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| 8-K - 8-K - First Internet Bancorp | inbk-2q2017xer8k.htm |
First Internet Bancorp Reports Record Quarterly Net Income
Net income up 41% over prior quarter; net interest income fuels results
Fishers, Indiana, July 20, 2017 - 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 second quarter 2017.
David Becker, Chairman, President and Chief Executive Officer, commented, “Loan growth continues to drive net interest income to record levels. With loans up 52.8% since this time one year ago and 18.5% over the previous quarter, we produced our highest ever quarterly net income as we saw growth and success across all business lines. We have done so without compromising our strong credit culture. Nonperforming loans to total loans were a modest 20 basis points as we closed out the quarter.
“Over the past three months, we were also honored with two awards, naming First Internet Bank as an employer of choice at the city and state levels. These awards were especially gratifying because both are based on voluntary employee feedback. This measurement of organizational health affirms our capability to recruit and retain the talent we need to grow and nurture strong customer relationships. I am very proud of the team we have assembled, and I thank them for their dedication.”
Second quarter net income was a record $4.0 million and diluted earnings per share were $0.61. This compares with first quarter net income of $2.8 million and diluted earnings per share of $0.43 and second quarter 2016 net income of $2.8 million and diluted earnings per share of $0.57.
The comparability of diluted earnings per share between the second quarter and the year-over-year quarter is impacted by the effect on average diluted shares outstanding resulting from the Company’s issuance of an aggregate of 1,980,766 shares of common stock through equity offerings completed during May and December 2016.
Highlights for the second quarter include:
▪ | Diluted earnings per share of $0.61, increasing $0.18, or 41.9%, compared to the linked quarter and $0.04, or 7.0%, compared to second quarter 2016 |
▪ | Total loan growth of $265.2 million, or 18.5%, compared to March 31, 2017 and $586.8 million, or 52.8%, compared to June 30, 2016 |
▪ | Net interest income of $13.0 million, increasing $1.5 million, or 13.2%, compared to the linked quarter and $3.7 million, or 39.4%, compared to the second quarter 2016 |
▪ | Capital levels continued to support the balance sheet as lower risk-weighted loan generation contributed significantly to overall growth |
Company | Bank | |||
Total shareholders’ equity to assets | 6.88% | 7.66% | ||
Tangible common equity to tangible assets | 6.70% | 7.47% | ||
Tier 1 leverage ratio | 7.50% | 8.34% | ||
Common equity tier 1 capital ratio | 9.74% | 10.84% | ||
Tier 1 capital ratio | 9.74% | 10.84% | ||
Total risk-based capital ratio | 12.68% | 11.62% | ||
▪ | Asset quality remained strong |
• | Nonperforming loans to total loans of 0.20% as of June 30, 2017 |
• | Net charge-offs to average loans of 0.01% |
Net Interest Income and Net Interest Margin
Net interest income for the second quarter was $13.0 million compared to $11.5 million for the first quarter and $9.3 million for the second quarter 2016. Total interest income for the second quarter was $20.0 million, increasing $2.6 million, or 14.9%, compared to the first quarter and $6.0 million, or 43.0%, compared to the second quarter 2016. The increase in total interest income compared to the linked quarter was driven primarily by a $232.4 million, or 17.6%, increase in average loan balances, partially offset by a decline of 11 bps in the yield earned on the loan portfolio to 4.19% in the second quarter from 4.30% for the first quarter. The yield earned on the loan portfolio was impacted by strong growth in public finance lending, which carry lower tax-exempt rates, and continued growth in portfolio mortgage loans. Growth in total interest income also benefitted from increases in the average balances of securities and other interest-earning assets during the quarter. In total, the Company’s yield on interest-earning assets decreased 4 bps during the second quarter to 3.75% from 3.79% for the first quarter.
Total interest expense for the second quarter was $7.0 million, increasing $1.1 million, or 18.0%, compared to the first quarter and $2.3 million, or 50.1%, compared to the second quarter 2016. The increase in total interest expense compared to the linked quarter was due primarily to increases of $142.7 million, or 9.8%, in average interest-bearing deposit balances and $135.4 million, or 59.9%, in the average balance of Federal Home Loan Bank (“FHLB”) advances. Interest expense was also impacted by the cost of funds related to interest-bearing deposits which increased 3 bps during the second quarter to 1.34% from 1.31% for the first quarter. Additionally, the cost of funds related to FHLB advances increased 8 bps to 1.16% from 1.08% for the first quarter as the Company extended the maturities on certain borrowings to manage interest rate risk. Overall, the total cost of interest-bearing liabilities increased 1 bp during the second quarter to 1.41% from 1.40% for the first quarter.
Net interest margin (“NIM”) was 2.43% for the second quarter compared to 2.50% for the first quarter and 2.39% for the second quarter 2016. On a fully-taxable equivalent basis, NIM was 2.53% for the second quarter compared to 2.57% for the first quarter and 2.43% for the second quarter 2016.
