First Internet Bancorp (the "Company") (NASDAQ:INBK), the parent company of First Internet Bank (the "Bank"), announced today financial and operational results for the second quarter ended June 30, 2023.

Second Quarter 2023 Financial Highlights

Net income of $3.9 million and diluted earnings per share of $0.44
Deposit growth of $232.0 million, a 6.4% increase from the first quarter of 2023
Loan growth of $39.6 million, a 1.1% increase from the first quarter of 2023
The loans to deposits ratio was 94.6%, compared to 99.6% in the first quarter of 2023
Net interest margin of 1.53% and fully-taxable equivalent net interest margin of 1.64%, compared to 1.76% and 1.89%, respectively, for the first quarter of 2023
Nonperforming loans declined to 0.17% of total loans
Repurchased 203,000 common shares at an average price of $13.52 per share
Tangible common equity to tangible assets of 7.07%; CET1 ratio of 10.10%; tangible book value per share of $39.85, a 1.6% increase from the first quarter of 2023

"Following the events in the banking sector that occurred in March, we responded quickly to further enhance our balance sheet liquidity," said David Becker, Chairman and Chief Executive Officer. "These actions resulted in higher deposit costs and cash balances, which impacted our earnings, but further solidified our strong foundation. Moreover, credit measures improved during the second quarter, asset quality overall remains sound, and our capital position is strong, leaving us well-positioned for the road ahead. At the same time, we continued to execute our strategy of optimizing the loan portfolio composition through funding high quality variable rate and higher yielding loans. New origination yields continued to meaningfully improve during the quarter, and our SBA team delivered strong results, setting the stage for us to achieve stronger earnings and profitability as deposit costs stabilize."

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2023 was $18.1 million, compared to $19.6 million for the first quarter of 2023, and $25.7 million for the second quarter of 2022. On a fully-taxable equivalent basis, net interest income for the second quarter of 2023 was $19.5 million, compared to $21.0 million for the first quarter of 2023, and $27.1 million for the second quarter of 2022.

Total interest income for the second quarter of 2023 was $58.1 million, an increase of 11.7% compared to the first quarter of 2023, and an increase of 61.0% compared to the second quarter of 2022. On a fully-taxable equivalent basis, total interest income for the second quarter of 2023 was $59.5 million, an increase of 11.3% compared to the first quarter of 2023 and an increase of 58.7% compared to the second quarter of 2022. The increase from the linked quarter was due primarily to growth in interest income earned on loans, other earning assets and securities. The yield on average interest-earning assets for the second quarter of 2023 increased to 4.89% from 4.69% for the first quarter of 2023 due primarily to a 19 basis point ("bp") increase in the average loan yield, a 49 bp increase in the yield earned on other earning assets, and a 7 bp increase in the yield earned on securities. Compared to the linked quarter, average loan balances increased $72.9 million, or 2.0%, while the average balance of other earning assets increased $180.0 million, or 54.3%, and the average balance of securities increased $18.9 million, or 3.2%.

Interest income earned on commercial loans was higher due to increased average balances and the positive impact of higher rates in the variable rate small business lending, construction and investor commercial real estate portfolios, as well as growth and higher yields on new originations in the franchise finance portfolio. This was partially offset by lower average balances in the healthcare finance and public finance portfolios.

In the consumer portfolio, interest income was up due to higher yields on new originations and growth in the average balances of the trailers, recreational vehicles and other consumer loans portfolios. Additionally, the average balance in the residential mortgage portfolio increased due to draws on existing construction/perm loans.

The yield on funded portfolio originations was 8.42% in the second quarter of 2023, an increase of 66 bps compared to the first quarter of 2023, and an increase of 366 bps compared to the second quarter of 2022. Because of the fixed-rate nature of certain larger portfolios, there is a lagging impact of origination yields on the portfolio, which are expected to increase over time.

Interest earned on cash and other earning asset balances increased $2.7 million, or 72.2%, during the quarter due to the impact of higher short-term interest rates on cash balances as well as a $180.0 million, or 60.0%, increase in average cash balances. Furthermore, interest income earned on securities increased $0.3 million, or 6.6%, during the second quarter of 2023 due to an increase in the yield earned on the portfolio and an increase in average balances. The yield on the portfolio increased 7 bps to 3.12%, driven primarily by variable rate securities resetting higher and higher yields on new purchases.

