First Internet Bancorp - Fixed- Stock Earnings Reports

Key points for investors: First Internet Bancorp delivered stronger net interest income and margin in Q2 (NIM ~1.96% GAAP / 2.04% FTE) but reported only $0.02 diluted EPS owing mainly to elevated credit costs and lower-than-expected noninterest income in the quarter. Credit: elevated provisions and nonperforming loans are concentrated in the franchise finance and SBA/small-business portfolios. Early-warning metrics improved — overall delinquencies fell to 62 bps (down 15 bps in 90 days) and many deferrals have reversed (franchise: deferrals down to 0; SBA deferrals half of Q4’24 levels and dollar value down >60%). Franchise finance: $12.6M moved to nonperforming in Q2, ~5% of that portfolio on nonaccrual with ~1/3 covered by specific reserves; management reports slowing pace of new delinquencies and improved workout/recovery outcomes. SBA: management reports improvement vs. recent peaks (repurchase activity peaked March 2025 and has since decelerated), temporarily held more loans for sale to preserve guarantees (SBA loans held-for-sale +$92M QoQ), which reduced Q2 gain-on-sale but sales resumed in July ($52M sold, ~$3.7M gain month-to-date). Liquidity & deposits: fintech relationships are producing strong low-cost deposits (fintech deposits >$1B total; Ramp deposits ~ $500M in June); 33% of deposits are indexed to Fed funds, and CD repricing is lowering deposit costs. Outlook & guidance: for Q3/Q4 2025 management expects FTE NIM ~2.20–2.25% and 2.30–2.35% respectively, FTE NII ~$33.5M (Q3) and ~$35.5M (Q4), noninterest income ~ $13.3M per quarter, quarterly provision ~$10–11M, and expenses ~$27M/quarter. 2026 guidance: loan growth target 5–7%, FTE NII $158–163M, NIM 2.5–2.6%, noninterest income $51–54M, expense $108–112M, provision $37–40M; EPS range $5.20 (conservative) to $6.30 (optimistic) with midpoint ~ $5.80. Capital & buybacks: management is prioritizing rebuilding capital before buybacks; CEO signaled buybacks would be considered if shares fall into the teens. Management is taking a conservative provisioning stance to avoid future misses but believes credit trends are turning positive. Overall: operational momentum in lending and fintech-driven deposit growth support margin expansion, but credit remediation in franchise finance and SBA will keep provisions elevated near-term.