Noninterest Income
Noninterest income for the second quarter was $2.7 million compared to $2.1 million for the first quarter and $3.7 million for the second quarter 2016. The increase of $0.6 million, or 28.4%, compared to the linked quarter was due primarily to an increase of $0.5 million, or 33.4%, in mortgage banking revenue. Mortgage origination activity remained solid as the dollar volume of commitments / locks increased 11.2% compared to the linked quarter, which included an increase of almost 32% in mortgages held-for-sale originations, driving the growth in mortgage banking revenue.
Noninterest Expense
Noninterest expense for the second quarter was $8.9 million compared to $8.7 million for the first quarter and $7.9 million for the second quarter 2016. The increase of $0.2 million, or 2.6%, compared to the linked quarter was due primarily to higher salaries and employee benefits and, to a lesser extent, higher premises and equipment expense. The increase in salaries and employee benefits was driven primarily by higher mortgage incentive compensation and a full quarter’s impact of annual merit increases, partially offset by a decline in claims experience related to medical and prescription drug insurance. The increase in premises and equipment expense was due to several software-related costs, none of which were individually significant.
Income Taxes
Income tax expense was $1.5 million for the second quarter, resulting in an effective tax rate of 26.8%, compared to $1.0 million and an effective tax rate of 26.5% for the linked quarter and $1.4 million and an effective tax rate of 33.4% for the second quarter 2016. Compared to the linked quarter, the impact on the effective tax rate resulting from tax benefits associated with equity compensation vesting events occurring during the first quarter was mostly offset in the second quarter by the increase in tax-exempt earning assets due to the strong growth in the public finance loan portfolio.
Loans and Credit Quality
Total loans as of June 30, 2017 were $1.7 billion, increasing $265.2 million, or 18.5%, compared to March 31, 2017 and $586.8 million, or 52.8%, compared to June 30, 2016. Total commercial loan balances were $1.2 billion as of June 30, 2017, increasing $199.1 million, or 20.7%, compared to March 31, 2017 and $436.0 million, or 60.1%, compared to June 30, 2016. The growth in commercial loan balances was driven largely by production in public finance and single tenant lease financing. The public finance portfolio increased $101.9 million, or 130.6%, compared to March 31, 2017 with balances totaling $179.9 million at quarter end. Single tenant lease financing balances increased $82.4 million, or 12.4%, compared to March 31, 2017 and $246.9 million, or 49.3%, compared to June 30, 2016. Commercial and industrial and owner-occupied commercial real estate balances increased $17.0 million on a combined basis, or 10.6%, compared to March 31, 2017 and $19.7 million, or 12.5%, compared to June 30, 2016. Investor commercial real estate balances increased modestly during the second quarter but declined compared to June 30, 2016 while construction balances declined compared to March 31, 2017 and June 30, 2016.
Total consumer loan balances were $534.9 million as of June 30, 2017, increasing $65.8 million, or 14.0%, compared to March 31, 2017 and $152.1 million, or 39.7%, compared to June 30, 2016. Residential mortgage balances increased $47.0 million, or 19.1%, compared to March 31, 2017 and $90.9 million, or 45.0%, compared to June 30, 2016 as the Company continued to see strong consumer interest in adjustable rate mortgage products during the second quarter.
Trailer portfolio balances increased $7.3 million, or 8.5%, compared to March 31, 2017 and $19.3 million, or 25.8%, compared to June 30, 2016. Recreational vehicle balances increased $6.3 million, or 11.0%, compared to March 31, 2017 and $19.1 million, or 43.1%, compared to June 30, 2016. Furthermore, other consumer loan balances increased $6.8 million, or 15.3%, compared to March 31, 2017 and $28.5 million, or 126.0%, compared to June 30, 2016, driven primarily by home improvement lending.
Credit quality continued to remain sound as total delinquencies 30 days or more past due were 0.12% of total loans as of June 30, 2017, consistent with March 31, 2017 and compared to 0.09% as of June 30, 2016. Nonperforming loans to total loans was 0.20% as of June 30, 2017 compared to 0.24% as of March 31, 2017 and 0.51% as of June 30, 2016. Nonperforming assets to total assets was 0.33% as of June 30, 2017 compared to 0.39% as of March 31, 2017 and 0.60% as of June 30, 2016.
The allowance for loan losses was $13.2 million as of June 30, 2017 compared to $11.9 million as of March 31, 2017 and $10.0 million as of June 30, 2016. The allowance as a percentage of total nonperforming loans was 383.8% as of June 30, 2017 compared to 348.7% as of March 31, 2017 and 177.6% as of June 30, 2016. The allowance as a percentage of total loans was 0.78% as of June 30, 2017 compared to 0.83% as of March 31, 2017 and 0.90% as of June 30, 2016. The decline in the allowance as a percentage of total loans was due to the growth in the public finance and residential mortgage portfolios as these loan categories have lower loss reserve factors than all other commercial and most consumer loan types.
Net charge-offs of less than $0.1 million were recognized during the second quarter, resulting in net charge-offs to average loans of 0.01% compared to 0.04% for the first quarter and 0.05% for the second quarter 2016. The provision for loan losses in the second quarter was $1.3 million compared to $1.0 million for the first quarter and $0.9 million for the second quarter 2016. The increase of $0.3 million, or 27.7%, compared to the linked quarter was due mainly to the strong loan growth experienced in the second quarter.
Capital
During the second quarter, total shareholders’ equity increased $6.3 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 June 30, 2017, the Company’s tier 1 leverage, common equity tier 1, tier 1 and total risk-based capital ratios were 7.50%, 9.74%, 9.74% and 12.68% compared to 8.41%, 10.88%, 10.88% and 14.16% as of March 31, 2017, respectively. The declines in the regulatory capital ratios were due primarily to increases in average and risk-weighted assets resulting from the strong quarterly loan growth. Tangible common equity to tangible assets declined 76 bps during the second quarter to 6.70% as of June 30, 2017 due primarily to continued strong balance sheet growth. Tangible book value per share increased to $24.43 as of June 30, 2017 from $23.52 as of March 31, 2017 and $23.67 as of June 30, 2016.
About First Internet Bancorp
First Internet Bancorp is a bank holding company with assets of $2.4 billion as of June 30, 2017. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. The Bank now provides consumer and small business deposit, consumer loan, residential mortgage, and specialty finance services nationally as well as commercial real estate loans, commercial and industrial loans and treasury management services in select geographies. First Internet Bancorp’s common stock trades on the NASDAQ Global Select Market under the symbol “INBK” and is a component of the Russell 2000® Index. 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, commercial and industrial, and public finance 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 and tangible common equity to tangible assets, net interest income - FTE and net interest margin - FTE are used by the Company’s management to measure the strength of its capital and analyze profitability, including 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 | Executive Vice President & Chief Operating Officer | ||
(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 | Six Months Ended | |||||||||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | ||||||||||||||||
Net income | $ | 4,001 | $ | 2,832 | $ | 2,834 | $ | 6,833 | $ | 5,266 | ||||||||||
Per share and share information | ||||||||||||||||||||
Earnings per share - basic | $ | 0.61 | $ | 0.43 | $ | 0.57 | $ | 1.04 | $ | 1.11 | ||||||||||
Earnings per share - diluted | 0.61 | 0.43 | 0.57 | 1.04 | 1.10 | |||||||||||||||
Dividends declared per share | 0.06 | 0.06 | 0.06 | 0.12 | 0.12 | |||||||||||||||
Book value per common share | 25.15 | 24.24 | 24.52 | 25.15 | 24.52 | |||||||||||||||
Tangible book value per common share | 24.43 | 23.52 | 23.67 | 24.43 | 23.67 | |||||||||||||||
Common shares outstanding | 6,513,577 | 6,497,662 | 5,533,050 | 6,513,577 | 5,533,050 | |||||||||||||||
Average common shares outstanding: | ||||||||||||||||||||
Basic | 6,583,515 | 6,547,807 | 4,972,759 | 6,565,760 | 4,757,243 | |||||||||||||||
Diluted | 6,597,991 | 6,602,200 | 4,992,025 | 6,599,681 | 4,782,700 | |||||||||||||||
Performance ratios | ||||||||||||||||||||
Return on average assets | 0.73 | % | 0.60 | % | 0.71 | % | 0.67 | % | 0.72 | % | ||||||||||
Return on average shareholders' equity | 9.95 | % | 7.42 | % | 9.67 | % | 8.72 | % | 9.45 | % | ||||||||||
Return on average tangible common equity | 10.25 | % | 7.65 | % | 10.07 | % | 8.99 | % | 9.86 | % | ||||||||||
Net interest margin | 2.43 | % | 2.50 | % | 2.39 | % | 2.46 | % | 2.57 | % | ||||||||||
Net interest margin - FTE 1 | 2.53 | % | 2.57 | % | 2.43 | % | 2.55 | % | 2.60 | % | ||||||||||
Capital ratios 2 | ||||||||||||||||||||
Total shareholders' equity to assets | 6.88 | % | 7.67 | % | 7.97 | % | 6.88 | % | 7.97 | % | ||||||||||
Tangible common equity to tangible assets | 6.70 | % | 7.46 | % | 7.72 | % | 6.70 | % | 7.72 | % | ||||||||||
Tier 1 leverage ratio | 7.50 | % | 8.41 | % | 8.08 | % | 7.50 | % | 8.08 | % | ||||||||||
Common equity tier 1 capital ratio | 9.74 | % | 10.88 | % | 10.66 | % | 9.74 | % | 10.66 | % | ||||||||||
Tier 1 capital ratio | 9.74 | % | 10.88 | % | 10.66 | % | 9.74 | % | 10.66 | % | ||||||||||
Total risk-based capital ratio | 12.68 | % | 14.16 | % | 12.54 | % | 12.68 | % | 12.54 | % | ||||||||||
Asset quality | ||||||||||||||||||||
Nonperforming loans | $ | 3,438 | $ | 3,411 | $ | 5,639 | $ | 3,438 | $ | 5,639 | ||||||||||
Nonperforming assets | 7,952 | 7,992 | 10,173 | 7,952 | 10,173 | |||||||||||||||
Nonperforming loans to loans | 0.20 | % | 0.24 | % | 0.51 | % | 0.20 | % | 0.51 | % | ||||||||||
Nonperforming assets to total assets | 0.33 | % | 0.39 | % | 0.60 | % | 0.33 | % | 0.60 | % | ||||||||||
Allowance for loan losses to: | ||||||||||||||||||||
Loans | 0.78 | % | 0.83 | % | 0.90 | % | 0.78 | % | 0.90 | % | ||||||||||
Nonperforming loans | 383.8 | % | 348.7 | % | 177.6 | % | 383.8 | % | 177.6 | % | ||||||||||
Net charge-offs to average loans | 0.01 | % | 0.04 | % | 0.05 | % | 0.02 | % | 0.04 | % | ||||||||||
Average balance sheet information | ||||||||||||||||||||
Loans | $ | 1,552,456 | $ | 1,320,065 | $ | 1,072,901 | $ | 1,436,903 | $ | 1,032,257 | ||||||||||
Total securities | 500,816 | 474,845 | 358,498 | 487,902 | 291,787 | |||||||||||||||
Other earning assets | 67,989 | 45,392 | 97,774 | 56,753 | 88,033 | |||||||||||||||
Total interest-earning assets | 2,139,040 | 1,858,931 | 1,566,554 | 1,999,759 | 1,445,045 | |||||||||||||||
Total assets | 2,194,652 | 1,905,736 | 1,596,504 | 2,050,992 | 1,474,668 | |||||||||||||||
Noninterest-bearing deposits | 32,897 | 31,463 | 27,687 | 32,184 | 25,293 | |||||||||||||||
Interest-bearing deposits | 1,593,364 | 1,450,677 | 1,284,952 | 1,522,415 | 1,159,048 | |||||||||||||||
Total deposits | 1,626,261 | 1,482,140 | 1,312,639 | 1,554,599 | 1,184,341 | |||||||||||||||
Shareholders' equity | 161,228 | 154,798 | 117,913 | 158,030 | 112,096 | |||||||||||||||
1 On a fully-taxable equivalent (“FTE”) basis assuming a 35% tax rate
2 Regulatory capital ratios are preliminary pending filing of the Company's regulatory reports
First Internet Bancorp | ||||||||||||
Condensed Consolidated Balance Sheets (unaudited) | ||||||||||||
Amounts in thousands | ||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 5,425 | $ | 4,137 | $ | 1,868 | ||||||
Interest-bearing deposits | 60,818 | 48,961 | 68,140 | |||||||||
Interest-bearing time deposits | — | 250 | 250 | |||||||||
Securities available-for-sale, at fair value | 489,775 | 470,065 | 433,806 | |||||||||
Securities held-to-maturity, at amortized cost | 19,215 | 19,218 | — | |||||||||
Loans held-for-sale | 27,335 | 13,202 | 44,503 | |||||||||
Loans | 1,698,421 | 1,433,190 | 1,111,622 | |||||||||
Allowance for loan losses | (13,194 | ) | (11,894 | ) | (10,016 | ) | ||||||
Net loans | 1,685,227 | 1,421,296 | 1,101,606 | |||||||||
Accrued interest receivable | 8,479 | 6,868 | 5,508 | |||||||||
Federal Home Loan Bank of Indianapolis stock | 19,575 | 13,050 | 8,595 | |||||||||
Cash surrender value of bank-owned life insurance | 34,602 | 24,367 | 12,932 | |||||||||
