inbk-20221019
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 19, 2022
First Internet Bancorp
(Exact Name of Registrant as Specified in Its Charter)
Indiana
(State or Other Jurisdiction of Incorporation)
001-3575020-3489991
(Commission File Number)(IRS Employer Identification No.)
8701 E. 116th Street46038
Fishers, Indiana
(Address of Principal Executive Offices)(Zip Code)
(317) 532-7900
(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

    ☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

    ☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolsName of each exchange on which registered
Common Stock, without par valueINBKThe Nasdaq Stock Market LLC
6.0% Fixed to Floating Subordinated Notes due 2029INBKZThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

                                    Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Item 2.02 Results of Operations and Financial Condition

On October 19, 2022, First Internet Bancorp (the "Company") issued a press release announcing its financial results for the quarter ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

On October 20, 2022 at 12:00 p.m. (Eastern Time), the Company will host a conference call and webcast to discuss its financial results for the quarter ended September 30, 2022. The electronic presentation slides, which will accompany the call and webcast, are furnished as Exhibit 99.2 and are incorporated by reference herein.

The information contained in this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing made by us under the Exchange Act or Securities Act of 1933, as amended, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such filing.


Item 9.01 Financial Statements and Exhibits
(d)    Exhibits
NumberDescriptionMethod of filing
Furnished electronically
Furnished electronically
104Cover Page Interactive Data File (embedded in the cover page formatted in inline XBRL)





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated:October 19, 2022
FIRST INTERNET BANCORP
By:/s/ Kenneth J. Lovik
Kenneth J. Lovik, Executive Vice President & Chief Financial Officer





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First Internet Bancorp Reports Third Quarter 2022 Results

Highlights for the third quarter include:

•Quarterly net income of $8.4 million, compared to $9.5 million for the second quarter of 2022 and $12.1 million for the third quarter of 2021

•Quarterly diluted earnings per share of $0.89, compared to $0.99 for the second quarter of 2022 and $1.21 for the third quarter of 2021

•Quarterly adjusted net income of $8.5 million, or $0.90 adjusted diluted earnings per share, when excluding nonrecurring expenses

•Loan growth of $173.8 million, a 5.6% increase from the second quarter of 2022 and a 10.9% increase from the third quarter of 2021

•Net interest margin of 2.40% and fully-taxable equivalent net interest margin of 2.53%

•Repurchased 120,000 shares at an average price of $36.56; aggregate purchase price under the authorized repurchase program has been increased to $35.0 million

Fishers, Indiana, October 19, 2022 – 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, 2022. Net income for the third quarter of 2022 was $8.4 million, or $0.89 diluted earnings per share. This compares to net income of $9.5 million, or $0.99 diluted earnings per share, for the second quarter of 2022, and net income of $12.1 million, or $1.21 diluted earnings per share, for the third quarter of 2021.

“Loan originations were up 47% over the prior quarter, demonstrating continued consumer and business confidence,” said David Becker, Chairman and Chief Executive Officer. “We continue to execute on our lending strategies, including our specialized areas of focus in commercial construction lending, SBA lending, franchise finance, and consumer lending. Given construction and SBA loans are typically variable rate products, and other fixed-rate product is coming on at higher rates, this growth sets the stage for future increases in average loan yields. We are taking a disciplined approach to capital deployment, maintaining our focus on the sound underwriting that has defined our bank for more than 20 years. Consequently, ongoing strong credit quality was a key contributor to our performance this quarter.

“We remain focused on our Fintech and Banking-as-a-Service initiatives as a way to grow lower cost deposit relationships and enhance noninterest income through payments processing. We have entered into agreements with two platforms and are piloting three Fintech partner programs.







Altogether, we believe this strategy will drive stronger earnings and profitability while advancing our position as a premier technology-forward digital financial services provider.”

Mr. Becker concluded, “We continue to execute our strategies to bolster resilience in our balance sheet and earnings profile. I thank the entire First Internet team for their dedication to this pursuit and for partnering with our customers for mutual success.”

Net Interest Income and Net Interest Margin
Net interest income for the third quarter of 2022 was $24.0 million, compared to $25.7 million for the second quarter of 2022, and $20.9 million for the third quarter of 2021. On a fully-taxable equivalent basis, net interest income for the third quarter of 2022 was $25.3 million, compared to $27.1 million for the second quarter of 2022, and up from $22.3 million for the third quarter of 2021.

Total interest income for the third quarter of 2022 was $39.1 million, an increase of 8.3% compared to the second quarter of 2022, and an increase of 18.4% compared to the third quarter of 2021. On a fully-taxable equivalent basis, total interest income for the third quarter of 2022 was $40.4 million, an increase of 7.7% compared to the second quarter of 2022, and an increase of 17.4% compared to the third quarter of 2021. The sequential increase was due primarily to growth in interest income earned on the commercial and consumer loan portfolios, the securities portfolio and other earning assets. The yield on average interest-earning assets for the third quarter of 2022 increased to 3.91% from 3.65% in the linked quarter due primarily to a 22 basis point (“bp”) increase in the yield earned on securities and a 167 bp increase in the yield earned on other earning assets. Compared to the linked quarter, average loan balances increased $163.7 million, or 5.5%, while the average balance of securities decreased $14.1 million, or 2.3%, and the average balance of other earning assets decreased $133.8 million, or 41.5%.

Interest income earned on commercial loans was positively impacted by higher rates in the variable rate small business lending, construction and commercial and industrial portfolios as well as strong growth in the franchise finance portfolio. This activity was partially offset by significantly lower prepayment fees in the healthcare finance and single tenant lease financing portfolios. In the consumer portfolio, interest income was up due to the combination of higher new origination yields and growth in the residential mortgage, trailers, RV and other consumer portfolios.

New funded portfolio origination yields increased 52 bps compared to the second quarter, and year-to-date 2022 have been approximately 87 bps higher than for the same period in 2021. Because of the fixed rate nature of certain larger portfolios, there is a lagging impact of the higher origination yields on the portfolio. Additionally, the yield earned on the loan portfolio was impacted by the timing of funded loans, as over 50% of total funded originations occurred during September.

The Federal Reserve has increased the federal funds (“Fed Funds”) target rate 300 bps year-to-date, with half of the increase coming in the third quarter. To date, the Company has modestly increased the rate paid on consumer, small business and commercial interest-bearing demand deposits. While money market deposit pricing was relatively rational during the second quarter, competition in both the digital banking space and local markets intensified, and deposit betas increased as a result. The cost of the Company’s BaaS brokered deposits, which is tied to Fed Funds, contributed to the overall increase in interest expense as well. Furthermore, the combination of higher interest rates and industry dynamics, including the outflow of deposits from the overall banking system, drove higher pricing in the wholesale deposit market.








The Company also increased its use of advances from the Federal Home Loan Bank to supplement growth and manage long term interest rate risk, borrowing $100.0 million of longer term advances. Total interest expense was impacted by the costs related to other borrowed funds as the rates on these advances, which are now well below market, contributed to higher total funding costs.

As a result, total interest expense for the third quarter of 2022 was $15.1 million, an increase of 44.9% compared to the second quarter of 2022, and an increase of 24.7% compared to the third quarter of 2021.

During the third quarter of 2022, the average balance of interest-bearing deposits decreased $57.1 million, or 1.9%, compared to the second quarter of 2022 while the cost of these deposits increased 56 bps. The decrease in average interest-bearing deposit balances was due to a decline in average certificates and brokered deposit balances, which decreased $66.8 million, or 6.0%, during the quarter while the cost of these deposits increased 31 bps. Additionally, the average balance of money market accounts decreased $57.9 million, or 4.1%, compared to the second quarter of 2022 while the cost of these deposits increased 79 bps. These declines were partially offset by an increase of $82.7 million, or 116.1%, in the average balance of BaaS – brokered deposits.

Net interest margin (“NIM”) was 2.40% for the third quarter of 2022, down from 2.60% for the second quarter of 2022 and up from 2.00% for the third quarter of 2021. Fully-taxable equivalent NIM (“FTE NIM”) was 2.53% for the third quarter of 2022, down from 2.74% for the second quarter of 2022 and up from 2.13% for the third quarter of 2021. The decrease in FTE NIM compared to the linked quarter was driven primarily by the effect of higher interest-bearing deposit costs, partially offset by higher yields on securities, other earning assets and higher average loan balances.

Noninterest Income
Noninterest income for the third quarter of 2022 was $4.3 million, stable with the second quarter of 2022, and down from $7.8 million for the third quarter of 2021. Gain on sale of loans totaled $2.7 million for the third quarter of 2022, up $0.8 million, or 39.0% from the linked quarter. Gain on sale revenue in the quarter consisted entirely of gain on the sales of U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans. The increase in revenue related to SBA loan sales was due to a higher volume of sales, partially offset by lower net gain on sale premiums. Mortgage banking revenue totaled $0.9 million for the third quarter of 2022, down $0.8 million, or 49.1%, from the linked quarter as the continued rise in interest rates negatively impacted interest rate lock and sold loan volume as well as gain on sale margins.

Noninterest Expense
Noninterest expense for the third quarter of 2022 was $18.0 million, stable with the second quarter of 2022 and up from $14.5 million for the third quarter of 2021. Consulting and professional fees and salaries and employee benefits declined from the linked quarter, while loan expenses and premises and equipment costs were higher. The decrease in consulting and professional fees was due primarily to the timing of third party loan review and stress testing. The lower salaries and employee benefits expense was due mainly to discretionary inflation bonuses paid to certain employees and accelerated equity compensation related to retirements in the second quarter and lower incentive compensation in the Company’s mortgage banking division, partially offset by increased headcount as well as higher incentive compensation in SBA and construction lending. The increase in loan expenses was driven primarily by higher servicing costs associated with the growth in our franchise finance loan portfolio as







well as risk management vendor costs. The increase in premises and equipment costs was impacted by a $125,000 write-down of software as well as costs related to the buildout of the Company’s small business banking platform.

Income Taxes
The Company reported an income tax expense of $1.0 million for the third quarter of 2022 and an effective tax rate of 10.5%, compared to an income tax expense of $1.3 million and an effective tax rate of 11.8% for the second quarter of 2022 and an income tax expense of $2.2 million and an effective tax rate of 15.5% for the third quarter of 2021. The lower effective tax rate reflects a higher proportion of tax exempt income relative to total pre-tax income.

Loans and Credit Quality
Total loans as of September 30, 2022 were $3.3 billion, an increase of $173.8 million, or 5.6%, compared to June 30, 2022, and an increase of $319.8 million, or 10.9%, compared to September 30, 2021. Total commercial loan balances were $2.5 billion as of September 30, 2022, an increase of $97.3 million, or 4.0%, compared to June 30, 2022 and an increase of $129.6 million, or 5.4%, compared to September 30, 2021. Compared to the linked quarter, the increase in commercial loan balances was driven primarily by growth in franchise finance, investor commercial real estate and single tenant lease financing loan balances. These items were partially offset by net payoffs in healthcare finance and commercial and industrial.

Total consumer loan balances were $672.2 million as of September 30, 2022, an increase of $78.2 million, or 13.2%, compared to June 30, 2022, and an increase of $197.1 million, or 41.5%, compared to September 30, 2021. The increase compared to the linked quarter was due to higher balances in the residential mortgage, recreational vehicles and trailers loan portfolios.

Total delinquencies 30 days or more past due were 0.06% of total loans as of September 30, 2022, consistent with both June 30, 2022 and September 30, 2021. Overall credit quality remained strong during the quarter as nonperforming loans to total loans was 0.18% as of September 30, 2022, compared to 0.15% at June 30, 2022 and 0.27% as of September 30, 2021. Nonperforming loans totaled $6.0 million at quarter end, up from $4.5 million at June 30, 2022.

The allowance for loan losses as a percentage of total loans was 0.92% as of September 30, 2022, both in total and when excluding PPP loans, compared to 0.95% in both categories as of June 30, 2022 and 0.95% and 0.96%, respectively, as of September 30, 2021. The decline in the allowance coverage ratio reflects growth in certain portfolios with lower coverage ratios as well as the continued decline in healthcare finance balances that have a higher coverage ratio.

Net charge-offs of $0.2 million were recognized during the third quarter of 2022, resulting in net charge-offs to average loans of 0.02%, compared to net charge-offs to average loans of 0.04% for the second quarter of 2022 and net charge-offs to average loans of 0.01% for the third quarter of 2021.

The provision for loan losses in the third quarter of 2022 was $0.9 million, compared to a provision of $1.2 million for the second quarter of 2022 and a credit for loan losses of $29,000 for the third quarter of 2021. The provision for the quarter was driven by the overall growth in the loan portfolio, partially offset by reductions in specific reserves as there were positive developments on certain monitored loans.








Capital
As of September 30, 2022, total shareholders’ equity was $360.9 million, a decrease of $4.5 million, or 1.2%, compared to June 30, 2022 and a decrease of $9.6 million, or 2.6%, compared to September 30, 2021. The decline in shareholders’ equity during the third quarter of 2022 was due primarily to an increase in accumulated other comprehensive loss resulting from a decline in the value of the available-for-sale securities portfolio caused by the continued rise in interest rates during the quarter and stock repurchase activity. This was partially offset by the net income earned during the quarter and an increase in the value of interest rate swaps classified as cash flow hedges. Book value per common share increased to $38.84 as of September 30, 2022, relatively stable with June 30, 2022 and up from $37.59 as of September 30, 2021. Tangible book value per share was $38.34, also relatively stable with June 30, 2022 and up from $37.12 as of September 30, 2021.

In connection with its previously announced stock repurchase program, which has been increased to a total aggregate purchase price of $35.0 million, the Company repurchased 120,000 shares of its common stock during the third quarter of 2022 at an average price of $36.56 per share. Including shares repurchased since the fourth quarter of 2021, the Company has repurchased $25.1 million of stock under the total upsized authorization of $35.0 million.

The following table presents the Company’s and the Bank’s regulatory and other capital ratios as of September 30, 2022.
As of September 30, 2022
CompanyBank
Total shareholders’ equity to assets 8.46%10.14%
Tangible common equity to tangible assets 1
8.36%10.04%
Tier 1 leverage ratio 2
9.49%11.22%
Common equity tier 1 capital ratio 2
11.72%13.87%
Tier 1 capital ratio 2
11.72%13.87%
Total risk-based capital ratio 2
15.73%14.77%
1 This information represents a non-GAAP financial measure. For a discussion of non-GAAP financial measures, see the section below entitled "Non-GAAP Financial Measures."
2 Regulatory capital ratios are preliminary pending filing of the Company's and the Bank's regulatory reports.

Conference Call and Webcast
The Company will host a conference call and webcast at 12:00 p.m. Eastern Time on Thursday, October 20, 2022 to discuss its quarterly financial results. The call can be accessed via telephone at (844) 200-6205; access code: 136923. A recorded replay can be accessed through November 19, 2022 by dialing (866) 813-9403; access code: 630846.

Additionally, interested parties can listen to a live webcast of the call on the Company's website at www.firstinternetbancorp.com. An archived version of the webcast will be available in the same location shortly after the live call has ended.

About First Internet Bancorp First Internet Bancorp is a financial holding company with assets of $4.3 billion as of September 30, 2022. The Company’s subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. The First Internet Bank provides consumer and small business deposit, SBA financing, franchise finance, residential mortgage loans, consumer loans, and specialty finance services nationally as well as commercial real estate loans, construction loans, 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, 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 “ahead,” “anticipate,” “believe,” “capitalize,” “confidence in,” “continue,” “could,” “designed,” “effort,” “estimate,” “expect,” “growth,” “help,” “hope,” “intend,” “looking forward,” “may,” “opportunities,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “waiting on,” “well-positioned,” “will,” “working on,” “would” 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: adverse public health developments on the economy, 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 we own or 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 real estate, commercial and industrial, public finance, SBA, and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; execution of pending and future acquisition, reorganization or disposition transactions, including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; fluctuations in interest rates; 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, adjusted total interest income - FTE, net interest income – FTE, adjusted net interest income, adjusted net interest income – FTE, net interest margin – FTE, adjusted net interest margin, adjusted net interest margin – FTE, provision (benefit) for loan losses, excluding tax refund advance loans, average loans, excluding tax refund advance loans, net (recoveries) charge-offs to average loans, excluding tax refund advance loans, allowance for loan losses to loans, excluding PPP loans, 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 effective income tax rate, income before income taxes, excluding tax refund advance loans, income tax provision, excluding tax refund advance loans and net income, excluding tax refund advance 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/AnalystsMedia
Paula DeemerNicole Lorch
Director of Corporate AdministrationPresident & Chief Operating Officer
(317) 428-4628(317) 532-7906
[email protected][email protected]







First Internet Bancorp
Summary Financial Information (unaudited)
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2022		June 30, 2022September 30,
2021		September 30,
2022		September 30,
2021
Net income$8,436 9,545 $12,090 $29,190 $35,636 
Per share and share information
Earnings per share - basic$0.89 $0.99 $1.22 $3.04 $3.59 
Earnings per share - diluted0.89 0.99 1.21 3.01 3.57 
Dividends declared per share0.06 0.06 0.06 0.18 0.18 
Book value per common share38.84 38.85 37.59 38.84 37.59 
Tangible book value per common share 1
38.34 38.35 37.12 38.34 37.12 
Common shares outstanding9,290,885 9,404,000 9,854,153 9,290,885 9,854,153 
Average common shares outstanding:
Basic9,458,259 9,600,383 9,936,237 9,615,039 9,922,877 
Diluted9,525,855 9,658,689 9,988,102 9,681,742 9,974,071 
Performance ratios
Return on average assets0.82 %0.93 %1.12 %0.94 %1.13 %
Return on average shareholders' equity9.01 %10.23 %13.10 %10.40 %13.54 %
Return on average tangible common equity 1
9.13 %10.36 %13.27 %10.53 %13.73 %
Net interest margin2.40 %2.60 %2.00 %2.52 %2.05 %
Net interest margin - FTE 1,2
2.53 %2.74 %2.13 %2.65 %2.19 %
Capital ratios 3
Total shareholders' equity to assets8.46 %8.91 %8.71 %8.46 %8.71 %
Tangible common equity to tangible assets 1
8.36 %8.81 %8.61 %8.36 %8.61 %
Tier 1 leverage ratio9.49 %9.45 %8.86 %9.49 %8.86 %
Common equity tier 1 capital ratio11.72 %12.46 %12.62 %11.72 %12.62 %
Tier 1 capital ratio11.72 %12.46 %12.62 %11.72 %12.62 %
Total risk-based capital ratio15.73 %16.74 %17.04 %15.73 %17.04 %
Asset quality
Nonperforming loans$6,006 $4,527 $7,851 $6,006 $7,851 
Nonperforming assets6,006 4,550 9,039 6,006 9,039 
Nonperforming loans to loans0.18 %0.15 %0.27 %0.18 %0.27 %
Nonperforming assets to total assets0.14 %0.11 %0.21 %0.14 %0.21 %
Allowance for loan losses to:
Loans0.92 %0.95 %0.95 %0.92 %0.95 %
Loans, excluding PPP loans 1
0.92 %0.95 %0.96 %0.92 %0.96 %
Nonperforming loans497.3 %644.0 %356.6 %497.3 %356.6 %
Net charge-offs to average loans0.02 %0.04 %0.01 %0.04 %0.12 %
Average balance sheet information
Loans$3,161,850 $2,998,144 $2,933,654 $3,036,532 $2,991,556 
Total securities606,329 620,396 713,342 624,995 612,755 
Other earning assets188,467 322,302 479,051 321,262 478,399 
Total interest-earning assets3,970,650 3,962,589 4,148,726 4,004,025 4,107,971 
Total assets4,105,688 4,097,865 4,265,189 4,138,866 4,215,479 
Noninterest-bearing deposits124,067 108,980 104,161 115,142 97,760 
Interest-bearing deposits2,961,327 3,018,422 3,137,728 3,016,652 3,121,039 
Total deposits3,085,394 3,127,402 3,241,889 3,131,794 3,218,799 
Shareholders' equity371,303 374,274 366,187 375,190 351,794 

1 Refer to "Non-GAAP Financial Measures" section above and "Reconciliation of Non-GAAP Financial Measures" below
2 On a fully-taxable equivalent (“FTE”) basis assuming a 21% tax rate
3 Regulatory capital ratios are preliminary pending filing of the Company's regulatory reports







First Internet Bancorp
Condensed Consolidated Balance Sheets (unaudited)
Dollar amounts in thousands
September 30,
2022		June 30,
2022		September 30,
2021
Assets
Cash and due from banks$14,743 $6,155 $4,932 
Interest-bearing deposits206,309 201,798 402,583 
Securities available-for-sale, at fair value393,565 425,489 634,007 
Securities held-to-maturity, at amortized cost191,057 185,113 62,129 
Loans held-for-sale23,103 31,580 43,970 
Loans3,255,906 3,082,127 2,936,148 
Allowance for loan losses(29,866)(29,153)(28,000)
Net loans3,226,040 3,052,974 2,908,148 
Accrued interest receivable16,918 17,466 14,866 
Federal Home Loan Bank of Indianapolis stock28,350 25,219 25,650 
Cash surrender value of bank-owned life insurance39,612 39,369 38,660 
Premises and equipment, net70,747 70,288 52,700 
Goodwill4,687 4,687 4,687 
Servicing asset5,795 5,345 4,412 
Other real estate owned— — 1,188 
Accrued income and other assets43,498 34,323 54,360 
Total assets$4,264,424 $4,099,806 $4,252,292 
Liabilities
Noninterest-bearing deposits$142,875 $126,153 $110,117 
Interest-bearing deposits3,049,769 3,025,948 3,114,478 
Total deposits3,192,644 3,152,101 3,224,595 
Advances from Federal Home Loan Bank589,926 464,925 514,920 
Subordinated debt104,456 104,381 104,156 
Accrued interest payable1,887 2,005 1,568 
Accrued expenses and other liabilities14,654 11,062 36,611 
Total liabilities3,903,567 3,734,474 3,881,850 
Shareholders' equity
Voting common stock200,123 204,071 223,059 
Retained earnings199,877 192,011 160,551 
Accumulated other comprehensive loss(39,143)(30,750)(13,168)
Total shareholders' equity360,857 365,332 370,442 
Total liabilities and shareholders' equity$4,264,424 $4,099,806 $4,252,292 







First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited)
Dollar amounts in thousands, except per share data
Three Months Ended Nine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Interest income
Loans$34,643 $32,415 $30,126 $100,246 $91,846 
Securities - taxable2,701 2,567 2,297 7,489 5,997 
Securities - non-taxable491 328 241 1,068 781 
Other earning assets1,264 796 370 2,436 1,067 
Total interest income39,099 36,106 33,034 111,239 99,691 
Interest expense
Deposits10,520 6,408 7,090 23,025 23,423 
Other borrowed funds4,585 4,018 5,025 12,790 13,217 
Total interest expense15,105 10,426 12,115 35,815 36,640 
Net interest income23,994 25,680 20,919 75,424 63,051 
Provision for loan losses892 1,185 (29)2,868 1,268 
Net interest income after provision
for loan losses		23,102 24,495 20,948 72,556 61,783 
Noninterest income
Service charges and fees248 281 276 845 822 
Loan servicing revenue653 620 511 1,858 1,390 
Loan servicing asset revaluation(333)(470)(274)(1,100)(669)
Mortgage banking activities871 1,710 3,850 4,454 12,274 
Gain on sale of loans2,713 1,952 2,719 8,510 7,461 
Gain on sale of premises and equipment— — — — 2,523 
Other164 221 731 883 1,349 
Total noninterest income4,316 4,314 7,813 15,450 25,150 
Noninterest expense
Salaries and employee benefits10,439 10,832 9,316 31,149 28,040 
Marketing, advertising and promotion1,041 920 813 2,717 2,365 
Consulting and professional fees790 1,197 728 3,912 2,792 
Data processing483 490 380 1,422 1,224 
Loan expenses1,142 693 383 3,417 1,458 
Premises and equipment2,808 2,419 1,687 7,767 4,875 
Deposit insurance premium229 287 230 797 930 
Other1,063 1,147 914 3,579 3,159 
Total noninterest expense17,995 17,985 14,451 54,760 44,843 
Income before income taxes9,423 10,824 14,310 33,246 42,090 
Income tax provision987 1,279 2,220 4,056 6,454 
Net income$8,436 $9,545 $12,090 $29,190 $35,636 
Per common share data
Earnings per share - basic$0.89 $0.99 $1.22 $3.04 $3.59 
Earnings per share - diluted$0.89 $0.99 $1.21 $3.01 $3.57 
Dividends declared per share$0.06 $0.06 $0.06 $0.18 $0.18 

All periods presented have been reclassified to conform to the current period classification







First Internet Bancorp
Average Balances and Rates (unaudited)
Dollar amounts in thousands
Three Months Ended
September 30, 2022June 30, 2022September 30, 2021
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,175,854 $34,643 4.33 %$3,019,891 $32,415 4.31 %$2,956,333 $30,126 4.04 %
Securities - taxable532,470 2,701 2.01 %543,422 2,567 1.89 %629,101 2,297 1.45 %
Securities - non-taxable73,859 491 2.64 %76,974 328 1.71 %84,241 241 1.14 %
Other earning assets188,467 1,264 2.66 %322,302 796 0.99 %479,051 370 0.31 %
Total interest-earning assets3,970,650 39,099 3.91 %3,962,589 36,106 3.65 %4,148,726 33,034 3.16 %
Allowance for loan losses(29,423)(28,599)(28,127)
Noninterest-earning assets164,461 163,875 144,590 
Total assets$4,105,688 $4,097,865 $4,265,189 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$342,116 $551 0.64 %$348,274 $466 0.54 %$198,637 $150 0.30 %
Savings accounts57,700 111 0.76 %66,657 68 0.41 %62,195 56 0.36 %
Money market accounts1,369,783 4,581 1.33 %1,427,665 1,921 0.54 %1,498,218 1,532 0.41 %
BaaS - brokered deposits153,936 859 2.21 %71,234 154 0.87 %— — 0.00 %
Certificates and brokered deposits1,037,792 4,418 1.69 %1,104,592 3,799 1.38 %1,378,678 5,352 1.54 %
Total interest-bearing deposits2,961,327 10,520 1.41 %3,018,422 6,408 0.85 %3,137,728 7,090 0.90 %
Other borrowed funds637,877 4,585 2.85 %583,553 4,018 2.76 %611,975 5,025 3.26 %
Total interest-bearing liabilities3,599,204 15,105 1.67 %3,601,975 10,426 1.16 %3,749,703 12,115 1.28 %
Noninterest-bearing deposits124,067 108,980 104,161 
Other noninterest-bearing liabilities11,114 12,636 45,138 
Total liabilities3,734,385 3,723,591 3,899,002 
Shareholders' equity371,303 374,274 366,187 
Total liabilities and shareholders' equity$4,105,688 $4,097,865 $4,265,189 
Net interest income$23,994 $25,680 $20,919 
Interest rate spread2.24 %2.49 %1.88 %
Net interest margin2.40 %2.60 %2.00 %
Net interest margin - FTE 2,3
2.53 %2.74 %2.13 %
1 Includes nonaccrual loans
2 On a fully-taxable equivalent (“FTE”) basis assuming a 21% tax rate
3 Refer to "Non-GAAP Financial Measures" section above and "Reconciliation of Non-GAAP Financial Measures" below







First Internet Bancorp
Average Balances and Rates (unaudited)
Dollar amounts in thousands
Nine Months Ended
September 30, 2022September 30, 2021
Average BalanceInterest / DividendsYield / CostAverage BalanceInterest / DividendsYield / Cost
Assets
Interest-earning assets
Loans, including loans held-for-sale 1
$3,057,768 $100,246 4.38 %$3,016,817 $91,846 4.07 %
Securities - taxable547,759 7,489 1.83 %527,625 5,997 1.52 %
Securities - non-taxable77,236 1,068 1.85 %85,130 781 1.23 %
Other earning assets321,262 2,436 1.01 %478,399 1,067 0.30 %
Total interest-earning assets4,004,025 111,239 3.71 %4,107,971 99,691 3.24 %
Allowance for loan losses(28,671)(29,446)
Noninterest-earning assets163,512 136,954 
Total assets$4,138,866 $4,215,479 
Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits$336,311 $1,429 0.57 %$190,785 $425 0.30 %
Savings accounts61,647 232 0.50 %54,740 145 0.35 %
Money market accounts1,416,984 8,006 0.76 %1,428,554 4,385 0.41 %
BaaS - brokered deposits79,613 1,019 1.71 %— — 0.00 %
Certificates and brokered deposits1,122,097 12,339 1.47 %1,446,960 18,468 1.71 %
Total interest-bearing deposits3,016,652 23,025 1.02 %3,121,039 23,423 1.00 %
Other borrowed funds613,609 12,790 2.79 %593,605 13,217 2.98 %
Total interest-bearing liabilities3,630,261 35,815 1.32 %3,714,644 36,640 1.32 %
Noninterest-bearing deposits115,142 97,760 
Other noninterest-bearing liabilities18,273 51,281 
Total liabilities3,763,676 3,863,685 
Shareholders' equity375,190 351,794 
Total liabilities and shareholders' equity$4,138,866 $4,215,479 
Net interest income$75,424 $63,051 
Interest rate spread2.39 %1.92 %
Net interest margin2.52 %2.05 %
Net interest margin - FTE 2,3
2.65 %2.19 %
1 Includes nonaccrual loans
2 On a fully-taxable equivalent (“FTE”) basis assuming a 21% tax rate
3 Refer to "Non-GAAP Financial Measures" section above and "Reconciliation of Non-GAAP Financial Measures" below







First Internet Bancorp
Loans and Deposits (unaudited)
Dollar amounts in thousands
September 30, 2022June 30, 2022September 30, 2021
AmountPercentAmountPercentAmountPercent
Commercial loans
Commercial and industrial$104,780 3.2 %$110,540 3.6 %$107,142 3.6 %
Owner-occupied commercial real estate58,615 1.8 %61,277 2.0 %84,819 2.9 %
Investor commercial real estate91,021 2.8 %52,648 1.7 %28,505 1.0 %
Construction139,509 4.3 %143,475 4.7 %115,414 3.9 %
Single tenant lease financing895,302 27.4 %867,181 28.1 %921,998 31.5 %
Public finance614,139 18.9 %613,759 19.9 %601,738 20.5 %
Healthcare finance293,686 9.0 %317,180 10.3 %417,388 14.2 %
Small business lending 113,001 3.5 %102,724 3.3 %102,889 3.5 %
Franchise finance225,012 6.8 %168,942 5.5 %25,598 0.9 %
Total commercial loans2,535,065 77.7 %2,437,726 79.1 %2,405,491 82.0 %
Consumer loans
Residential mortgage337,565 10.4 %281,124 9.1 %188,750 6.4 %
Home equity22,114 0.7 %19,928 0.6 %17,960 0.6 %
Trailers162,161 5.0 %154,555 5.0 %147,806 5.0 %
Recreational vehicles115,694 3.6 %105,876 3.4 %90,192 3.1 %
Other consumer loans34,657 1.1 %32,524 1.2 %30,398 1.0 %
Total consumer loans672,191 20.8 %594,007 19.3 %475,106 16.1 %
Net deferred loan fees, premiums, discounts and other 1
48,650 1.5 %50,394 1.6 %55,551 1.9 %
Total loans$3,255,906 100.0 %$3,082,127 100.0 %$2,936,148 100.0 %
September 30, 2022June 30, 2022September 30, 2021
AmountPercentAmountPercentAmountPercent
Deposits
Noninterest-bearing deposits$142,635 4.5 %$126,153 4.0 %$110,117 3.4 %
Interest-bearing demand deposits337,765 10.6 %350,551 11.1 %201,557 6.3 %
Savings accounts52,228 1.6 %65,365 2.1 %66,762 2.1 %
Money market accounts1,378,087 43.2 %1,363,424 43.3 %1,479,358 45.8 %
BaaS - brokered deposits96,287 3.0 %194,133 6.2 %— 0.0 %
Certificates of deposits773,040 24.2 %800,598 25.3 %1,043,898 32.4 %
Brokered deposits 412,602 12.9 %251,877 8.0 %322,903 10.0 %
Total deposits$3,192,644 100.0 %$3,152,101 100.0 %$3,224,595 100.0 %

1 Includes carrying value adjustments of $33.9 million, $35.4 million and 38.9 million related to terminated interest rate swaps associated with public finance loans as of September 30, 2022, June 30, 2022 and September 30, 2021, respectively.