Total interest expense for the second quarter of 2023 was $40.0 million, an increase of $7.5 million, or 23.2%, compared to the linked quarter, due to increases in both market interest rates and average interest-bearing deposit balances throughout the quarter. Interest expense related to interest-bearing deposits increased $7.4 million, or 27.2%, driven primarily by higher costs on CDs and brokered deposits and, to a lesser extent, interest-bearing demand deposits. The cost of interest-bearing deposits was 3.75% for the second quarter, compared to 3.24% for the first quarter of 2023. The pace of increase in deposit costs during the second quarter was the slowest experienced by the Company in the past four quarters.

Average CD balances increased $231.1 million, or 21.9%, while the cost of funds increased 72 bps, as strong consumer and small business demand resumed during the quarter. The average balance of brokered deposits increased $147.3 million, or 24.9%, due in part to funding early in the quarter to supplement on-balance sheet liquidity, while the cost of funds increased 54 bps.

The average balance of BaaS deposits increased by $62.3 million, or 137.3%, from the first quarter of 2023 and totaled $154.5 million at quarter-end as existing programs grew and other Fintech programs were onboarded during the quarter.

Net interest margin ("NIM") was 1.53% for the second quarter of 2023, down from 1.76% for the first quarter of 2023, and 2.60% for the second quarter of 2022. Fully-taxable equivalent NIM ("FTE NIM") was 1.64% for the second quarter of 2023, down from 1.89% for the first quarter of 2023, and 2.74% for the second quarter of 2022. The decreases in NIM and FTE NIM compared to the linked quarter were driven primarily by the effect of higher interest-bearing deposit costs, partially offset by higher yields on loans, other earning assets and securities. Additionally, given the volatility in the banking industry over the last several months, the Company carried higher cash balances during the quarter, which were estimated to have negatively impacted NIM and FTE NIM by 6 to 7 bps.

Noninterest Income

Noninterest income for the second quarter of 2023 was $5.9 million, up $0.4 million, or 7.8%, from the first quarter of 2023, and up $1.6 million, or 36.1%, from the second quarter of 2022. Gain on sale of loans totaled $4.9 million for the second quarter of 2023, up $0.8 million, or 19.9%, 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, which increased due to a higher volume of loan sales, as well as modestly higher net premiums. Net loan servicing revenue declined $0.2 million during the quarter due to amortization and a lower fair value adjustment to the loan servicing asset.

Noninterest Expense

Noninterest expense for the second quarter of 2023 was $18.7 million, down $2.3 million, or 10.9%, from the first quarter of 2023, and up $0.7 million, or 3.8%, from the second quarter of 2022. Excluding $3.1 million of mortgage operation and exit costs, noninterest expense totaled $17.9 million for the first quarter of 2023. On a comparable basis, noninterest expense increased $0.8 million, or 4.3%, in the second quarter as compared to the adjusted noninterest expense for the first quarter. Salaries and employee benefits expense increased $1.1 million in the second quarter due primarily to higher SBA incentive compensation driven by increased origination activity. In addition, deposit insurance premiums increased from the linked quarter due primarily to year-over-year asset growth and changes in the composition of the loan and deposit portfolios. These increases were partially offset by declines in loan expenses, consulting and professional fees and data processing expenses.

Income Taxes

The Company recognized an income tax benefit of $0.2 million for the second quarter of 2023, compared to an income tax benefit of $2.3 million for the first quarter of 2023, and an income tax expense of $1.3 million and an effective tax rate of 11.8% for the second quarter of 2022. The income tax benefit in the second quarter of 2023 reflects the benefit of tax-exempt income relative to the lower amount of stated pre-tax income.

Loans and Credit Quality

Total loans as of June 30, 2023 were $3.6 billion, an increase of $39.6 million, or 1.1%, compared to March 31, 2023, and an increase of $564.7 million, or 18.3%, compared to June 30, 2022. Total commercial loan balances were $2.8 billion as of June 30, 2023, an increase of $25.2 million, or 0.9%, compared to March 31, 2023, and an increase of $393.3 million, or 16.1%, compared to June 30, 2022. Compared to the linked quarter, the increase in commercial loan balances was driven primarily by growth in construction and small business lending balances, as well as modest growth in franchise finance balances. These items were partially offset by decreases in the public finance and single tenant lease financing portfolios as well as continued runoff in the healthcare finance portfolio.

Total consumer loan balances were $772.7 million as of June 30, 2023, an increase of $16.3 million, or 2.2%, compared to March 31, 2023, and an increase of $178.6 million, or 30.1%, compared to June 30, 2022. The increase compared to the linked quarter was due primarily to higher balances in the trailers, recreational vehicles and other consumer loans portfolios, as well as draws on existing residential mortgage construction/perm loans.

Total delinquencies 30 days or more past due were 0.09% of total loans as of June 30, 2023, compared to 0.13% at March 31, 2023, and 0.06% as of June 30, 2022. Nonperforming loans to total loans was 0.17% as of June 30, 2023, compared to 0.26% at March 31, 2023, and 0.15% as of June 30, 2022. Nonperforming loans totaled $6.2 million at June 30, 2023, down from $9.2 million at March 31, 2023. The decrease was due primarily to the resolution of one C&I participation loan that was placed on nonaccrual status in the first quarter of 2023.

The allowance for credit losses ("ACL") as a percentage of total loans was 0.99% as of June 30, 2023, compared to 1.02% as of March 31, 2023, and 0.95% as of June 30, 2022. The decrease in the ACL reflects the positive impact of economic data on forecasted loss rates for certain portfolios.

Net charge-offs were $1.6 million in the second quarter of 2023, compared to net charge-offs of $7.2 million in the first quarter of 2023. The linked quarter decline was due to the partial charge-off of the aforementioned C&I participation loan in the first quarter, which totaled $6.9 million. Net charge-offs in the second quarter were driven primarily by small business lending, as well as one franchise finance loan. As a result, net charge-offs to average loans totaled 17 bps in the second quarter, down from 82 bps in the first quarter.

The provision for credit losses in the second quarter was $1.7 million, compared to $9.4 million for the first quarter of 2023, which included the charge-off of the C&I participation loan mentioned above. The provision for the second quarter was driven primarily by net charge-offs and an increase in the reserve for unfunded commitments, partially offset by the positive impact of economic forecasts on certain portfolios.

Capital

As of June 30, 2023, total shareholders' equity was $354.3 million, a decrease of $1.2 million, or 0.3%, compared to March 31, 2023, and a decrease of $11.0 million, or 3.0%, compared to June 30, 2022. The decrease in shareholders' equity during the second quarter of 2023 was due primarily to stock repurchase activity and an increase in accumulated other comprehensive loss, partially offset by net income earned during the quarter. Book value per common share was $40.38 as of June 30, 2023, up from $39.76 as of March 31, 2023, and up from $38.85 as of June 30, 2022. Tangible book value per share was $39.85, up from $39.23 as of March 31, 2023, and up from $38.35 as of June 30, 2022.

In connection with its previously announced stock repurchase program, the Company repurchased 203,000 shares of its common stock during the second quarter of 2023 at an average price of $13.52 per share. The Company has repurchased $38.9 million of stock under its authorized programs since November of 2021.

The following table presents the Company's and the Bank's regulatory and other capital ratios as of June 30, 2023.

	As of June 30, 2023
	Company	Bank

Total shareholders' equity to assets	7.16%	8.86%
Tangible common equity to tangible assets ¹	7.07%	8.77%
Tier 1 leverage ratio ²	7.63%	9.35%
Common equity tier 1 capital ratio ²	10.10%	12.39%
Tier 1 capital ratio ²	10.10%	12.39%
Total risk-based capital ratio ²	13.87%	13.37%

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 2:00 p.m. Eastern Time on Thursday, July 27, 2023 to discuss its quarterly financial results. The call can be accessed via telephone at (888) 259-6580; access code: 24458732. A recorded replay can be accessed through August 26, 2023 by dialing (877) 674-7070; access code: 458732.

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 $4.9 billion as of June 30, 2023. The Company's subsidiary, First Internet Bank, opened for business in 1999 as an industry pioneer in the branchless delivery of banking services. First Internet Bank provides consumer and small business deposit, SBA financing, franchise finance, 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". 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 within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, 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 "anticipate," "believe," "continue," "could," "estimate," "expect," "growth," "help," "may," "opportunities," "pending," "plan," "position," "preliminary," "remain," "should," "thereafter," "well-positioned," "will," 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: 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 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 and industrial, construction, SBA, and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; the anticipated impacts of inflation and rising interest rates on the general economy; 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, net interest income – FTE, net interest margin – FTE, adjusted total revenue, adjusted noninterest income, adjusted noninterest expense, adjusted income (loss) before income taxes, adjusted income tax (benefit) provision, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders' equity, and adjusted return on average tangible common equity 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."

