First Internet Bancorp (NASDAQ:INBK) Posts Quarterly Earnings Results, Misses Expectations By $0.21 EPS

Key Points

• First Internet Bancorp missed quarterly expectations: EPS was $0.57 versus the $0.78 consensus, while revenue came in at $43.94 million compared with expectations of $46.17 million.
• Underlying performance improved despite a credit charge: Adjusted EPS doubled sequentially, revenue reached a record, net interest margin expanded to 2.47%, and fintech deposits grew by more than $1 billion. However, a franchise-finance borrower moved to non-accrual status, reducing pretax earnings by about $3.2 million.
• Management expects a strong fourth-quarter rebound: Fourth-quarter EPS is projected at approximately $1.02–$1.07, supported by a higher net interest margin and lower provision expense. Analysts’ consensus rating remains Hold, with an average price target of $29.38.

First Internet Bancorp (NASDAQ:INBK - Get Free Report) issued its quarterly earnings results on Thursday. The bank reported $0.57 EPS for the quarter, missing the consensus estimate of $0.78 by ($0.21), FiscalAI reports. First Internet Bancorp had a negative return on equity of 0.55% and a negative net margin of 9.01%. The firm had revenue of $43.94 million for the quarter, compared to analysts' expectations of $46.17 million.

Here are the key takeaways from First Internet Bancorp's conference call:

• Core earnings improved significantly: Third-quarter adjusted EPS rose to $0.57 from $0.27 in the second quarter, while revenue reached a record $43.9 million and adjusted pre-provision net revenue increased 14% sequentially.
• Margin and balance-sheet repositioning remain favorable. Net interest margin expanded for the fourth consecutive quarter to 2.47%, supported by higher-yielding loan originations, lower-cost fintech deposits, and continued runoff of lower-yielding portfolios.
• Fintech is becoming a larger, diversified growth engine: Fintech deposits increased by more than $1 billion to $4.7 billion, fee revenue rose 13% sequentially and more than 190% year over year, and two new partners were added.
• A large franchise-finance credit relationship pressured results. The borrower was moved to non-accrual status, requiring a $2.6 million specific reserve and a $600,000 interest reversal; management said the relationship reduced pretax earnings by approximately $3.2 million, although broader delinquencies and charge-offs improved.
• Management expects a sharp fourth-quarter earnings rebound: Fourth-quarter EPS is projected at approximately $1.02–$1.07, with net interest margin of 2.75%–2.80% and lower provision expense, though SBA originations and gain-on-sale revenue are expected to remain subdued in the near term.

First Internet Bancorp Trading Up 2.3%

Shares of INBK stock traded up $0.61 on Thursday, hitting $27.27. 55,532 shares of the stock traded hands, compared to its average volume of 50,080. The firm's 50-day moving average price is $27.25 and its two-hundred day moving average price is $24.66. The company has a debt-to-equity ratio of 0.95, a quick ratio of 0.87 and a current ratio of 0.88. The stock has a market capitalization of $238.07 million, a PE ratio of -7.57 and a beta of 0.87. First Internet Bancorp has a twelve month low of $17.05 and a twelve month high of $31.09.

First Internet Bancorp Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Thursday, October 15th. Stockholders of record on Thursday, October 1st were issued a dividend of $0.06 per share. This represents a $0.24 annualized dividend and a dividend yield of 0.9%. The ex-dividend date was Thursday, October 1st. First Internet Bancorp's payout ratio is currently -6.67%.

Wall Street Analyst Weigh In

A number of brokerages have weighed in on INBK. Piper Sandler raised their price objective on First Internet Bancorp from $26.00 to $29.50 and gave the company a "neutral" rating in a report on Friday, July 31st. Zacks Research lowered shares of First Internet Bancorp from a "strong-buy" rating to a "hold" rating in a report on Tuesday. Benchmark increased their target price on shares of First Internet Bancorp from $33.00 to $35.00 and gave the company a "buy" rating in a research report on Friday, July 31st. Finally, Weiss Ratings reissued a "sell (d+)" rating on shares of First Internet Bancorp in a research note on Friday, October 2nd. Two equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, First Internet Bancorp has an average rating of "Hold" and a consensus target price of $29.38.

About First Internet Bancorp

First Internet Bancorp is a bank holding company headquartered in Fishers, Indiana. Its principal subsidiary, First Internet Bank, provides a range of banking products and financial services to businesses, organizations and individual consumers.

First Internet Bank's offerings include commercial and industrial lending, commercial real estate financing, small business and SBA loans, public finance, residential mortgage lending, consumer loans, deposit accounts and treasury management services.

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