First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Total equity - GAAP$360,857 $365,332 $370,442 $360,857 $370,442 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible common equity$356,170 $360,645 $365,755 $356,170 $365,755 
Total assets - GAAP$4,264,424 $4,099,806 $4,252,292 $4,264,424 $4,252,292 
Adjustments:
           Goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Tangible assets$4,259,737 $4,095,119 $4,247,605 $4,259,737 $4,247,605 
Common shares outstanding9,290,885 9,404,000 9,854,153 9,290,885 9,854,153 
Book value per common share$38.84 $38.85 $37.59 $38.84 $37.59 
Effect of goodwill(0.50)(0.50)(0.47)(0.50)(0.47)
Tangible book value per common share$38.34 $38.35 $37.12 $38.34 $37.12 
Total shareholders' equity to assets8.46 %8.91 %8.71 %8.46 %8.71 %
Effect of goodwill(0.10 %)(0.10 %)(0.10 %)(0.10 %)(0.10 %)
Tangible common equity to tangible assets8.36 %8.81 %8.61 %8.36 %8.61 %
Total average equity - GAAP$371,303 $374,274 $366,187 $375,190 $351,794 
Adjustments:
           Average goodwill(4,687)(4,687)(4,687)(4,687)(4,687)
Average tangible common equity$366,616 $369,587 $361,500 $370,503 $347,107 
Return on average shareholders' equity9.01 %10.23 %13.10 %10.40 %13.54 %
Effect of goodwill0.12 %0.13 %0.17 %0.13 %0.19 %
Return on average tangible common equity9.13 %10.36 %13.27 %10.53 %13.73 %
Total interest income$39,099 $36,106 $33,034 $111,239 $99,691 
Adjustments:
Fully-taxable equivalent adjustments 1
1,280 1,377 1,356 3,971 4,105 
Total interest income - FTE$40,379 $37,483 $34,390 $115,210 $103,796 
Total interest income - FTE$40,379 $37,483 $34,390 $115,210 $103,796 
Adjustments:
          Income from tax refund advance loans— (149)— (3,013)— 
Adjusted total interest income - FTE$40,379 $37,334 $34,390 $112,197 $103,796 
Net interest income$23,994 $25,680 $20,919 $75,424 $63,051 
Adjustments:
Fully-taxable equivalent adjustments 1
1,280 1,377 1,356 3,971 4,105 
Net interest income - FTE$25,274 $27,057 $22,275 $79,395 $67,156 
Net interest income$23,994 $25,680 $20,919 $75,424 $63,051 
Adjustments:
Subordinated debt redemption cost— — 810 — 810 
Income from tax refund advance loans— (149)— (3,013)— 
Adjusted net interest income$23,994 $25,531 $21,729 $72,411 $63,861 
Net interest income$23,994 $25,680 $20,919 $75,424 $63,051 
Adjustments:
Fully-taxable equivalent adjustments 1
1,280 1,377 1,356 3,971 4,105 
Subordinated debt redemption cost— — 810 — 810 
Income from tax refund advance loans— (149)— (3,013)— 
Adjusted net interest income - FTE$25,274 $26,908 $23,085 $76,382 $67,966 
1 Assuming a 21% tax rate







First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Net interest margin2.40 %2.60 %2.00 %2.52 %2.05 %
Effect of fully-taxable equivalent adjustments 1
0.13 %0.14 %0.13 %0.13 %0.14 %
Net interest margin - FTE2.53 %2.74 %2.13 %2.65 %2.19 %
Net interest margin2.40 %2.60 %2.00 %2.52 %2.05 %
Effect of subordinated debt redemption cost0.00 %0.00 %0.08 %0.00 %0.02 %
Effect of income from tax refund advance loans0.00 %(0.02 %)0.00 %(0.10 %)0.00 %
Adjusted net interest margin2.40 %2.58 %2.08 %2.42 %2.07 %
Net interest margin2.40 %2.60 %2.00 %2.52 %2.05 %
Effect of fully-taxable equivalent adjustments 1
0.13 %0.14 %0.13 %0.13 %0.14 %
Effect of subordinated debt redemption cost0.00 %0.00 %0.08 %0.00 %0.02 %
Effect of income from tax refund advance loans0.00 %(0.02 %)0.00 %(0.10 %)0.00 %
Adjusted net interest margin - FTE2.53 %2.72 %2.21 %2.55 %2.21 %
Provision for loan losses$892 $1,185 $(29)$2,868 $1,268 
Adjustments:
    Provision for tax refund advance loans losses— (18)— (1,860)— 
Provision (benefit) for loan losses, excluding tax refund advance loans$892 $1,167 $(29)$1,008 $1,268 
Average loans$3,161,850 $2,998,144 $2,933,654 $3,036,532 $2,991,556 
Adjustments:
    Average tax refund advance loans— (3,185)— (20,996)— 
Average loans, excluding tax refund advance loans$3,161,850 $2,994,959 $2,933,654 $3,015,536 $2,991,556 
Net charge-offs to average loans0.02 %0.04 %0.01 %0.04 %0.12 %
Adjustments:
Effect of tax refund advance lending net charge-offs to average loans0.00 %(0.05 %)0.00 %(0.08 %)0.00 %
Net (recoveries) charge-offs to average loans, excluding tax refund advance loans0.02 %(0.01 %)0.01 %(0.04 %)0.12 %
Allowance for loan losses$29,866 $29,153 $28,000 $29,866 $28,000 
Loans$3,255,906 $3,082,127 $2,936,148 $3,255,906 $2,936,148 
Adjustments:
     PPP loans— (194)(14,981)— (14,981)
Loans, excluding PPP loans$3,255,906 $3,081,933 $2,921,167 $3,255,906 $2,921,167 
Allowance for loan losses to loans0.92 %0.95 %0.95 %0.92 %0.95 %
Effect of PPP loans0.00 %0.00 %0.01 %0.00 %0.01 %
Allowance for loan losses to loans, excluding PPP loans0.92 %0.95 %0.96 %0.92 %0.96 %
1Assuming a 21% tax rate







First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Noninterest expense - GAAP$17,995 $17,985 $14,451 $54,760 $44,843 
Adjustments:
     Acquisition-related expenses— (103)— (273)— 
     Write-down of software(125)— — (125)— 
     Nonrecurring consulting fee— — — (875)— 
     Discretionary inflation bonus— (531)— (531)— 
     Accelerated equity compensation— (289)— (289)— 
Adjusted noninterest expense$17,870 $17,062 $14,451 $52,667 $44,843 
Income before income taxes - GAAP$9,423 $10,824 $14,310 $33,246 $42,090 
Adjustments:
     Gain on sale of premises and equipment— — — — (2,523)
     Acquisition-related expenses— 103 — 273 — 
     Write-down of software125 — — 125 — 
     Subordinated debt redemption cost— — 810 — 810 
     Nonrecurring consulting fee— — — 875 — 
     Discretionary inflation bonus— 531 — 531 — 
     Accelerated equity compensation— 289 — 289 — 
Adjusted income before income taxes$9,548 $11,747 $15,120 $35,339 $40,377 
Income tax provision - GAAP$987 $1,279 $2,220 $4,056 $6,454 
Adjustments:1
    Gain on sale of premises and equipment— — — — (530)
    Acquisition-related expenses— 21 — 57 — 
    Write-down of software26 — — 26 — 
    Subordinated debt redemption cost— — 170 — 170 
    Nonrecurring consulting fee— — — 184 — 
    Discretionary inflation bonus— 112 — 112 — 
    Accelerated equity compensation— 61 — 61 — 
Adjusted income tax provision$1,013 $1,473 $2,390 $4,496 $6,094 
Net income - GAAP$8,436 $9,545 $12,090 $29,190 $35,636 
Adjustments:
    Gain on sale of premises and equipment— — — — (1,993)
    Acquisition-related expenses— 82 — 216 — 
    Write-down of software99 — — 99 — 
    Subordinated debt redemption cost— — 640 — 640 
    Nonrecurring consulting fee— — — 691 — 
    Discretionary inflation bonus— 419 — 419 — 
    Accelerated equity compensation— 228 — 228 — 
Adjusted net income$8,535 $10,274 $12,730 $30,843 $34,283 
Diluted average common shares outstanding9,525,855 9,658,689 9,988,102 9,681,742 9,974,071 
Diluted earnings per share - GAAP$0.89 $0.99 $1.21 $3.01 $3.57 
Adjustments:
    Effect of gain on sale of premises and equipment— — — — (0.19)
    Effect of acquisition-related expenses— 0.01 — 0.02 — 
    Effect of write-down of software0.01 — — 0.01 — 
    Effect of nonrecurring consulting fee— — — 0.07 — 
    Effect of subordinated debt redemption cost— — 0.06 — 0.06 
    Effect of discretionary inflation bonus— 0.04 — 0.04 — 
    Effect of accelerated equity compensation— 0.02 — 0.02 — 
Adjusted diluted earnings per share$0.90 $1.06 $1.27 $3.17 $3.44 







First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Return on average assets0.82 %0.93 %1.12 %0.94 %1.13 %
    Effect of gain on sale of premises and equipment0.00 %0.00 %0.00 %0.00 %(0.06 %)
    Effect of acquisition-related expenses0.00 %0.01 %0.00 %0.01 %0.00 %
    Effect of write-down of software0.01 %0.00 %0.00 %0.00 %0.00 %
    Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.02 %0.00 %
    Effect of subordinated debt redemption cost0.00 %0.00 %0.06 %0.00 %0.02 %
    Effect of discretionary inflation bonus0.00 %0.04 %0.00 %0.01 %0.00 %
    Effect of accelerated equity compensation0.00 %0.02 %0.00 %0.01 %0.00 %
Adjusted return on average assets0.83 %1.00 %1.18 %0.99 %1.09 %
Return on average shareholders' equity9.01 %10.23 %13.10 %10.40 %13.54 %
    Effect of gain on sale of premises and equipment0.00 %0.00 %0.00 %0.00 %(0.75 %)
    Effect of acquisition-related expenses0.00 %0.09 %0.00 %0.08 %0.00 %
    Effect of write-down of software0.11 %0.00 %0.00 %0.04 %0.00 %
    Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.25 %0.00 %
    Effect of subordinated debt redemption cost0.00 %0.00 %0.69 %0.00 %0.24 %
    Effect of discretionary inflation bonus0.00 %0.45 %0.00 %0.15 %0.00 %
    Effect of accelerated equity compensation0.00 %0.24 %0.00 %0.08 %0.00 %
Adjusted return on average shareholders' equity9.12 %11.01 %13.79 %11.00 %13.03 %
Return on average tangible common equity9.13 %10.36 %13.27 %10.53 %13.73 %
    Effect of gain on sale of premises and equipment0.00 %0.00 %0.00 %0.00 %(0.77 %)
    Effect of acquisition-related expenses0.00 %0.09 %0.00 %0.08 %0.00 %
    Effect of write-down of software0.11 %0.00 %0.00 %0.04 %0.00 %
    Effect of nonrecurring consulting fee0.00 %0.00 %0.00 %0.25 %0.00 %
    Effect of subordinated debt redemption cost0.00 %0.00 %0.70 %0.00 %0.25 %
    Effect of discretionary inflation bonus0.00 %0.45 %0.00 %0.15 %0.00 %
    Effect of accelerated equity compensation0.00 %0.25 %0.00 %0.08 %0.00 %
Adjusted return on average tangible common equity9.24 %11.15 %13.97 %11.13 %13.21 %
Effective income tax rate10.5 %11.8 %15.5 %12.2 %15.3 %
    Effect of gain on sale of premises and equipment0.0 %0.0 %0.0 %0.0 %(0.6 %)
    Effect of acquisition-related expenses0.0 %0.2 %0.0 %0.2 %0.0 %
    Effect of write-down of software0.3 %0.0 %0.0 %0.1 %0.0 %
    Effect of nonrecurring consulting fee0.0 %0.0 %0.0 %0.5 %0.0 %
    Effect of subordinated debt redemption cost0.0 %0.0 %0.3 %0.0 %0.4 %
    Effect of discretionary inflation bonus0.0 %1.0 %0.0 %0.3 %0.0 %
    Effect of accelerated equity compensation0.0 %0.6 %0.0 %0.2 %0.0 %
Adjusted effective income tax rate10.8 %13.6 %15.8 %13.5 %15.1 %
Income before income taxes - GAAP$9,423 $10,824 $14,310 $33,246 $42,090 
Adjustments:
    Income from tax refund advance lending— (149)— (3,013)— 
    Provision for tax refund advance lending losses— 18 — 1,860 — 
    Tax refund advance lending servicing fee— 9 — 930 — 
Income before income taxes, excluding tax refund advance loans$9,423 $10,702 $14,310 $33,023 $42,090 
Income tax provision - GAAP$987 $1,279 $2,220 $4,056 $6,454 
Adjustments:1
    Income from tax refund advance lending— (31)— (633)— 
    Provision for tax refund advance lending losses— 4 — 391 — 
    Tax refund advance lending servicing fee— 2 — 195 — 
Income tax provision, excluding tax refund advance loans$987 $1,254 $2,220 $4,009 $6,454 







First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data
Three Months EndedNine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Net Income - GAAP$8,436 $9,545 $12,090 $29,190 $35,636 
Adjustments:
    Income from tax refund advance lending— (118)— (2,380)— 
    Provision for tax refund advance lending losses— 14 — 1,469 — 
    Tax refund advance lending servicing fee— 7 — 735 — 
Net income, excluding tax refund advance loans$8,436 $9,448 $12,090 $29,014 $35,636 
1Assuming a 21% tax rate






Financial Results Third Quarter 2022 Exhibit 99.2

 
Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements, 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 “ahead,” “anticipate,” “believe,” “capitalize,” “confidence in,” “continue,” “could,” “designed,” “effort,” “estimate,” “expect,” “growth,” “help,” “hope,” “intend,” “looking forward,” “may,” “opportunities,” “optimistic,” “pending,” “plan,” “position,” “preliminary,” “remain,” “should,” “waiting on,” “well-positioned,” “will,” “working on,” “would” 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: the effects of adverse public health developments on the economy, 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 we own or 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 real estate, commercial and industrial, public finance, SBA and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; execution of pending and future acquisition, reorganization or disposition transactions, including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; fluctuations in interest rates; 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 presentation, 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. This presentation 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, adjusted total interest income – FTE, net interest income – FTE, adjusted net interest income, adjusted net interest income – FTE, net interest margin – FTE, adjusted net interest margin, adjusted net interest margin – FTE, provision (benefit) for loan losses, excluding tax refund advance loans, average loans, excluding tax refund advance loans, net charge-offs (recoveries) to average loans, excluding tax refund advance loans, allowance for loan losses to loans, excluding PPP loans, adjusted noninterest expense, adjusted noninterest expense to average assets, 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 effective income tax rate, income before income taxes, excluding tax refund advance loans, income tax provision, excluding tax refund advance loans and net income, excluding tax refund advance 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 presentation under the caption “Reconciliation of Non-GAAP Financial Measures.” 2

 
Third Quarter 2022 Highlights 3 Loans and Deposits  Total portfolio loan balances grew by 5.6% from 2Q22  Growth in franchise finance, single tenant lease financing, SBA and consumer  Total non-maturity deposit balances decreased 4.4% from 2Q22 while CD and brokered deposit balances increased 12.7% Profitability and Capital  ROAA of 0.82%, ROAE of 9.01% and ROATCE of 9.13%1  Adjusted ROAA of 0.83%1, adj. ROAE of 9.12%1 and adj. ROATCE of 9.24%1  TCE / TA of 8.36%1, TBV per share remained stable at $38.34  Repurchased 120,000 common shares under authorized repurchase program Key Operating Trends  NIM of 2.40% and FTE NIM of 2.53%1  Cost of interest-bearing deposits increased 56 bps from 2Q22 to 1.41%  SBA loan sales contributed $2.7 million of fee revenue  Asset quality remained strong with NPAs to total assets of 0.14% Earnings  Diluted EPS of $0.89; adjusted diluted EPS of $0.901  Net income of $8.4 million; adjusted net income of $8.5 million1  Total revenue of $28.3 million 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix

 
Loan Portfolio Overview  Total loan portfolio balances increased 5.6% from 2Q22 and 10.9% from 3Q21  Commercial loan balances increased $97.3 million, or 4.0%, compared to 2Q22 – Solid growth in franchise finance, single tenant lease financing and small business lending  Consumer loan balances increased $78.2 million, or 13.2%, compared to 2Q22 – Driven by growth in residential mortgage balances, recreational vehicles and trailers  3Q22 funded portfolio loan origination yields were up 52 bps from 2Q22 4 Loan Portfolio Mix1 1 Percentages may not add up to 100% due to rounding 2 Includes commercial and industrial and owner-occupied commercial real estate balances Dollars in millions 2 11% 10% 10% 10% 9% 10% 16% 16% 11% 8% 7% 11%3% 7%1% 2% 4% 4% 4% 2% 4% 11% 17% 13% 9% 22% 26% 24% 20% 21% 19% 38% 34% 34% 31% 30% 28% 2% 2% 2% 4% 6% 7% 9% 7% 6% 6% 6% 5% $2,091.0 $2,716.2 $2,963.5 $3,059.2 $2,887.7 $3,255.9 2017 2018 2019 2020 2021 3Q22 Commercial and Industrial Construction and Investor CRE Single Tenant Lease Financing Public Finance Healthcare Finance Small Business Lending Franchise Finance Residential Mortgage/HE/HELOCs Consumer

 
Deposit Composition 5 Total Non-Maturity Deposits - $2.0B as of 9/30/222 Dollars in millions Total Deposits - $3.2B as of 9/30/22 Dollars in millions  Total deposits increased $40.5 million, or 1.3%, compared to 2Q22, and declined 1.0% from 3Q21  Non-maturity deposits decreased $92.6 million, or 4.4%, compared to 2Q22  CD and brokered deposit balances increased $133.2 million, or 12.7%, compared to 2Q22  Cost of interest-bearing deposits increased 56 bps from 2Q22 to 1.41%, driven by the rapid rise in interest rates and heightened competition $142.6 4% $337.8 11% $52.2 2%$501.5 16%$876.6 27% $96.3 3% $1,185.6 37% Noninterest-bearing deposits Interest-bearing demand deposits Savings accounts Money market - Consumer Money market - SMB/Commercial BaaS deposits Certificates and brokered deposits $319.6 16% $176.5 9% $747.3 37% $667.6 33% $96.3 5% Commercial Public funds Small business Consumer BaaS 1 Money market – SMB/Commercial includes small business, commercial, CRE and public institutions 2 Total non-maturity deposits excludes CD and brokered non-maturity deposits and includes approximately $100 million of interest-bearing demand deposits that have a contractual term of five years 1

