Key Highlights

  • Net income was $4.8 million, or $0.54 per diluted share, against a net loss of $41.6 million a year earlier.
  • Record quarterly Revenue reached $43.9 million, up 7% from the second quarter.
  • Net interest Margin expanded 8 basis points to 2.47%.
  • Net charge-offs declined to 0.82% of average loans from 1.77% in the prior quarter.
  • Total deposits grew 7% from the prior quarter to $5.2 billion.

Record revenue of $43.9 million as margin keeps widening

First Internet Bancorp (NASDAQ:INBK), the Fishers, Indiana parent of First Internet Bank, reported third quarter 2026 results on October 29, 2026. The bank opened in 1999 as a branchless pioneer and serves consumers and small businesses nationally with deposits, Commercial Real Estate and construction financing, SBA lending and specialty finance, with total Assets of $5.9 billion.

Total revenue rose 7% from the prior quarter to a record $43.9 million, as net interest income climbed 7% to $34.7 million and noninterest income gained 6% to $9.2 million. Net interest income was up 14% from the prior year quarter.

Net interest margin was 2.47%, up 8 basis points from the second quarter and 43 basis points from a year ago. On a fully taxable equivalent basis, the margin was 2.55%.

Profit returns after last year's loss

Net income was $4.8 million, or $0.54 per diluted share, compared with $2.4 million, or $0.27, in the second quarter and a net loss of $41.6 million, or $4.76 per share, in the third quarter of 2025. Adjusted Diluted Earnings per Share was $0.57. The prior year quarter carried a $27.1 million loss on sale of loans.

For the nine months, Net Income was $9.7 million, or $1.10 per diluted share, against a loss of $40.5 million, or $4.63. Noninterest expense was $27.3 million.

Credit quality improves, with one Franchise finance exception

The provision for Credit losses was $11.6 million, down 13% from $13.4 million in the second quarter. Net charge-offs dropped to 0.82% of average loans from 1.77%, and delinquencies excluding nonperforming loans fell 38% from the prior quarter to 0.48% of performing loans.

Franchise finance loans placed on nonaccrual, including one large relationship, added $2.6 million of specific reserves and $1.2 million of interest reversals. Nonperforming loans rose to 1.63% of total loans from 1.58%, while the allowance for credit losses on loans was 1.48% of loans, up from 1.39%.

Fintech deposits fund a Loan mix shift

The loan portfolio shifted toward investor commercial real estate, single tenant Lease financing, Wealth advisory lending and embedded finance, lifting loan Yield 8 basis points to 6.42%. Total loans were $3.9 billion, up $52.9 million.

Total deposits grew $321.4 million to $5.2 billion, which allowed the bank to retire higher cost certificates of deposit and brokered deposits. The cost of interest-bearing deposits fell to 3.32%, and about $2.9 billion of Fintech deposits were held off-balance sheet in a deposit network. The loans to deposits ratio was 75%.

Capital levels and the fourth-quarter outlook

The common Equity tier 1 Capital ratio was 8.86% and the total capital ratio was 12.32%, both preliminary. Tangible Book Value per common share was $40.04, down from $41.09 in the second quarter, and the quarterly Dividend was $0.06 per share.

For the fourth quarter, the company expects diluted earnings per share of $1.02 to $1.07, fully taxable equivalent net interest margin of 2.75% to 2.80% and fully taxable equivalent net interest income of about $38.5 million. It also guides to noninterest income of about $7.5 million, noninterest expense of about $26.5 million and a provision of $7.5 million to $8.0 million, assuming one more 25 basis point Fed Funds increase in December.