Premises and equipment, net | 9,667 | 9,853 | 9,267 | |||||||||
Goodwill | 4,687 | 4,687 | 4,687 | |||||||||
Other real estate owned | 4,488 | 4,488 | 4,488 | |||||||||
Accrued income and other assets | 11,978 | 12,361 | 6,818 | |||||||||
Total assets | $ | 2,381,271 | $ | 2,052,803 | $ | 1,702,468 | ||||||
Liabilities | ||||||||||||
Noninterest-bearing deposits | $ | 36,636 | $ | 34,427 | $ | 28,066 | ||||||
Interest-bearing deposits | 1,695,476 | 1,522,692 | 1,360,867 | |||||||||
Total deposits | 1,732,112 | 1,557,119 | 1,388,933 | |||||||||
Advances from Federal Home Loan Bank | 435,183 | 289,985 | 147,974 | |||||||||
Subordinated debt | 36,652 | 36,615 | 12,778 | |||||||||
Accrued interest payable | 210 | 148 | 138 | |||||||||
Accrued expenses and other liabilities | 13,284 | 11,445 | 16,966 | |||||||||
Total liabilities | 2,217,441 | 1,895,312 | 1,566,789 | |||||||||
Shareholders' equity | ||||||||||||
Voting common stock | 119,883 | 119,627 | 95,642 | |||||||||
Retained earnings | 49,738 | 46,139 | 37,630 | |||||||||
Accumulated other comprehensive income (loss) | (5,791 | ) | (8,275 | ) | 2,407 | |||||||
Total shareholders' equity | 163,830 | 157,491 | 135,679 | |||||||||
Total liabilities and shareholders' equity | $ | 2,381,271 | $ | 2,052,803 | $ | 1,702,468 | ||||||
First Internet Bancorp | |||||||||||||||||||
Condensed Consolidated Statements of Income (unaudited) | |||||||||||||||||||
Amounts in thousands, except per share data | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | |||||||||||||||
Interest income | |||||||||||||||||||
Loans | $ | 16,416 | $ | 14,156 | $ | 11,661 | $ | 30,572 | $ | 22,850 | |||||||||
Securities - taxable | 2,566 | 2,367 | 1,747 | 4,933 | 2,916 | ||||||||||||||
Securities - non-taxable | 696 | 697 | 368 | 1,393 | 533 | ||||||||||||||
Other earning assets | 297 | 170 | 195 | 467 | 365 | ||||||||||||||
Total interest income | 19,975 | 17,390 | 13,971 | 37,365 | 26,664 | ||||||||||||||
Interest expense | |||||||||||||||||||
Deposits | 5,324 | 4,699 | 3,930 | 10,023 | 6,818 | ||||||||||||||
Other borrowed funds | 1,677 | 1,234 | 735 | 2,911 | 1,399 | ||||||||||||||
Total interest expense | 7,001 | 5,933 | 4,665 | 12,934 | 8,217 | ||||||||||||||
Net interest income | 12,974 | 11,457 | 9,306 | 24,431 | 18,447 | ||||||||||||||
Provision for loan losses | 1,322 | 1,035 | 924 | 2,357 | 1,870 | ||||||||||||||
Net interest income after provision for loan losses | 11,652 | 10,422 | 8,382 | 22,074 | 16,577 | ||||||||||||||
Noninterest income | |||||||||||||||||||
Service charges and fees | 220 | 211 | 215 | 431 | 415 | ||||||||||||||
Mortgage banking activities | 2,155 | 1,616 | 3,295 | 3,771 | 5,549 | ||||||||||||||
Gain on sale of securities | — | — | 177 | — | 177 | ||||||||||||||
Other | 361 | 304 | 61 | 665 | 147 | ||||||||||||||
Total noninterest income | 2,736 | 2,131 | 3,748 | 4,867 | 6,288 | ||||||||||||||
Noninterest expense | |||||||||||||||||||
Salaries and employee benefits | 5,193 | 5,073 | 4,329 | 10,266 | 8,227 | ||||||||||||||
Marketing, advertising and promotion | 544 | 518 | 434 | 1,062 | 898 | ||||||||||||||
Consulting and professional fees | 764 | 813 | 895 | 1,577 | 1,533 | ||||||||||||||
Data processing | 245 | 237 | 275 | 482 | 549 | ||||||||||||||
Loan expenses | 248 | 214 | 200 | 462 | 384 | ||||||||||||||
Premises and equipment | 1,025 | 953 | 963 | 1,978 | 1,761 | ||||||||||||||
Deposit insurance premium | 300 | 315 | 215 | 615 | 395 | ||||||||||||||
Other | 604 | 575 | 564 | 1,179 | 1,133 | ||||||||||||||
Total noninterest expense | 8,923 | 8,698 | 7,875 | 17,621 | 14,880 | ||||||||||||||
Income before income taxes | 5,465 | 3,855 | 4,255 | 9,320 | 7,985 | ||||||||||||||
Income tax provision | 1,464 | 1,023 | 1,421 | 2,487 | 2,719 | ||||||||||||||
Net income | $ | 4,001 | $ | 2,832 | $ | 2,834 | $ | 6,833 | $ | 5,266 | |||||||||
Per common share data | |||||||||||||||||||
Earnings per share - basic | $ | 0.61 | $ | 0.43 | $ | 0.57 | $ | 1.04 | $ | 1.11 | |||||||||
Earnings per share - diluted | $ | 0.61 | $ | 0.43 | $ | 0.57 | $ | 1.04 | $ | 1.10 | |||||||||
Dividends declared per share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.12 | $ | 0.12 | |||||||||
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 | ||||||||||||||||||||||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | ||||||||||||||||||||||||||||||
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 | $ | 1,570,235 | $ | 16,416 | 4.19 | % | $ | 1,338,694 | $ | 14,156 | 4.29 | % | $ | 1,110,282 | $ | 11,661 | 4.22 | % | ||||||||||||||
Securities - taxable | 405,380 | 2,566 | 2.54 | % | 381,522 | 2,367 | 2.52 | % | 307,336 | 1,747 | 2.29 | % | ||||||||||||||||||||
Securities - non-taxable | 95,436 | 696 | 2.93 | % | 93,323 | 697 | 3.03 | % | 51,162 | 368 | 2.89 | % | ||||||||||||||||||||
Other earning assets | 67,989 | 297 | 1.75 | % | 45,392 | 170 | 1.52 | % | 97,774 | 195 | 0.80 | % | ||||||||||||||||||||
Total interest-earning assets | 2,139,040 | 19,975 | 3.75 | % | 1,858,931 | 17,390 | 3.79 | % | 1,566,554 | 13,971 | 3.59 | % | ||||||||||||||||||||
Allowance for loan losses | (12,372 | ) | (11,299 | ) | (9,472 | ) | ||||||||||||||||||||||||||
Noninterest-earning assets | 67,984 | 58,104 | 39,422 | |||||||||||||||||||||||||||||
Total assets | $ | 2,194,652 | $ | 1,905,736 | $ | 1,596,504 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 92,676 | $ | 127 | 0.55 | % | $ | 88,295 | $ | 119 | 0.55 | % | $ | 83,712 | $ | 114 | 0.55 | % | ||||||||||||||
Regular savings accounts | 34,545 | 67 | 0.78 | % | 28,333 | 47 | 0.67 | % | 28,023 | 40 | 0.57 | % | ||||||||||||||||||||
Money market accounts | 394,735 | 915 | 0.93 | % | 347,696 | 696 | 0.81 | % | 363,767 | 641 | 0.71 | % | ||||||||||||||||||||
Certificates and brokered deposits | 1,071,408 | 4,215 | 1.58 | % | 986,353 | 3,837 | 1.58 | % | 809,450 | 3,135 | 1.56 | % | ||||||||||||||||||||
Total interest-bearing deposits | 1,593,364 | 5,324 | 1.34 | % | 1,450,677 | 4,699 | 1.31 | % | 1,284,952 | 3,930 | 1.23 | % | ||||||||||||||||||||
Other borrowed funds | 398,044 | 1,677 | 1.69 | % | 262,573 | 1,234 | 1.91 | % | 161,127 | 735 | 1.83 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 1,991,408 | 7,001 | 1.41 | % | 1,713,250 | 5,933 | 1.40 | % | 1,446,079 | 4,665 | 1.30 | % | ||||||||||||||||||||
Noninterest-bearing deposits | 32,897 | 31,463 | 27,687 | |||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 9,119 | 6,225 | 4,825 | |||||||||||||||||||||||||||||
Total liabilities | 2,033,424 | 1,750,938 | 1,478,591 | |||||||||||||||||||||||||||||
Shareholders' equity | 161,228 | 154,798 | 117,913 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,194,652 | $ | 1,905,736 | $ | 1,596,504 | ||||||||||||||||||||||||||
Net interest income | $ | 12,974 | $ | 11,457 | $ | 9,306 | ||||||||||||||||||||||||||
Interest rate spread | 2.34 | % | 2.39 | % | 2.29 | % | ||||||||||||||||||||||||||
Net interest margin | 2.43 | % | 2.50 | % | 2.39 | % | ||||||||||||||||||||||||||
Net interest margin - FTE 1 | 2.53 | % | 2.57 | % | 2.43 | % | ||||||||||||||||||||||||||
First Internet Bancorp | |||||||||||||||||||||
Average Balances and Rates (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||
June 30, 2017 | June 30, 2016 | ||||||||||||||||||||
Average Balance | Interest / Dividends | Yield / Cost | Average Balance | Interest / Dividends | Yield / Cost | ||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||
Loans, including loans held-for-sale | $ | 1,455,104 | $ | 30,572 | 4.24 | % | $ | 1,065,225 | $ | 22,850 | 4.31 | % | |||||||||
