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First Internet Bancorp Announces First Quarter 2011 Results

^{Published on 2011-05-13 07:30:45 - Market Wire}
 

INDIANAPOLIS--([ BUSINESS WIRE ])--First Internet Bancorp (OTCBB:FIBP), parent company of First Internet Bank of Indiana (aBanka), which has provided online retail and business banking services nationwide since 1999, today announced first quarter 2011 results. Following a record year in 2010 for earnings, net interest income and non-interest income, First Internet Bancorp (aBancorpa) reported first quarter 2011 net income of $532,342, or $0.28 per share. Total assets of $535.7 million were also reported, the highest since June 30, 2009.

"We view our steady growth in loans and deposits, both year-over-year and compared with year-end 2010 levels, as a very positive indication of our ability to leverage our capabilities and cost-effective infrastructure"

While the Bancorp reported first quarter 2010 net income of $2.3 million or $1.21 per share, the previous yeara™s results included a one-time $2.4 million reversal of a loan loss provision when a commercial credit was re-collateralized. The Bancorpa™s loan loss provision for the first quarter 2011 was $523,618 compared with $595,155 in first quarter 2010 without the one-time reversal.

"We started off 2011 with a strong capital position and a highly efficient, proven business model that drives operating efficiencies and profitability,a said David B. Becker, Chairman and CEO of First Internet Bancorp. aAlthough we continue to prudently set aside reserves for potential loan losses, the quality of our loan portfolio remains relatively stable. While many community banks are awash in commercial real estate loans, many of which are distressed, we focused on mortgage and consumer lending. Our portfolio is diverse, and we feel this helps mitigate risk in an uncertain, yet improving economic environment.

aWe are excited about generating new business through our upgraded and redesigned website, and believe consumers will increasingly seek out the cost-effective, high technology alternative we provide through our Internet-focused banking model as many banks search for new fees or increase existing fees to replace income sources no longer allowed by regulators.a

For the quarter ended March 31, 2011, the Bancorp reported net interest income of $3.4 million compared with $3.7 million in the prior yeara™s quarter. Non-interest income rose to $603,323 in first quarter 2011 compared with $542,074 in first quarter 2010, reflecting the strong credit and underwriting practices that have enabled the Bank to originate mortgages and profitably place them in the secondary market. Non-interest income varies quarterly based on the closing of loans sold in the secondary market.

Net interest margin was 3.0% at March 31, 2011, compared with 3.32% in first quarter 2010, impacted by an increase in non-accrual loans. Despite the increase, the Banka™s asset quality is still better than most of its community bank peers. Reserve balances as a percentage of total loans represented 2.05% at March 31, 2011, compared with 2.32% in first quarter 2010 and 2.20% at December 31, 2010.

The Bancorp grew total assets approximately 5% in first quarter 2011 compared with the prior yeara™s first quarter, reflecting loan growth to $324.8 million at March 31, 2011 compared with $313.1 million at March 31, 2010. Deposits increased to $439.2 million in first quarter 2011 compared with $412.8 million in first quarter 2010.

"We view our steady growth in loans and deposits, both year-over-year and compared with year-end 2010 levels, as a very positive indication of our ability to leverage our capabilities and cost-effective infrastructure,a noted Mr. Becker. aWe have managed our balance sheet strategically to conserve cash and generate income from investments as mortgage refinancing slowed toward the end of 2010 due to higher interest rates. Rates have declined slightly in 2011, and that has contributed to a recent uptick in our mortgage origination business this year.

aWe believe our straightforward, user-friendly mortgage lending model positions us to capture a growing share of new mortgage loan originations as the economy and housing market recover. Our competitors with brick and mortar banking facilities have higher costs. With customers looking for high service at a low cost, we are well positioned to deliver exceptional banking experiences.a The Bancorp anticipates improving consumer confidence and economic stability will support increased lending opportunities in the coming year, added Mr. Becker.

aWe have been conservative in our marketing and customer acquisition expenditures during the past two years, yet we added new business as a result of word-of-mouth and referrals from satisfied customers,a explained Mr. Becker. aEncouraged by the strengthening economy and continuing stability in our loan loss provision, we are selectively making investments, particularly in marketing, to drive growth.a

Non-interest expense, comprised primarily of compensation, data processing costs, occupancy and other operating expenses, increased slightly to $2.6 million at March 31, 2011, compared with $2.5 million in first quarter 2010, partially reflecting selected investments to maintain the Bancorpa™s leadership in Internet delivery of banking services. First Internet Bancorp is well-capitalized under regulatory risk-based capital guidelines, with a Tier 1 capital ratio of 11.17% and a Tier 1 leverage ratio of 9.16%.

Mr. Becker concluded, aWhile many banks continue to face serious challenges with asset quality and capital adequacy, we are well-positioned in 2011 to leverage our capital and capabilities to drive growth. We are also intently focused on increasing our net-interest margin and profitability. Through our asset and liability management initiatives, our mortgage loan origination activity, our recently formed commercial lending team, and our loan collection and recovery efforts, we are increasing value for shareholders and continue to build momentum with customers across the country.a

About First Internet Bancorp

First Internet Bancorp (OTC Bulletin Board: FIBP), the parent company of First Internet Bank of Indiana, is privately capitalized with over 240 private and corporate investors.The Bancorp became effective March 21, 2006.

About First Internet Bank

With over $500 million in assets, First Internet Bank of Indiana (First IB) is the first state-chartered, FDIC-insured institution to operate solely via the Internet and has customers in all 50 states. Deposit services include checking accounts, regular and money market savings accounts with industry-leading interest rates, CDs and IRAs. First IB also offers consumer loans, conforming mortgages, jumbo mortgages, home equity loans and lines of credit, and commercial loans. First IB is a wholly owned subsidiary of First Internet Bancorp.

Safe Harbor Statement

Statements in this press release which express abelief,a aintention,a aexpectation,a and similar expressions, identify forward-looking statements.Such forward-looking statements are based on the beliefs of the Bancorpa™s management, as well as assumptions made by, and information currently available to, such management.Such statements are inherently uncertain and there can be no assurance that the underlying assumptions will prove to be accurate.Actual results could differ materially from those contemplated by the forward-looking statements.Any forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

¹ Financial results for the Bancorp are audited by external accountants on an annual basis; however, external auditors are not engaged to review quarterly information.