 
Net Interest Income and Net Interest Margin  Net interest income on a GAAP and FTE basis were both down 6.6% from 2Q22  Strong loan growth was offset by higher funding costs  Loan portfolio yield impacted by lower prepayment fees as well as loan beta lag effect on fixed rate portfolios  Increase in funding costs reflect increased competition and higher wholesale funding rates 6 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix 2 3Q21 FTE Net Interest Income and FTE NIM exclude the impact of $0.8 million in subordinated debt redemption costs Yield on Loans and Cost of Interest-Bearing Deposits Net Interest Margin – GAAP and FTE1 4.04% 4.26% 4.52% 4.31% 4.33% 0.90% 0.84% 0.81% 0.85% 1.41% 3Q21 4Q21 1Q22 2Q22 3Q22 Yield on loans Cost of interest-bearing deposits $20.9 $23.5 $25.8 $25.7 $24.0 $23.1 $24.9 $27.1 $27.1 $25.3 3Q21 4Q21 1Q22 2Q22 3Q22 GAAP FTE 2.00% 2.30% 2.56% 2.60% 2.40% 2.21% 2.43% 2.69% 2.74% 2.53% 3Q21 4Q21 1Q22 2Q22 3Q22 GAAP FTE Net Interest Income – GAAP and FTE1 Dollars in millions 2 2

 
Net Interest Margin Drivers 7 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix Net Interest Margin – FTE1 Linked-Quarter Change Monthly Rate Paid on Int. Bearing Deposits vs. Fed Funds  Linked-quarter FTE NIM decreased 21 bps, due primarily to higher deposit costs and lower prepayment fees, partially offset by higher earning asset yields – Higher new loan origination yields offset by lower prepayment fees, timing of fundings and loan mix – Other earning assets and securities yields increased 167 and 22 bps, respectively, from 2Q22  Deposit costs increased 56 bps from 2Q22 to 1.41% for 3Q22 – Rate increases combined with heightened competition in digital and local markets drove deposit betas higher than 2Q22 experience – Cost of money market accounts increased 79 bps during the quarter – Industry dynamics also drove higher pricing in wholesale deposit markets 0.80% 0.82% 0.80% 0.79% 0.80% 0.96% 1.14% 1.41% 1.70% 0.08% 0.08% 0.33% 0.33% 0.83% 1.58% 2.32% 2.33% 3.08% Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Int. Bearing Deposits Fed Funds Effective +17 bps +3 bps -44 bps 2.74% 2.53% +3 bps

 
Noninterest Income 8 Dollars in millions Noninterest Income 3Q22 Dollars in millions Noninterest Income  Noninterest income of $4.3 million, consistent with 2Q22 and compared to $7.8 million in 3Q21  Gain on sale of loans of $2.7 million, compared to $2.0 million in 2Q22 and $2.7 million in 3Q21 – SBA loan sale volume increased 34.7% compared to 2Q22; partially offset by lower net gain on sale premiums  Mortgage banking revenue of $0.9 million, compared to $1.7 million in 2Q22 – Interest rate lock and sold loan volumes significantly impacted by the rise in interest rates $0.2 $0.3 $2.7 $0.9 $0.2 Service charges and fees Net loan servicing revenue Gain on sale of loans Mortgage banking activities Other $7.8 $7.7 $6.8 $4.3 $4.3 3Q21 4Q21 1Q22 2Q22 3Q22

 
Noninterest Expense  Noninterest expense of $18.0 million, consistent with 2Q22 – Lower salaries and employee benefits due to $0.8 million of nonrecurring items incurred in 2Q22 – Professional fees lower due mainly to timing of third party loan review and stress testing – Higher loan expenses related to growth in franchise finance lending – Higher premises and equipment expenses impacted by a $0.1 million write-down of software  Noninterest expense / average assets remained well below the industry average 9 1 4Q21 noninterest expense includes a $0.5 million IT contract termination fee and $0.2 million of acquisition-related expenses; see Reconciliation of Non-GAAP Financial Measures in the Appendix 2 1Q22 noninterest expense includes $0.9 million of nonrecurring consulting fees and $0.2 million of acquisition-related expenses 3 2Q22 noninterest expense includes a $0.5 million discretionary inflation bonus, $0.3 million of accelerated equity compensation and $0.1 million of acquisition-related expenses 4 3Q22 noninterest expense includes a $0.1 million write-down of software Dollars in millions Noninterest Expense Noninterest Expense / Average Assets 1.73%1.71% 1.55% 1.34% 1.61% 1.81% 1.76% 1.74% 3Q21 4Q21 1Q22 2Q22 3Q22 Core Non-core items 3 1 1.67%1.71% 1.55% 2 $14.5 $17.0 $18.8 $18.0 $18.0 3Q21 4Q21 1Q22 2Q22 3Q22 Core Non-core items $16.3 $17.7 $17.1 $17.9 1 2 3 4 4 1.73%

 
Asset Quality  Allowance for loan losses to total loans of 0.92% in 3Q22, compared to 0.95% in both 2Q22 and 3Q21  Quarterly provision for loan losses was $0.9 million, compared to $1.2 million in 2Q22 and a benefit of $29,000 in 3Q21  Net charge-offs to average loans of 0.02%, compared to 0.04% in 2Q22 – 2Q22 included $0.4 million of net charge-off related to tax refund advance loans1  Nonperforming loans increased $1.5 million from 2Q22 due mainly to SBA loans placed on nonaccrual during the quarter  Delinquencies 30 days or more past due of 0.06%, consistent with 2Q22 10 0.27% 0.26% 0.25% 0.15% 0.18% 3Q21 4Q21 1Q22 2Q22 3Q22 0.21% 0.20% 0.17% 0.11% 0.14% 3Q21 4Q21 1Q22 2Q22 3Q22 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix 2 1Q22 net charge-offs includes a 0.21% impact related to net charge-offs of tax refund advance loans; see Reconciliation of Non-GAAP Financial Measures in the Appendix 3 2Q22 net charge-offs includes a 0.05% impact related to net charge-offs of tax refund advance loans; see Reconciliation of Non-GAAP Financial Measures in the Appendix NPLs / Total Loans NPAs / Total Assets Net Charge-Offs (Recoveries) / Avg. Loans 0.01% -0.01% 0.05% 0.04% 0.02% 3Q21 4Q21 1Q22 2Q22 3Q22 2 3

 
Capital  Tangible common equity to tangible assets decreased 45 bps to 8.36%1 from 2Q22  Tangible book value per share of $38.34, stable with 2Q221 and up 3.3% from 3Q211  Repurchased 120,000 shares at an average price per share of $36.56 during 3Q22  Aggregate purchase price under the authorized program has been increased to $35.0 million; to date the Company has repurchased $25.1 million 11 1 See Reconciliation of Non-GAAP Financial Measures in the Appendix 2 Regulatory capital ratios are preliminary pending filing of the Company’s and Bank’s regulatory reports Company Bank Total shareholders' equity to assets 8.46% 10.14% Tangible common equity to tangible assets1 8.36% 10.04% Tier 1 leverage ratio 9.49% 11.22% Common equity tier 1 capital ratio 11.72% 13.87% Tier 1 capital ratio 11.72% 13.87% Total risk-based capital ratio 15.73% 14.77% $22.24 $23.04 $26.09 $27.93 $30.82 $33.29 $38.51 $38.34 2015 2016 2017 2018 2019 2020 2021 3Q22 Tangible Book Value Per Share1 Regulatory Capital Ratios – September 30, 20222

 
20% 19% 18% 9% 7% 27% Retail Trade Accommodation and Food Services Services Manufacturing Construction Other 16% 14% 13% 11% 9% 8% 29% IN MI IL TX CA FL Other Small Business Lending  $113.0 million in balances as of September 30, 2022  There are no loans remaining under the Paycheck Protection Program – $0.2 million of PPP loans forgiven during 3Q22  Continue to build the SBA sales, credit and operations teams in place to support expanded loan production 1312 1 Excludes PPP loans Managed SBA 7(a) Loans1 Portfolio Mix by State Portfolio Mix by Major Industry

 
18% 13% 12% 5%4%4%4% 40% TX CA MI GA IL NC PA Other Franchise Finance  $225.0 million in balances as of September 30, 2022  Focused on providing growth financing to franchisees in a variety of industry segments  Strong historical credit performance to date  Average loan size of $1.0 million 13 Portfolio Mix by Borrower Use Portfolio Mix by State Portfolio Mix by Brand 28% 18% 15% 13% 11% 4% 11% Indoor Recreation Beauty Salons Limited-Service Restaurants Fitness and Recreational Sports Centers Full-Service Restaurants Other Personal Care Services Other 21% 11% 11% 7%5%4% 41% Urban Air Adventure Park My Salon Suite Scooter's Coffee Goldfish Swim School Crunch Fitness F45 Training Other 131

 
36% 19% 12% 12% 9% 9% 3% Land Subdivision Hotels (except Casino Hotels) and Motels Lessors of Residential Buildings and Dwellings Lessors of Nonresidential Buildings (except Miniwarehouses) Lessors of Miniwarehouses and Self-Storage Units Continuing Care Retirement Communities Other 80% 16% 4% IN AZ OH 42% 35% 23% Commercial Construction/ Development Investor Commercial Real Estate Residential Construction/ Development Construction and Investor Commercial Real Estate  $230.5 million in combined balances as of September 30, 2022  Average current loan balance of $4.3 million for investor CRE  Average commitment sizes for construction – Commercial construction/development: $11.3 million – Residential construction/development: $1.1 million 14 Portfolio by Loan Type Portfolio Mix by State Portfolio Mix by Major Industry  Unfunded commitments as of September 30, 2022, up significantly from 2Q22 – Commercial construction/development: $287.2 million – Residential construction/development: $79.4 million

 
Single Tenant Lease Financing  $895.3 million in balances as of September 30, 2022  Long-term financing of single tenant properties occupied by historically strong national and regional tenants  Weighted-average portfolio LTV of 47%  Average loan size of $1.3 million 15 Portfolio Mix by Major Vertical Portfolio Mix by Major Tenant Portfolio Mix by Geography  Strong historical credit performance  No delinquencies in this portfolio 28% 20% 20% 11% 6% 6% 6% 3% Quick Service Restaurants Full Service Restaurants Auto Parts/ Repair/Car Wash Convenience/Fuel Pharmacies Dollar Stores Specialty Retailers Other 7% 5% 5% 4% 4% 4% 3% 3% 2% 2% 61% Burger King Wendy's Red Lobster Caliber Collision Dollar General Bob Evans Walgreens Tidal Wave CVS Taco Bell Other 11% 24% 21% 39% 5%

 
4% 4% 6% 4% 20% 6% 6% 3%1% 1% 3% 42% AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 A-/A3 BBB+/Baa1 BBB/Baa2 BB+/Ba1 BB/Ba2 Non-Rated 31% 13% 13% 9% 9% 6% 5% 3% 2%2% 7% General Obligation Essential use equipment loans Lease rental revenue Utilities Revenue Short term cash flow fin (BAN) - G.O. Public higher ed facilities - Revenue Tax Incremental Financing (TIF) districts Sales tax, food and bev tax, hotel tax Income Tax supported loans Municipally owned health care facilities Other 56% 6% 5% 5% 4% 3% 3% 3% 15% IN OK NJ IA OH MO MI GA Other Public Finance  $614.1 million in balances as of September 30, 2022  Provides a range of credit solutions for government and not-for-profit entities  Borrowers’ needs include short-term financing, debt refinancing, infrastructure improvements, economic development and equipment financing 16  No delinquencies or losses since inception Portfolio Mix by Repayment Source Borrower Mix by Credit Rating Portfolio Mix by State

 
87% 9% 4% Dentists Veterinarians Other79% 16% 4% 1% Practice Refi or Acquisition Owner Occupied CRE Project Equipment and Other Healthcare Finance  $293.7 million in balances as of September 30, 2022  Loan portfolio focused primarily on dental practices with some exposure to veterinary practices and other specialties  Borrowers’ needs include practice finance or acquisition, acquiring or refinancing owner-occupied CRE, equipment purchases and project loans  Average loan size of $519,000  No delinquencies in this portfolio 17 Portfolio Mix by Borrower Use Portfolio Mix by Borrower Portfolio Mix by State 17 30% 11% 5% 4%4% 3% 3% 40% CA TX FL NY AZ WA NJ Other

 
23% 19% 15% 15% 6% 6% 16% Services Manufacturing Real Estate and Rental and Leasing Construction Retail Trade Wholesale Trade Other 47% 33% 5% 2% 1% 12% IN AZ IL FL OH Other 45% 37% 18% C&I - Term Loans Owner Occupied CRE C&I - Lines of Credit C&I and Owner-Occupied Commercial Real Estate  $163.4 million in combined balances as of September 30, 2022  Current C&I LOC utilization of 47.7%  Average loan sizes  C&I: $652,000  Owner-occupied CRE: $765,000 18 Portfolio by Loan Type Portfolio Mix by State Portfolio Mix by Major Industry 18

 
Residential Mortgage  $359.7 million in balances as of September 30, 2022 (includes home equity balances)  Direct-to-consumer originations centrally located at corporate headquarters  Focused on high quality borrowers – Average loan size of $190,000 – Average credit score at origination of 749 – Average LTV at origination of 74%  Strong historical credit performance 19 Concentration by State Concentration by Loan Type State Percentage Indiana 66% California 15% Florida 3% New York 2% Georgia 2% All other states 12% National Portfolio with Midwest Concentration 17% 3% 68% 6% 6% Loan Type Percentage Single Family Residential 82% SFR Construction to Permanent 12% Home Equity – LOC 5% Home Equity – Closed End 1% 19

 
23% 21% 17% 29% 10% Specialty Consumer  $312.5 million in balances as of September 30, 2022  Direct-to-consumer and nationwide dealer network originations  Focused on high quality borrowers – Average credit score at origination of 779 – Average loan size of $24,000  Strong historical credit performance Concentration by State Concentration by Loan Type State Percentage Texas 14% California 11% Florida 6% North Carolina 4% Arizona 4% All other states 61% Geographically Diverse Portfolio Loan Type Percentage Trailers 52% Recreational Vehicles 37% Other consumer 11% 201

 
21 Appendix

 
Loan Portfolio Composition 22 1 Includes carrying value adjustments of $33.9 million, $35.4 million, $36.4 million, $37.5 million and $42.7 million related to terminated interest rate swaps associated with public finance loans as of September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and December 31, 2020, respectively, and $21.4 million as of December 31, 2019 related to interest rate swaps associated with public finance loans. Dollars in thousands 2019 2020 2021 1Q22 2Q22 3Q22 Commercial loans Commercial and industrial 96,420$ 75,387$ 96,008$ 99,808$ 110,540$ 104,780$ Owner-occupied commercial real estate 86,726 89,785 66,732 56,752 61,277 58,615 Investor commercial real estate 12,567 13,902 28,019 34,627 52,648 91,021 Construction 60,274 110,385 136,619 149,662 143,475 139,509 Single tenant lease financing 995,879 950,172 865,854 852,519 867,181 895,302 Public finance 687,094 622,257 592,665 587,817 613,759 614,139 Healthcare finance 300,612 528,154 387,852 354,574 317,180 293,686 Small business lending 46,945 125,589 108,666 97,040 102,724 113,001 Franchise finance - - 81,448 107,246 168,942 225,012 Total commercial loans 2,286,517 2,515,631 2,363,863 2,340,045 2,437,726 2,535,065 Consumer loans Residential mortgage 313,849 186,787 186,770 191,153 281,124 337,565 Home equity 24,306 19,857 17,665 18,100 19,928 22,114 Trailers 146,734 144,493 146,267 148,870 154,555 162,161 Recreational vehicles 102,702 94,405 90,654 93,458 105,876 115,694 Other consumer loans 45,873 36,794 28,557 28,002 32,524 34,657 Tax refund advance loans - - - 9,177 - - Total consumer loans 633,464 482,336 469,913 488,760 594,007 672,191 Net def. loan fees, prem., disc. and other 1 43,566 61,264 53,886 51,975 50,394 48,650 Total loans 2,963,547$ 3,059,231$ 2,887,662$ 2,880,780$ 3,082,127$ 3,255,906$

 
Reconciliation of Non-GAAP Financial Measures 23 Dollars in thousands 2015 2016 2017 2018 2019 2020 2021 3Q22 Total equity - GAAP $104,330 $153,942 $224,127 $288,735 $304,913 $330,944 $380,338 $360,857 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $99,643 $149,255 $219,440 $284,048 $300,226 $326,257 $375,651 $356,170 Common shares outstanding 4,481,347 6,478,050 8,411,077 10,170,778 9,741,800 9,800,569 9,754,455 9,290,885 Book value per common share $23.28 $23.76 $26.65 $28.39 $31.30 $33.77 $38.99 $38.84 Effect of goodwill (1.04) (0.72) (0.56) (0.46) (0.48) (0.48) (0.48) (0.50) Tangible book value per common share $22.24 $23.04 $26.09 $27.93 $30.82 $33.29 $38.51 $38.34

 
Reconciliation of Non-GAAP Financial Measures 24 Dollars in thousands 3Q21 4Q21 1Q22 2Q22 3Q22 Total equity - GAAP $370,442 $380,338 $374,655 $365,332 $360,857 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible common equity $365,755 $375,651 $369,968 $360,645 $356,170 Total assets - GAAP $4,252,292 $4,210,994 $4,225,397 $4,099,806 $4,264,424 Adjustments: Goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Tangible assets $4,247,605 $4,206,307 $4,220,710 $4,095,119 $4,259,737 Common shares outstanding 9,854,153 9,754,455 9,683,727 9,404,000 9,290,885 Book value per common share $37.59 $38.99 $38.69 $38.85 $38.84 Effect of goodwill (0.47) (0.48) (0.48) (0.50) (0.50) Tangible book value per common share $37.12 $38.51 $38.21 $38.35 $38.34 Total shareholders' equity to assets 8.71% 9.03% 8.87% 8.91% 8.46% Effect of goodwill (0.10%) (0.10%) (0.10%) (0.10%) (0.10%) Tangible common equity to tangible assets 8.61% 8.93% 8.77% 8.81% 8.36% Total average equity - GAAP $366,187 $376,832 $380,767 $374,274 $371,303 Adjustments: Average goodwill (4,687) (4,687) (4,687) (4,687) (4,687) Average tangible common equity $361,500 $372,145 $376,080 $369,587 $366,616 Return on average shareholders' equity 13.10% 13.14% 11.94% 10.23% 9.01% Effect of goodwill 0.17% 0.16% 0.15% 0.13% 0.12% Return on average tangible common equity 13.27% 13.30% 12.09% 10.36% 9.13%

 
Reconciliation of Non-GAAP Financial Measures 25 1 Assuming a 21% tax rate Dollars in thousands 3Q21 4Q21 1Q22 2Q22 3Q22 Total interest income $33,034 $34,192 $36,034 $36,106 $39,099 Adjustments: Fully-taxable equivalent adjustments 1 1,356 1,348 1,314 1,377 1,280 Total interest income - FTE $34,390 $35,540 $37,348 $37,483 $40,379 Total interest income - FTE $34,390 $35,540 $37,348 $37,483 $40,379 Adjustments: Income from tax refund advance loans - - (2,864.00) (149) - Adjusted total interest income - FTE $34,390 $35,540 $34,484 $37,334 $40,379 Net interest income $20,919 $23,505 $25,750 $25,680 $23,994 Adjustments: Fully-taxable equivalent adjustments 1 1,356 1,348 1,314 1,377 1,280 Net interest income - FTE $22,275 $24,853 $27,064 $27,057 $25,274 Net interest income $20,919 $23,505 $25,750 $25,680 $23,994 Adjustments: Subordinated debt redemption cost 810.00 - - - - Income from tax refund advance loans - - (2,864) (149) - Adjusted net interest income $21,729 $23,505 $22,886 $25,531 $23,994 Net interest income $20,919 $23,505 $25,750 $25,680 $23,994 Adjustments: Fully-taxable equivalent adjustments 1 1,356 1,348 1,314 1,377 1,280 Subordinated debt redemption cost 810.00 - - - - Income from tax refund advance loans - - (2,864) (149) - Adjusted net interest income - FTE $23,085 $24,853 $24,200 $26,908 $25,274 Net interest margin 2.00% 2.30% 2.56% 2.60% 2.40% Adjustments: Effect of fully-taxable equivalent adjustments 1 0.13% 0.13% 0.13% 0.14% 0.13% Net interest margin - FTE 2.13% 2.43% 2.69% 2.74% 2.53%

 
Reconciliation of Non-GAAP Financial Measures 26 1 Assuming a 21% tax rate Dollars in thousands 3Q21 4Q21 1Q22 2Q22 3Q22 Net interest margin 2.00% 2.30% 2.56% 2.60% 2.40% Adjustments: Effect of subordinated debt redemption cost 0.08% 0.00% 0.00% 0.00% 0.00% Effect of income from tax refund advance loans 0.00% 0.00% (0.28%) (0.02%) 0.00% Adjusted net interest margin 2.08% 2.30% 2.28% 2.58% 2.40% Net interest margin 2.00% 2.30% 2.56% 2.60% 2.40% Adjustments: Effect of fully-taxable equivalent adjustments 1 0.13% 0.13% 0.13% 0.14% 0.13% Effect of subordinated debt redemption cost 0.08% 0.00% 0.00% 0.00% 0.00% Effect of income from tax refund advance loans 0.00% 0.00% (0.28%) (0.02%) 0.00% Adjusted net interest margin - FTE 2.21% 2.43% 2.41% 2.72% 2.53% Provision (benefit) for loan losses (29)$ (238)$ 791$ 1,185$ 892$ Adjustments: Provision for tax refund advance loans losses - - (1,842) (18) - Provision (benefit) for loan losses, excluding tax refund advance loans (29)$ (238)$ (1,051)$ 1,167$ 892$ Average loans 2,933,654 2,914,858 2,947,924 2,998,144 3,161,850 Adjustments: Average tax refund advance loans - - (60,499) (3,185) - Average loans, excluding tax refund advance loans 2,933,654 2,914,858 2,887,425 2,994,959 3,161,850 Net charge-offs (recoveries) to average loans 0.01% (0.01%) 0.05% 0.04% 0.02% Adjustments: Effect of tax refund advance loans net charge-offs to average loans 0.00% 0.00% (0.21%) (0.05%) 0.00% Net charge-offs (recoveries) to average loans, excluding tax refund advance loans 0.01% (0.01%) (0.16%) (0.01%) 0.02% Allowance for loan losses $28,000 $27,841 $28,251 $29,153 $29,866 Loans $2,936,148 $2,887,662 $2,880,780 $3,082,127 $3,255,906 Adjustments: PPP loans (14,981) (3,152) (1,003) (194) - Loans, excluding PPP loans $2,921,167 $2,884,510 $2,879,777 $3,081,933 $3,255,906 Allowance for loan losses to loans 0.95% 0.96% 0.98% 0.95% 0.92% Effect of PPP loans 0.01% 0.01% 0.00% 0.00% 0.00% Allowance for loan losses to loans, excluding PPP loans 0.96% 0.97% 0.98% 0.95% 0.92%

 
Reconciliation of Non-GAAP Financial Measures 27 Dollars in thousands 3Q21 4Q21 1Q22 2Q22 3Q22 Noninterest expense $14,451 $16,955 $18,780 $17,985 $17,995 Adjustments: Acquisition-related expenses - (163) (170) (103) - Write-down of software - (475) - - (125) Nonrecurring consulting fee - - (875) - - Discretionary inflation bonus - - - (531) - Accelerated equity compensation - - - (289) - Adjusted noninterest expense $14,451 $16,317 $17,735 $17,062 $17,870 Noninterest expense to average assets 1.34% 1.61% 1.81% 1.76% 1.74% Effect of acquisition-related expenses 0.00% (0.02%) (0.02%) (0.01%) 0.00% Effect of write-down of software 0.00% (0.04%) 0.00% 0.00% (0.01%) Effect of nonrecurring consulting fee 0.00% 0.00% (0.08%) 0.00% 0.00% Effect of discretionary inflation bonus 0.00% 0.00% 0.00% (0.05%) 0.00% Effect of accelerated equity compensation 0.00% 0.00% 0.00% (0.03%) 0.00% Adjusted noninterest expense to average assets 1.34% 1.55% 1.71% 1.67% 1.73% Income before income taxes - GAAP $14,310 $14,482 $12,999 $10,824 $9,423 Adjustments: Gain on sale of premises and equipment - - - - - Subordinated debt redemption cost 810 - - - - Acquisition-related expenses - 163 170 103 - Effect of write-down of software - 475 - - 125 Nonrecurring consulting fee - - 875 - - Discretionary inflation bonus - - - 531 - Accelerated equity compensation - - - 289 - Adjusted income before income taxes $15,120 $15,120 $14,044 $11,747 $9,548

 
Reconciliation of Non-GAAP Financial Measures 28 1 Assuming a 21% tax rate Dollars in thousands 3Q21 4Q21 1Q22 2Q22 3Q22 Income tax provision - GAAP 2,220$ 2,004$ 1,790$ 1,279$ 987$ Adjustments:1 Gain on sale of premises and equipment - - - - - Subordinated debt redemption cost 170 - - - - Acquisition-related expenses - 34 36 21 - Write-down of software - 100 - - 26 Nonrecurring consulting fee - - 184 - - Discretionary inflation bonus - - - 112 - Accelerated equity compensation - - - 61 - Adjusted income tax provision 2,390$ 2,138$ 2,010$ 1,473$ 1,013$ Net income - GAAP $12,090 $12,478 $11,209 $9,545 $8,436 Adjustments: Gain on sale of premises and equipment - - - - - Subordinated debt redemption cost 640 - - - - Acquisition-related expenses - 129 134 82 - Write-down of software - 375 - - 99 Nonrecurring consulting fee - - 691 - - Discretionary inflation bonus - - - 419 - Accelerated equity compensation - - - 228 - Adjusted net income $12,730 $12,982 $12,034 $10,274 $8,535 Diluted average common shares outstanding 9,988,102 9,989,951 9,870,394 9,658,689 9,525,855 Diluted earnings per share - GAAP 1.21$ 1.25$ 1.14$ 0.99$ 0.89$ Adjustments: Effect of gain on sale of premises and equipment Effect of subordinated debt redemption cost 0.06 - - - - Effect of acquisition-related expenses - 0.01 0.01 0.01 - Effect of write-down of software - 0.04 - - 0.01 Effect of nonrecurring consulting fee - - 0.07 - - Effect of discretionary inflation bonus - - - 0.04 - Effect of accelerated equity compensation - - - 0.02 - Adjusted diluted earnings per share $1.27 $1.30 $1.22 $1.06 $0.90

 
Reconciliation of Non-GAAP Financial Measures 29 Dollars in thousands 3Q21 4Q21 1Q22 2Q22 3Q22 Return on average assets 1.12% 1.19% 1.08% 0.93% 0.82% Effect of gain on sale of premises and equipment 0.00% 0.00% 0.00% 0.00% 0.00% Effect of subordinated debt redemption cost 0.06% 0.00% 0.00% 0.00% 0.00% Effect of acquisition-related expenses 0.00% 0.01% 0.01% 0.01% 0.00% Effect of write-down of software 0.00% 0.04% 0.00% 0.00% 0.01% Effect of nonrecurring consulting fee 0.00% 0.00% 0.07% 0.00% 0.00% Effect of discretionary inflation bonus 0.00% 0.00% 0.00% 0.04% 0.00% Effect of accelerated equity compensation 0.00% 0.00% 0.00% 0.02% 0.00% Adjusted return on average assets 1.18% 1.24% 1.16% 1.00% 0.83% Return on average shareholders' equity 13.10% 13.14% 11.94% 10.23% 9.01% Effect of gain on sale of premises and equipment 0.00% 0.00% 0.00% 0.00% 0.00% Effect of subordinated debt redemption cost 0.69% 0.00% 0.00% 0.00% 0.00% Effect of acquisition-related expenses 0.00% 0.14% 0.14% 0.09% 0.00% Effect of write-down of software 0.00% 0.39% 0.00% 0.00% 0.11% Effect of nonrecurring consulting fee 0.00% 0.00% 0.74% 0.00% 0.00% Effect of discretionary inflation bonus 0.00% 0.00% 0.00% 0.45% 0.00% Effect of accelerated equity compensation 0.00% 0.00% 0.00% 0.24% 0.00% Adjusted return on average shareholders' equity 13.79% 13.67% 12.82% 11.01% 9.12% Return on average tangible common equity 13.27% 13.30% 12.09% 10.36% 9.13% Effect of gain on sale of premises and equipment 0.00% 0.00% 0.00% 0.00% 0.00% Effect of subordinated debt redemption cost 0.70% 0.00% 0.00% 0.00% 0.00% Effect of acquisition-related expenses 0.00% 0.14% 0.14% 0.09% 0.00% Effect of write-down of software 0.00% 0.40% 0.00% 0.00% 0.11% Effect of nonrecurring consulting fee 0.00% 0.00% 0.75% 0.00% 0.00% Effect of discretionary inflation bonus 0.00% 0.00% 0.00% 0.45% 0.00% Effect of accelerated equity compensation 0.00% 0.00% 0.00% 0.25% 0.00% Adjusted return on average tangible common equity 13.97% 13.84% 12.98% 11.15% 9.24% Effective income tax rate 15.5% 13.8% 13.8% 11.8% 10.5% Effect of gain on sale of premises and equipment 0.0% 0.0% 0.0% 0.0% 0.0% Effect of subordinated debt redemption cost 0.3% 0.0% 0.0% 0.0% 0.0% Effect of acquisition-related expenses 0.0% 0.1% 0.3% 0.2% 0.3% Effect of write-down of software 0.0% 0.2% 0.0% 0.0% 0.0% Effect of nonrecurring consulting fee 0.0% 0.0% 1.3% 0.0% 0.0% Effect of discretionary inflation bonus 0.0% 0.0% 0.0% 1.0% 0.0% Effect of accelerated equity compensation 0.0% 0.0% 0.0% 0.6% 0.0% Adjusted effective income tax rate 15.8% 14.1% 15.4% 13.6% 10.8%

 
Reconciliation of Non-GAAP Financial Measures 30 1 Assuming a 21% tax rate Dollars in thousands 3Q21 4Q21 1Q22 2Q22 3Q22 Income before income taxes - GAAP 14,310$ 14,482$ 12,999$ 10,824$ 9,423$ Adjustments: Income from tax refund advance loans - - (2,864) (149) - Provision for tax refund advance loans losses - - 1,842 18 - Tax refund advance loans servicing fee - - 921 9 - Income before income taxes, excluding tax refund advance loans 14,310$ 14,482$ 12,898$ 10,702$ 9,423$ Income tax provision - GAAP 2,220$ 2,004$ 1,790$ 1,279$ 987$ Adjustments:1 Income from tax refund advance loans - - (601) (31) - Provision for tax refund advance loans losses - - 387 4 - Tax refund advance loans servicing fee - - 193 2 - Income tax provision, excluding tax refund advance loans 2,220$ 2,004$ 1,769$ 1,254$ 987$ Net income - GAAP $12,090 $12,478 $11,209 $9,545 $8,436 Adjustments: Income from tax refund advance loans - - (2,263) (118) - Provision for tax refund advance loans losses - - 1,455 14 - Tax refund advance loans servicing fee - - 728 7 - Net income, excluding tax refund advance loans 12,090$ 12,478$ 11,129$ 9,448$ 8,436$