First Internet Bancorp Reports Record Quarterly Revenue and Continued Net Interest Margin Expansion

- Record quarterly revenue of $43.9 million, up 7% from the prior quarter -
- NIM expands 8 basis points to 2.47%; FTE NIM increases to 2.55%¹ -
- Net charge-offs and delinquencies decline significantly from the prior quarter -
- Diluted earnings per share of $0.54; adjusted diluted earnings per share of $0.57¹ -
- Company to hold earnings call today at 5pm ET -

FISHERS, Ind.--(BUSINESS WIRE)--First Internet Bancorp (the “Company”) (Nasdaq: INBK), the parent company of First Internet Bank (the “Bank”), announced today financial and operational results for the third quarter ended September 30, 2026.

Key Business Updates

• Record Quarterly Revenue and Continued Margin Expansion: Total revenue rose 7% quarter-over-quarter to $43.9 million, driven by growth in both net interest income (up 7%) and noninterest income (up 6%). Fully-taxable equivalent (“FTE”) net interest margin expanded again in the third quarter to 2.55%¹ (up 8 basis points). Additionally, when combined with well-managed expenses, pre-provision net revenue grew 14% quarter-over-quarter to $17.1 million¹. Fintech partnerships revenue contributed to the growth in net interest income from embedded finance as well as noninterest income as fintech fee revenue was up 13% from the prior quarter.
• Overall Credit Quality Normalization on Track: Provision for credit losses for the third quarter of $11.6 million, down 13% from $13.4 million in the second quarter of 2026. The decrease was driven by lower net charge-offs, which declined to 0.82% of average loans from 1.77% in the second quarter of 2026, partially offset by specific reserves related to franchise finance loans placed on nonaccrual, including one large relationship the Company took action on late in the quarter ($2.6 million of specific reserves). Furthermore, total delinquencies, excluding nonperforming loans, declined for the second consecutive quarter and are down 38% from the prior quarter, representing 0.48% of total performing loans.
• Loan Portfolio Re-mix Toward Core Lending Areas: In line with the previously stated strategy, the loan portfolio continued to shift toward core verticals with higher new origination yields. As a result, the loan portfolio yield increased 8 basis points (“bps”) from the prior quarter. This reflected strong quarterly growth in investor commercial real estate, single tenant lease financing, wealth advisory lending and embedded finance, while previously exited, lower-yielding portfolios continued to run off. At the same time, the growing fintech deposit base allowed the Company to retire higher-cost CDs and brokered deposits, contributing to the margin expansion.

“Our third quarter results reflect continued execution of the strategy we have laid out for the last several quarters, with earnings momentum continuing to build,” said David Becker, Chairman and CEO of First Internet Bancorp. “Total revenue hit an all-time high in the quarter, driving positive operating leverage powered by record net interest income, continued net interest margin expansion and solid fee revenue growth. Additionally, credit trends continued to improve with meaningful declines in both net charge-offs and delinquencies. We also took proactive action on a larger franchise finance relationship this quarter; however, our underlying earnings strength allowed us to absorb the related provision impact and still produce strong quarterly growth in net income and earnings per share.

“The bottom line is that First Internet Bancorp is getting stronger every day. Loan pipelines in our scalable core lending areas are robust, and emerging verticals such as embedded finance and wealth advisory lending have exciting long-term growth potential. Our fintech platform continues to expand, driving growth in both fee revenue and lower-cost deposits. We also continue to invest in automation and AI-enabled tools across our lending and servicing operations, improving efficiency while elevating the experience we deliver for our customers and partners. Taken together, these trends create an exciting pathway towards accelerating earnings and stronger profitability. As we move into the fourth quarter and into 2027, we are confident in our ability to build on this momentum and deliver long-term value for our shareholders.”

Third Quarter 2026 Financial Performance

• Net income of $4.8 million and diluted earnings per share of $0.54
• Adjusted net income of $5.1 million¹ and adjusted diluted earnings per share of $0.57¹, both up significantly from the prior quarter and prior year period
  • Pre-tax non-recurring severance costs of $0.4 million recognized during the quarter
• Record quarterly revenue of $43.9 million, up 7% from the prior quarter and 1% from adjusted quarterly revenue¹ in the prior year period
• Net interest income of $34.7 million and FTE net interest income of $35.9 million¹, both increased 7% over the prior quarter and 14% over the prior year period
  • Achieved strong quarterly growth despite recognizing $1.2 million in interest reversals related to franchise finance loans placed on nonaccrual during the quarter ($0.6 million related to the large relationship discussed above)
• Net interest margin of 2.47% and FTE net interest margin of 2.55%¹, both increasing 8 bps from the prior quarter and 43 bps from the prior year period
  • Interest reversals discussed above impacted net interest margin by 9 bps
• Noninterest income of $9.2 million, up 6% from the prior quarter and down 30% from adjusted noninterest income¹ in the prior year period

• Adjusted pre-provision net revenue (“PPNR”) of $17.1 million¹, up 14% from the prior quarter and down 6% from the prior year period

