First Internet Bancorp - Fixed- (INBKZ) Financials

First Internet Bancorp’s Q2 2026 results show a meaningful recovery from the weak 2025 period, although profitability remains modest and the balance sheet continues to contract. Net income was $2.4 million, or $0.27 per diluted share, compared with $193,000, or $0.02 per share, in Q2 2025. Total revenue increased 22.6% year over year to $41.1 million, while net interest income rose 15.9% to $32.4 million. The improvement was supported by lower funding costs and stronger interest income from investment securities and other assets.

Credit costs remain a major factor in the earnings outlook. The provision for credit losses declined to $13.4 million from $16.6 million in Q1 2026 and $13.6 million in Q2 2025, but it still consumed roughly one-third of total revenue. The allowance for loan losses was $53.1 million, or approximately 1.4% of gross loans. Gross loans declined to $3.8 billion from $4.4 billion one year earlier, while total assets fell to $5.6 billion from $6.1 billion. Investors should also note that several 2024 and 2025 income statement figures were subsequently restated in the provided data.

Cash generation improved substantially from the prior-year quarter. Operating cash flow was $24.3 million in Q2 2026, compared with negative $90.2 million in Q2 2025, although cash declined by $190.8 million during the quarter because deposits fell by $150.3 million and investing activities used $64.3 million. Common equity stood at $363.5 million, representing roughly 6.5% of total assets, and the company continued paying a $0.06-per-share quarterly dividend.

• Net interest income improved: Q2 2026 net interest income increased to $32.4 million from $28.0 million in Q2 2025 and $31.6 million in Q1 2026.
• Revenue recovered: Total revenue rose 22.6% year over year to $41.1 million, helped by stronger investment securities interest income and non-interest income.
• Profitability returned: Net income improved from $193,000 in Q2 2025 to $2.4 million in Q2 2026, while diluted EPS increased from $0.02 to $0.27.
• Credit provisions moderated: The provision for credit losses fell 19.2% sequentially to $13.4 million, and the allowance for loan losses declined from $59.9 million in Q3 2025 to $53.1 million in Q2 2026.
• Operating cash flow recovered: The company generated $24.3 million of operating cash flow in Q2 2026 versus negative $90.2 million in the year-earlier quarter.
• Funding pressure eased over the longer term: Long-term debt declined to $345.1 million from $369.8 million in Q2 2025, while the accumulated other comprehensive loss improved to $21.1 million from $30.6 million.
• Dividend remained steady: First Internet Bancorp continued paying $0.06 per common share, but the dividend represents a meaningful portion of quarterly earnings at the current profit level.
• Balance-sheet mix shifted: Trading account securities increased year over year to $1.10 billion, while interest-bearing deposits at other banks declined to $402.3 million, reflecting ongoing portfolio and liquidity management.
• Deposits and assets contracted: Interest-bearing deposits fell to $4.70 billion from $5.15 billion in Q2 2025, and total assets declined 8.5% to $5.56 billion.
• Cash declined sharply during Q2: Net cash fell by $190.8 million, primarily because of deposit outflows and negative investing cash flow, which could limit balance-sheet flexibility if the trend persists.