First Internet Bancorp
Summary Financial Information (unaudited)
Dollar amounts in thousands, except per share data

	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
	2023			2023			2022			2023			2022

Net income (loss)	$	3,882		$	(3,017	)	$	9,545		$	865		$	20,754

Per share and share information
Earnings (loss) per share - basic	$	0.44		$	(0.33	)	$	0.99		$	0.10		$	2.14
Earnings (loss) per share - diluted		0.44			(0.33	)		0.99			0.10			2.13
Dividends declared per share		0.06			0.06			0.06			0.12			0.12
Book value per common share		40.38			39.76			38.85			40.38			38.85
Tangible book value per common share ¹		39.85			39.23			38.35			39.85			38.35
Common shares outstanding		8,774,507			8,943,477			9,404,000			8,774,507			9,404,000
Average common shares outstanding:
Basic		8,903,213			9,024,072			9,600,383			8,963,308			9,694,729
Diluted		8,908,180			9,024,072			9,658,689			8,980,262			9,764,232
Performance ratios
Return on average assets		0.32	%		(0.26	%)		0.93	%		0.04	%		1.01	%
Return on average shareholders' equity		4.35	%		(3.37	%)		10.23	%		0.48	%		11.09	%
Return on average tangible common equity ¹		4.40	%		(3.41	%)		10.36	%		0.49	%		11.23	%
Net interest margin		1.53	%		1.76	%		2.60	%		1.64	%		2.58	%
Net interest margin - FTE ^1,2		1.64	%		1.89	%		2.74	%		1.76	%		2.71	%
Capital ratios ³
Total shareholders' equity to assets		7.16	%		7.53	%		8.91	%		7.16	%		8.91	%
Tangible common equity to tangible assets ¹		7.07	%		7.44	%		8.81	%		7.07	%		8.81	%
Tier 1 leverage ratio		7.63	%		8.10	%		9.45	%		7.63	%		9.45	%
Common equity tier 1 capital ratio		10.10	%		10.30	%		12.46	%		10.10	%		12.46	%
Tier 1 capital ratio		10.10	%		10.30	%		12.46	%		10.10	%		12.46	%
Total risk-based capital ratio		13.87	%		14.13	%		16.74	%		13.87	%		16.74	%
Asset quality
Nonperforming loans	$	6,227		$	9,221		$	4,527		$	6,227		$	4,527
Nonperforming assets		6,397			9,346			4,550			6,397			4,550
Nonperforming loans to loans		0.17	%		0.26	%		0.15	%		0.17	%		0.15	%
Nonperforming assets to total assets		0.13	%		0.20	%		0.11	%		0.13	%		0.11	%
Allowance for credit losses - loans to:
Loans		0.99	%		1.02	%		0.95	%		0.99	%		0.95	%
Nonperforming loans		579.1	%		400.0	%		644.0	%		579.1	%		644.0	%
Net charge-offs to average loans		0.17	%		0.82	%		0.04	%		0.49	%		0.05	%
Average balance sheet information
Loans	$	3,653,839		$	3,573,827		$	2,998,144		$	3,614,054		$	2,973,173
Total securities		604,182			585,270			620,396			594,777			634,485
Other earning assets		511,295			331,294			322,302			421,793			388,760
Total interest-earning assets		4,771,623			4,499,782			3,962,589			4,636,453			4,021,330
Total assets		4,927,712			4,647,156			4,097,865			4,788,209			4,156,068
Noninterest-bearing deposits		117,496			134,988			108,980			126,194			110,605
Interest-bearing deposits		3,713,086			3,411,969			3,018,422			3,563,359			3,044,775
Total deposits		3,830,582			3,546,957			3,127,402			3,689,553			3,155,380
Shareholders' equity		358,312			363,273			374,274			360,779			377,504

