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	19.73
Change Percentage	-2.06%
Open	20.05
Previous Close	20.14
Market Cap ( Millions)	172
Volume	55331
Year High	42.75
Year Low	17.05
M A 50	19.92
M A 200	23.7

FCF Yield	-37.91%
Dividend Yield	1.22%
ROE	-8.75%
Debt / Equity	100.77%
Net Debt / EBIDTA	-806.88%
Price To Book	0.49
Price Earnings Ratio	-5.21
Price To FCF	-2.64
Price To sales	0.51
EV / EBITDA	-12.1

2. Bank's Q3 Earnings: A Mixed Bag

The bank reported a net loss of $41.6 million or $0.0476 per diluted share, missing analyst estimates of $0.66 per share. However, adjusted net loss for the quarter was $12.5 million or $1.43 per diluted share, excluding the pretax loss on the loan sale of $37.8 million. Revenue growth was driven by a significant increase in the gain on sale of SBA guaranteed loan balances, with adjusted total revenues reaching $43.5 million, a 30% increase over the second quarter. Net interest income was also up, marking the eighth consecutive quarter of growth, increasing over 8% compared to the linked quarter and was up 40% compared to the third quarter of 2024. As Kenneth Lovik noted, "adjusted pretax pre-provision income totaled $18.1 million, an increase of over 50% from the second quarter."

Publication Date: Oct -28

                                    📋 Highlights
                                    Adjusted Total Revenues:
                                                reached $43.5 million, a 30% increase from the second quarter.
Net Interest Margin (NIM):
                                                rose 8 basis points to 2.12% on a fully tax-equivalent basis.
STL Loan Sale Impact:
                                                involved $837 million in loans, enhancing capital ratios and projecting a 2.4–2.5% NIM in Q4 2025.
Adjusted Net Loss:
                                                was $12.5 million ($1.43 per share), but pre-provision income hit $18.1 million (+50% QoQ).
2026 NII Guidance:
                                                estimates $149–$150 million (GAAP) and $153.4–$154.4 million (FTE), up from $139.7 million in 2024.

                                

Segment Performance

The SBA and BaaS businesses contributed meaningful growth to noninterest income, with the gain on sale of SBA loans rebounding strongly in the third quarter, generating $10.6 million in gain on sale revenue. The bank ended the quarter with $104 million in held-for-sale loans, and the pipeline remains robust, positioning the bank well for gain on sale in future periods and for interest income on retained balances.

Credit Outlook

Delinquency numbers are coming down, with only 4 delinquent accounts in the franchise lending portfolio at 35 basis points. The bank's CECL model takes into account delinquencies in the calculation of the reserve, and nonperformers are taken out of the model and have specific reserves. The bank is confident that delinquencies will remain low, and NPAs will move down from here.

Guidance and Valuation

The bank expects loan balances to increase at an unannualized rate in the range of 4% to 6% during the fourth quarter and net interest margin on a fully taxable equivalent basis to increase to the range of 2.4% to 2.5%. With a P/TBV ratio of 0.48, the bank's valuation appears reasonable. The dividend yield of 1.25% is also attractive. Analysts estimate next year's revenue growth at 28.0%, indicating a positive outlook for the bank's future performance.

Future Prospects

The bank is exploring fintech opportunities and leasing deals that could grow significantly, offering 7.5% to 8% yields. It is also looking at forward flow opportunities with Blackstone. With guidance for 2026 NII at $149 million to $150 million on a GAAP basis, the bank remains committed to enhancing profitability and long-term value.

3. NewsRoom

Creative Planning Makes New Investment in First Internet Bancorp $INBK

Nov -27

Source: defenseworld.net

First Internet Bancorp – Fixed- (NASDAQ:INBKZ) Shares Up 0.1% – Should You Buy?

Nov -06

Source: defenseworld.net

Why I (Finally) Bought First Internet Bancorp

Oct -26

Source: seekingalpha.com

First Internet Bancorp (INBK) Q3 2025 Earnings Call Transcript

Oct -23

Source: seekingalpha.com

First Internet Bancorp (NASDAQ:INBK) Share Price Passes Below Two Hundred Day Moving Average on Disappointing Earnings

Oct -23

Source: defenseworld.net

First Internet (INBK) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -22

Source: zacks.com

First Internet Bancorp (INBK) Reports Q3 Loss, Lags Revenue Estimates

Oct -22

Source: zacks.com

Parlay Finance and First Internet Bank Join Forces to Modernize SBA Lending

Oct -16

Source: prnewswire.com

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

C&F Financial

A-Score: 6.3/10

Value: 7.7

Growth: 4.7

Quality: 6.1

Yield: 6.0

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

Metropolitan Bank

A-Score: 5.8/10

Value: 7.6

Growth: 8.0

Quality: 6.5

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

AmeriServ Financial

A-Score: 5.5/10

Value: 6.6

Growth: 3.4

Quality: 4.1

Yield: 7.0

Momentum: 6.5

Volatility: 5.7

1-Year Total Return ->

Alerus Financial

A-Score: 5.5/10

Value: 5.9

Growth: 3.0

Quality: 5.8

Yield: 7.0

Momentum: 3.5

Volatility: 7.7

1-Year Total Return ->

William Penn

A-Score: 4.8/10

Value: 6.0

Growth: 4.3

Quality: 4.7

Yield: 1.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

First Internet

A-Score: 4.4/10

Value: 9.6

Growth: 6.7

Quality: 3.7

Yield: 2.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

7.21%

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. Bank's Q3 Earnings: A Mixed Bag

Segment Performance

Credit Outlook

Guidance and Valuation

Future Prospects

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

19.72$

Current Price

19.73$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA