First Internet Bancorp (INBK) | Investment Case

1. Company Snapshot

1.a. Company Description

First Internet Bancorp operates as the bank holding company for First Internet Bank of Indiana that provides commercial and retail banking products and services to individuals and commercial customers in the United States.The company accepts non-interest bearing and interest-bearing demand deposit, savings, money market, and brokered deposit accounts, as well as certificates of deposit.It also offers commercial and industrial, owner-occupied and investor commercial real estate, construction, residential mortgage, home equity and improvement, small installment, term, and other consumer loans, as well as single tenant lease financing, and public and healthcare finance; franchise finance; and small business lending.

In addition, the company is involved in the purchase, manage, service, and safekeeping of municipal securities; and provision of municipal finance lending and leasing products to government entities.In addition, it offers corporate credit card and treasury management services.The company provides its services through its firstib.com Website.

First Internet Bancorp was founded in 1999 and is headquartered in Fishers, Indiana.

Show Full description

1.b. Last Insights on INBK

Recent positive drivers behind First Internet Bancorp's stock performance include: * Strong net interest income growth, driven by a significant increase in loan sales and a stable interest rate environment. * Attractive interest payments from the bank's baby bond, offering a floating rate yield of 3M SOFR +437 bps, surpassing the previous fixed rate. * Analysts' price targets point to a 25% upside in the stock, indicating a potential rally. * Agreement among analysts in raising earnings estimates suggests an upside in the stock. * The company's Q3 results show strong profits from loan sales, despite higher loan loss provisions. * The bank's floating debt securities offer high single-digit yields, providing attractive interest payments.

1.c. Company Highlights

Last Price	23.02
Change Percentage	-0.30%
Open	23.23
Previous Close	23.09
Market Cap ( Millions)	201
Volume	52564
Year High	28.51
Year Low	17.05
M A 50	20.86
M A 200	21.94

FCF Yield	-5.12%
Dividend Yield	1.04%
ROE	-9.44%
Debt / Equity	98.67%
Net Debt / EBIDTA	-764.32%
Price To Book	0.56
Price Earnings Ratio	-5.71
Price To FCF	-19.52
Price To sales	0.63
EV / EBITDA	-12.04

2. First Internet Bancorp's Strong Q4 Results Driven by Digital Banking Model

First Internet Bancorp reported strong fourth-quarter results, with net income of $5.3 million or $0.60 per diluted share, and adjusted earnings per share of $0.64, beating estimates of $0.59. Revenue was up 21% year-over-year, driven by its differentiated digital banking model, with net interest income growing 29% to $30.3 million. The company's core business fundamentals remain robust, with quarterly revenue growth attributed to its digital-first approach and disciplined expense management.

Publication Date: Mar -08

                                    📋 Highlights
                                    Revenue Growth::
                                                Q4 revenue up 21% YoY driven by digital banking model
BaaS Expansion::
                                                Generated $1.3B in new deposits (300% YoY) and processed $165B in payments (225% YoY)
Strategic Asset Sale::
                                                Sold $850M in single tenant loans to Blackstone, improving capital and balance sheet flexibility
2026 Guidance::
                                                Anticipates 15-17% loan growth, 2.75-2.8% net interest margin, and $155-160M in net interest income
Credit Risk Management::
                                                $16M increase in criticized loans, with SBA and franchise finance as primary contributors

                                

Business Segment Performance

The company's banking-as-a-service (BaaS) initiatives generated over $1.3 billion in new deposits, more than tripling the amount from the prior year, and processed over $165 billion in payments volume, a 225% increase. Its SBA business maintained its position as a top 10 SBA 7(a) lender with nearly $580 million in funded originations. The company's fintech efforts are driving growth, with a significant increase in payments quarter over quarter, resulting in "other noninterest income" growing 30% quarter over quarter to almost $9.9 million.

Asset Quality and Provisioning

Criticized loans increased by $16 million, with SBA and franchise finance being the main contributors. The company is actively monitoring loans in this bucket and working with borrowers. The provision guidance of $50-53 million contemplates charge-offs and specific reserves, with around half of it being assumptions on charge-offs. The company expects the allowance to grow by $20-30 million by year-end, driven by loan growth and specific reserves.

Outlook and Guidance

Looking ahead to 2026, the company expects continued loan growth of 15% to 17%, driven by strong pipelines across commercial lending verticals. It anticipates net interest margin expansion to 2.75% to 2.8% and fully taxable equivalent net interest income of $155 million to $160 million for the full year. The earnings per share guidance is $2.35-2.45, with a midpoint of $2.40. Analysts estimate next year's revenue growth at 13.4%.

Valuation

The current Price-to-Tangible Book Value (P/TBV) is around 0.49, indicating that the stock may be undervalued. The Dividend Yield is 1.19%, which is relatively attractive for a bank stock. With the company's strong growth prospects and improving profitability, the current valuation multiples appear reasonable.

3. NewsRoom

First Internet Bank Named a 2026 USA TODAY Top Workplace

Apr -15

Source: businesswire.com

First Internet Bank to Speak at Nacha Smarter Faster Payments 2026 Conference

Apr -08

Source: businesswire.com

First Internet (INBK) Surges 6.1%: Is This an Indication of Further Gains?

Apr -07

Source: zacks.com

First Internet Bancorp (NASDAQ:INBK) vs. First Bank (NASDAQ:FRBA) Head to Head Comparison

Mar -26

Source: defenseworld.net

First Internet Bank Announces Gary Carter as Small Business Administration National Sales Manager

Mar -25

Source: businesswire.com

Analyzing MainStreet Bank (NASDAQ:MNSB) & First Internet Bancorp (NASDAQ:INBK)

Mar -21

Source: defenseworld.net

First Internet Bank Named to MoneyRates' 2026 Best Banks Awards for Checking Accounts

Mar -17

Source: businesswire.com

Analysts Set First Internet Bancorp (NASDAQ:INBK) Target Price at $25.17

Mar -05

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.00%)

6. Segments

Banking and Related Activities

Expected Growth: 12%

First Internet Bancorp's 12% growth in Banking and Related Activities is driven by increasing online banking adoption, strategic commercial loan growth, and expansion of treasury management services. Additionally, the company's focus on digital transformation, improved operational efficiency, and favorable interest rate environment contribute to its growth momentum.

7. Detailed Products

Commercial Banking

First Internet Bancorp offers a range of commercial banking services, including cash management, treasury management, and commercial lending to businesses of all sizes.

Consumer Banking

First Internet Bancorp provides personal banking services, including checking and savings accounts, credit cards, and personal loans, to individuals and families.

Mortgage Lending

First Internet Bancorp offers a variety of mortgage loan options, including conventional, FHA, and VA loans, to help individuals and families achieve homeownership.

Treasury Management

First Internet Bancorp provides treasury management services, including account management, payment processing, and fraud prevention, to help businesses optimize their cash flow.

Wealth Management

First Internet Bancorp offers wealth management services, including investment management, financial planning, and retirement planning, to help individuals and families achieve their long-term financial goals.

8. First Internet Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for First Internet Bancorp is medium, as there are alternative banking services available to customers, but the company's online banking platform and digital services provide a competitive advantage.

Bargaining Power Of Customers

The bargaining power of customers is low, as First Internet Bancorp's online banking platform and digital services provide a convenient and user-friendly experience, making it difficult for customers to negotiate better terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low, as First Internet Bancorp is a large financial institution with significant bargaining power, allowing it to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The threat of new entrants is low, as entering the banking industry requires significant capital and regulatory approvals, making it difficult for new entrants to compete with established players like First Internet Bancorp.

Intensity Of Rivalry

The intensity of rivalry is high, as the banking industry is highly competitive, with many established players competing for market share, and First Internet Bancorp must continually innovate and improve its services to remain competitive.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	66.49%
Debt Cost	3.95%
Equity Weight	33.51%
Equity Cost	7.64%
WACC	5.19%
Leverage	198.40%

11. Quality Control: First Internet Bancorp passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

AmeriServ Financial

A-Score: 6.0/10

Value: 6.9

Growth: 3.4

Quality: 4.2

Yield: 7.0

Momentum: 8.0

Volatility: 6.3

1-Year Total Return ->

Alerus Financial

A-Score: 5.9/10

Value: 6.7

Growth: 3.0

Quality: 6.3

Yield: 7.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

C&F Financial

A-Score: 5.6/10

Value: 7.4

Growth: 4.7

Quality: 6.1

Yield: 6.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

Metropolitan Bank

A-Score: 5.5/10

Value: 6.9

Growth: 8.0

Quality: 5.7

Yield: 0.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

First Internet

A-Score: 4.4/10

Value: 9.8

Growth: 6.7

Quality: 3.8

Yield: 2.0

Momentum: 0.0

Volatility: 4.0

1-Year Total Return ->

William Penn

A-Score: 4.3/10

Value: 6.0

Growth: 4.3

Quality: 4.6

Yield: 1.0

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

0.98%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.19%

First Internet Bancorp - US3205571017

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on INBK

1.c. Company Highlights

Strong Momentum

More Volatile

Average Yield

Earnings Beats

Revenues Beats

Earnings Miss

Lower Growth

Lower Yield

Lower Quality

Revenues Miss

Weak Momentum

Higher Growth

Cheaper

2. First Internet Bancorp's Strong Q4 Results Driven by Digital Banking Model

Business Segment Performance

Asset Quality and Provisioning

Outlook and Guidance

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.00%)

6. Segments

Banking and Related Activities

Expected Growth: 12%

7. Detailed Products

Commercial Banking

Consumer Banking

Mortgage Lending

Treasury Management

Wealth Management

8. First Internet Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: First Internet Bancorp passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.02$

Current Price

23.02$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA