ||||
Diluted earnings per share - GAAP | $ | 0.55 | $ | 0.57 | $ | 0.51 | |||||
Effect of commercial and industrial loan charge-off 2 | 0.13 | — | — | ||||||||
Diluted earnings per share - adjusted | $ | 0.68 | $ | 0.57 | $ | 0.51 | |||||
Net charge-offs (recoveries) to average loans - GAAP | 0.57 | % | 0.05 | % | (0.07 | )% | |||||
Effect of commercial and industrial loan charge-off | (0.54 | )% | — | % | — | % | |||||
Net charge-offs (recoveries) to average loans - adjusted | 0.03 | % | 0.05 | % | (0.07 | )% | |||||
Return on average assets - GAAP | 0.71 | % | 0.71 | % | 0.82 | % | |||||
Effect of commercial and industrial loan charge-off 2 | 0.17 | % | — | % | — | % | |||||
Return on average assets - adjusted | 0.88 | % | 0.71 | % | 0.82 | % | |||||
Return on average shareholders' equity - GAAP | 9.08 | % | 9.67 | % | 9.14 | % | |||||
Effect of commercial and industrial loan charge-off 2 | 2.12 | % | — | % | — | % | |||||
Return on average shareholders' equity - adjusted | 11.20 | % | 9.67 | % | 9.14 | % | |||||
Return on average tangible common equity | 9.41 | % | 10.07 | % | 9.58 | % | |||||
Effect of commercial and industrial loan charge-off 2 | 2.19 | % | — | % | — | % | |||||
Return on average tangible common equity - adjusted | 11.60 | % | 10.07 | % | 9.58 | % | |||||
1 Represents the full commercial and industrial loan charge-off of $1,582 less the associated specific allowance of $472 and assuming a tax rate of 35% applied
2 Assuming a tax rate of 35% applied