• Total loan balances of $3.9 billion, up $52.9 million, or 1%, from the second quarter of 2026
  • The yield on the loan portfolio increased to 6.42%, up 8 bps from the prior quarter and 24 bps from the prior year period
  • Strong loan production in core verticals partially offset by early payoffs and runoff in exited portfolios
• Total deposits of $5.2 billion, up $321.4 million, or 7%, from the second quarter of 2026
  • Continued growth in fintech deposits, providing capacity to replace higher-cost CDs and brokered deposits
  • The cost of interest-bearing deposits declined to 3.32%, down 6 bps from the prior quarter and 55 bps from the prior year period
  • Approximately $2.9 billion of fintech deposits held off-balance sheet in a deposit network, providing flexibility to manage the size of the balance sheet
  • Loans to deposits ratio of 75%
• Provision for credit losses of $11.6 million, down $1.8 million, or 13%, from the second quarter of 2026
• Net charge-offs to average loans of 0.82%, a decrease from 1.77% in the second quarter of 2026
  • Decrease in net charge-offs due to declines in franchise finance and small business lending net charge-offs
• Nonperforming loans (“NPLs”) to total loans of 1.63%, compared to 1.58% in the second quarter of 2026; allowance for credit losses - loans (“ACL”) to total loans of 1.48%, compared to 1.39% in the second quarter of 2026
  • Increase in NPLs due primarily to franchise finance loans moved to nonaccrual
  • NPLs / total loans of 1.14%¹ excluding fully-guaranteed balances, up from 1.07% in the second quarter of 2026
  • ACL to NPLs of 91%; or 131%¹ excluding fully-guaranteed balances
• Tangible common equity to tangible assets of 5.94%¹, and 6.96%¹ ex-AOCI and adjusted for normalized cash balances; CET1 ratio of 8.86%²; total capital ratio of 12.32%²
• Tangible book value per common share of $40.04¹, down from $41.09¹ in the second quarter of 2026

Fourth Quarter 2026 Outlook

• Diluted earnings per share of $1.02 to $1.07
• FTE net interest margin of 2.75% to 2.80%, driven by ongoing loan portfolio optimization and stable deposit costs (assumes additional 25 bp increase in Fed Funds rate in December)
• FTE net interest income of around $38.5 million
• Noninterest income of around $7.5 million, reflecting lower small business lending originations and gain on sale activity, partially offset by continued growth in fintech revenue
• Noninterest expense of around $26.5 million
• Provision for credit losses of $7.5 million to $8.0 million

Conference Call and Webcast

The Company will host a conference call and webcast at 5:00 p.m. Eastern Time today, October 29, 2026, to discuss its quarterly financial results. The call can be accessed via telephone at (833) 461-5787; meeting id: 571140239. To access the webcast and view the presentation slides, please visit www.firstinternetbancorp.com and click the link provided for Earnings Call Webcast.

The webcast and slides will be available on the Company’s website shortly after the call has ended and will be archived on the Company’s website for 12 months.

About First Internet Bancorp

First Internet Bancorp is a bank holding company with assets of $5.9 billion as of September 30, 2026. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. First Internet Bank provides consumer and small business deposits, commercial real estate and construction financing, SBA financing, public finance, consumer loans, and specialty finance services nationally, as well as commercial and industrial loans and treasury management services on a regional basis. 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 First Internet Bank, including its products and services, is available at www.firstib.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements with respect to the financial condition, results of operations, trends in lending policies and loan programs, plans and prospective business partnerships, objectives, future performance and business of the Company. Forward-looking statements are generally identifiable by the use of words such as “anticipate,” “believe,” “better than,” “continue,” “could,” “drive,” “enhance,” “estimate,” “expand,” “expect,” “future,” “going forward,” “growth,” ”improve,” “increase,” “looking ahead,” “maintain,” “may,” “ongoing,” “opportunities,” “pending,” “plan,” “position,” “preliminary,” “progress,” “remain,” “setting the stage,” “should,” “stable,” “thereafter,” “well-positioned,” “will,” 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. Such statements are subject to certain risks and uncertainties including: our business and operations and the business and operations of our vendors and customers; general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products; our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that is the collateral for our loans. Other factors that may cause such differences include: failures or breaches 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 and industrial, construction, and SBA loan portfolios; competition with national, regional and community financial institutions; the loss of key members of senior management; the anticipated impacts of inflation and rising interest rates on the general economy; 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, tangible common equity to tangible assets, average tangible common equity, return on average tangible common equity, total interest income – FTE, net interest income – FTE, net interest margin – FTE, adjusted total revenue, pre-provision net revenue, adjusted pre-provision net revenue, adjusted noninterest income, adjusted noninterest expense, adjusted income before income taxes, adjusted income tax provision, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders’ equity, adjusted return on average tangible common equity, adjusted tangible common equity, adjusted tangible assets, adjusted tangible common equity to adjusted tangible assets, adjusted nonperforming loans to total loans and adjusted allowance for credit losses – loans to nonperforming loans 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 are useful to investors by providing 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
Paula Deemer
Director of Corporate Administration
(317) 428-4628
investors@firstib.com

Media
PANBlast
Zach Weismiller
firstib@panblastpr.com