Securities - taxable | 393,517 | 4,933 | 2.53 | % | 255,116 | 2,916 | 2.30 | % | |||||||||||||
Securities - non-taxable | 94,385 | 1,393 | 2.98 | % | 36,671 | 533 | 2.92 | % | |||||||||||||
Other earning assets | 56,753 | 467 | 1.66 | % | 88,033 | 365 | 0.83 | % | |||||||||||||
Total interest-earning assets | 1,999,759 | 37,365 | 3.77 | % | 1,445,045 | 26,664 | 3.71 | % | |||||||||||||
Allowance for loan losses | (11,839 | ) | (9,063 | ) | |||||||||||||||||
Noninterest-earning assets | 63,072 | 38,686 | |||||||||||||||||||
Total assets | $ | 2,050,992 | $ | 1,474,668 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 90,498 | $ | 246 | 0.55 | % | $ | 82,525 | $ | 225 | 0.55 | % | |||||||||
Regular savings accounts | 31,456 | 114 | 0.73 | % | 26,522 | 76 | 0.58 | % | |||||||||||||
Money market accounts | 371,346 | 1,611 | 0.87 | % | 357,288 | 1,257 | 0.71 | % | |||||||||||||
Certificates and brokered deposits | 1,029,115 | 8,052 | 1.58 | % | 692,713 | 5,260 | 1.53 | % | |||||||||||||
Total interest-bearing deposits | 1,522,415 | 10,023 | 1.33 | % | 1,159,048 | 6,818 | 1.18 | % | |||||||||||||
Other borrowed funds | 330,683 | 2,911 | 1.78 | % | 173,372 | 1,399 | 1.62 | % | |||||||||||||
Total interest-bearing liabilities | 1,853,098 | 12,934 | 1.41 | % | 1,332,420 | 8,217 | 1.24 | % | |||||||||||||
Noninterest-bearing deposits | 32,184 | 25,293 | |||||||||||||||||||
Other noninterest-bearing liabilities | 7,680 | 4,859 | |||||||||||||||||||
Total liabilities | 1,892,962 | 1,362,572 | |||||||||||||||||||
Shareholders' equity | 158,030 | 112,096 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,050,992 | $ | 1,474,668 | |||||||||||||||||
Net interest income | $ | 24,431 | $ | 18,447 | |||||||||||||||||
Interest rate spread | 2.36 | % | 2.47 | % | |||||||||||||||||
Net interest margin | 2.46 | % | 2.57 | % | |||||||||||||||||
Net interest margin - FTE 1 | 2.55 | % | 2.60 | % | |||||||||||||||||
1 On a fully-taxable equivalent (“FTE”) basis assuming a 35% tax rate
First Internet Bancorp | |||||||||||||||||||||
Loans and Deposits (unaudited) | |||||||||||||||||||||
Amounts in thousands | |||||||||||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Commercial loans | |||||||||||||||||||||
Commercial and industrial | $ | 110,379 | 6.5 | % | $ | 97,487 | 6.8 | % | $ | 111,130 | 10.0 | % | |||||||||
Owner-occupied commercial real estate | 66,952 | 4.0 | % | 62,887 | 4.4 | % | 46,543 | 4.2 | % | ||||||||||||
Investor commercial real estate | 10,062 | 0.6 | % | 8,510 | 0.6 | % | 12,976 | 1.2 | % | ||||||||||||
Construction | 45,931 | 2.7 | % | 49,618 | 3.5 | % | 53,368 | 4.8 | % | ||||||||||||
Single tenant lease financing | 747,790 | 44.0 | % | 665,382 | 46.4 | % | 500,937 | 45.1 | % | ||||||||||||
Public finance | 179,873 | 10.6 | % | 77,995 | 5.4 | % | — | 0.0 | % | ||||||||||||
Total commercial loans | 1,160,987 | 68.4 | % | 961,879 | 67.1 | % | 724,954 | 65.3 | % | ||||||||||||
Consumer loans | |||||||||||||||||||||
Residential mortgage | 292,997 | 17.3 | % | 246,014 | 17.2 | % | 202,107 | 18.2 | % | ||||||||||||
Home equity | 33,312 | 2.0 | % | 34,925 | 2.4 | % | 38,981 | 3.5 | % | ||||||||||||
Trailers | 94,036 | 5.5 | % | 86,692 | 6.0 | % | 74,777 | 6.7 | % | ||||||||||||
Recreational vehicles | 63,514 | 3.7 | % | 57,234 | 4.0 | % | 44,387 | 4.0 | % | ||||||||||||
Other consumer loans | 51,052 | 3.0 | % | 44,265 | 3.1 | % | 22,592 | 2.0 | % | ||||||||||||
Total consumer loans | 534,911 | 31.5 | % | 469,130 | 32.7 | % | 382,844 | 34.4 | % | ||||||||||||
Net deferred loan fees, premiums and discounts | 2,523 | 0.1 | % | 2,181 | 0.2 | % | 3,824 | 0.3 | % | ||||||||||||
Total loans | $ | 1,698,421 | 100.0 | % | $ | 1,433,190 | 100.0 | % | $ | 1,111,622 | 100.0 | % | |||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | |||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||
Deposits | |||||||||||||||||||||
Noninterest-bearing deposits | $ | 36,636 | 2.1 | % | $ | 34,427 | 2.2 | % | $ | 28,066 | 2.0 | % | |||||||||
Interest-bearing demand deposits | 94,726 | 5.5 | % | 94,461 | 6.1 | % | 83,031 | 6.0 | % | ||||||||||||
Regular savings accounts | 35,764 | 2.1 | % | 31,291 | 2.0 | % | 28,900 | 2.1 | % | ||||||||||||
Money market accounts | 386,224 | 22.3 | % | 371,115 | 23.8 | % | 373,932 | 26.9 | % | ||||||||||||
Certificates of deposits | 1,176,230 | 67.9 | % | 1,023,294 | 65.7 | % | 862,150 | 62.1 | % | ||||||||||||
Brokered deposits | 2,532 | 0.1 | % | 2,531 | 0.2 | % | 12,854 | 0.9 | % | ||||||||||||
Total deposits | $ | 1,732,112 | 100.0 | % | $ | 1,557,119 | 100.0 | % | $ | 1,388,933 | 100.0 | % | |||||||||
First Internet Bancorp | ||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||
Amounts in thousands, except per share data | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | June 30, 2017 | June 30, 2016 | ||||||||||||||||
Total equity - GAAP | $ | 163,830 | $ | 157,491 | $ | 135,679 | $ | 163,830 | $ | 135,679 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible common equity | $ | 159,143 | $ | 152,804 | $ | 130,992 | $ | 159,143 | $ | 130,992 | ||||||||||
Total assets - GAAP | $ | 2,381,271 | $ | 2,052,803 | $ | 1,702,468 | $ | 2,381,271 | $ | 1,702,468 | ||||||||||
Adjustments: | ||||||||||||||||||||
Goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Tangible assets | $ | 2,376,584 | $ | 2,048,116 | $ | 1,697,781 | $ | 2,376,584 | $ | 1,697,781 | ||||||||||
Common shares outstanding | 6,513,577 | 6,497,662 | 5,533,050 | 6,513,577 | 5,533,050 | |||||||||||||||
Book value per common share | $ | 25.15 | $ | 24.24 | $ | 24.52 | $ | 25.15 | $ | 24.52 | ||||||||||
Effect of goodwill | (0.72 | ) | (0.72 | ) | (0.85 | ) | (0.72 | ) | (0.85 | ) | ||||||||||
Tangible book value per common share | $ | 24.43 | $ | 23.52 | $ | 23.67 | $ | 24.43 | $ | 23.67 | ||||||||||
Total shareholders' equity to assets ratio | 6.88 | % | 7.67 | % | 7.97 | % | 6.88 | % | 7.97 | % | ||||||||||
Effect of goodwill | (0.18 | %) | (0.21 | %) | (0.25 | %) | (0.18 | )% | (0.25 | )% | ||||||||||
Tangible common equity to tangible assets ratio | 6.70 | % | 7.46 | % | 7.72 | % | 6.70 | % | 7.72 | % | ||||||||||
Total average equity - GAAP | $ | 161,228 | $ | 154,798 | $ | 117,913 | $ | 158,030 | $ | 112,096 | ||||||||||
Adjustments: | ||||||||||||||||||||
Average goodwill | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | (4,687 | ) | ||||||||||
Average tangible common equity | $ | 156,541 | $ | 150,111 | $ | 113,226 | $ | 153,343 | $ | 107,409 | ||||||||||
Return on average shareholders' equity | 9.95 | % | 7.42 | % | 9.67 | % | 8.72 | % | 9.45 | % | ||||||||||
Effect of goodwill | 0.30 | % | 0.23 | % | 0.40 | % | 0.27 | % | 0.41 | % | ||||||||||
Return on average tangible common equity | 10.25 | % | 7.65 | % | 10.07 | % | 8.99 | % | 9.86 | % | ||||||||||
Net interest income | $ | 12,974 | $ | 11,457 | $ | 9,306 | $ | 24,431 | $ | 18,447 | ||||||||||
Adjustments: | ||||||||||||||||||||
Fully-taxable equivalent adjustments 1 | 543 | 306 | 144 | 849 | 213 | |||||||||||||||
Net interest income - FTE | $ | 13,517 | $ | 11,763 | $ | 9,450 | $ | 25,280 | $ | 18,660 | ||||||||||
Net interest margin | 2.43 | % | 2.50 | % | 2.39 | % | 2.46 | % | 2.57 | % | ||||||||||
Effect of fully-taxable equivalent adjustments 1 | 0.10 | % | 0.07 | % | 0.04 | % | 0.09 | % | 0.03 | % | ||||||||||
Net interest margin - FTE | 2.53 | % | 2.57 | % | 2.43 | % | 2.55 | % | 2.60 | % | ||||||||||
1 Assuming a 35% tax rate