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

	June 30,			March 31,			June 30,
	2023			2023			2022

Assets
Cash and due from banks	$	9,503		$	27,741		$	6,155
Interest-bearing deposits		456,128			276,231			201,798
Securities available-for-sale, at fair value		379,394			395,833			425,489
Securities held-to-maturity, at amortized cost, net of allowance for credit losses		230,605			210,761			185,113
Loans held-for-sale		32,001			18,144			31,580
Loans		3,646,832			3,607,242			3,082,127
Allowance for credit losses - loans		(36,058	)		(36,879	)		(29,153	)
Net loans		3,610,774			3,570,363			3,052,974
Accrued interest receivable		24,101			22,322			17,466
Federal Home Loan Bank of Indianapolis stock		28,350			28,350			25,219
Cash surrender value of bank-owned life insurance		40,357			40,105			39,369
Premises and equipment, net		73,525			74,248			70,288
Goodwill		4,687			4,687			4,687
Servicing asset		8,252			7,312			5,345
Other real estate owned		106			106			-
Accrued income and other assets		49,266			45,116			34,323
Total assets	$	4,947,049		$	4,721,319		$	4,099,806

Liabilities
Noninterest-bearing deposits	$	119,291		$	140,449		$	126,153
Interest-bearing deposits		3,735,017			3,481,841			3,025,948
Total deposits		3,854,308			3,622,290			3,152,101
Advances from Federal Home Loan Bank		614,931			614,929			464,925
Subordinated debt		104,684			104,608			104,381
Accrued interest payable		3,338			2,592			2,005
Accrued expenses and other liabilities		15,456			21,328			11,062
Total liabilities		4,592,717			4,365,747			3,734,474
Shareholders' equity
Voting common stock		186,545			189,202			204,071
Retained earnings		200,973			197,623			192,011
Accumulated other comprehensive loss		(33,186	)		(31,253	)		(30,750	)
Total shareholders' equity		354,332			355,572			365,332
Total liabilities and shareholders' equity	$	4,947,049		$	4,721,319		$	4,099,806

First Internet Bancorp
Condensed Consolidated Statements of Income (unaudited)
Dollar amounts in thousands, except per share data

	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
	2023			2023			2022			2023			2022

Interest income
Loans	$	46,906		$	43,843		$	32,415		$	90,749		$	65,603
Securities - taxable		3,835			3,606			2,567			7,441			4,788
Securities - non-taxable		860			798			328			1,658			577
Other earning assets		6,521			3,786			796			10,307			1,172
Total interest income		58,122			52,033			36,106			110,155			72,140
Interest expense
Deposits		34,676			27,270			6,408			61,946			12,505
Other borrowed funds		5,301			5,189			4,018			10,490			8,205
Total interest expense		39,977			32,459			10,426			72,436			20,710
Net interest income		18,145			19,574			25,680			37,719			51,430
Provision for credit losses		1,698			9,415			1,185			11,113			1,976
Net interest income after provision
for credit losses		16,447			10,159			24,495			26,606			49,454
Noninterest income
Service charges and fees		218			209			281			427			597
Loan servicing revenue		850			785			620			1,635			1,205
Loan servicing asset revaluation		(358	)		(55	)		(470	)		(413	)		(767	)
Mortgage banking activities		-			76			1,710			76			3,583
Gain on sale of loans		4,868			4,061			1,952			8,929			5,797
Other		293			370			221			663			719
Total noninterest income		5,871			5,446			4,314			11,317			11,134
Noninterest expense
Salaries and employee benefits		10,706			11,794			10,832			22,500			20,710
Marketing, advertising and promotion		705			844			920			1,549			1,676
Consulting and professional fees		711			926			1,197			1,637			3,122
Data processing		520			659			490			1,179			939
Loan expenses		1,072			1,977			693			3,049			2,275
Premises and equipment		2,661			2,777			2,419			5,438			4,959
Deposit insurance premium		936			543			287			1,479			568
Other		1,359			1,434			1,147			2,793			2,516
Total noninterest expense		18,670			20,954			17,985			39,624			36,765
Income (loss) before income taxes		3,648			(5,349	)		10,824			(1,701	)		23,823
Income tax (benefit) provision		(234	)		(2,332	)		1,279			(2,566	)		3,069
Net income (loss)	$	3,882		$	(3,017	)	$	9,545		$	865		$	20,754

Per common share data
Earnings (loss) per share - basic	$	0.44		$	(0.33	)	$	0.99		$	0.10		$	2.14
Earnings (loss) per share - diluted	$	0.44		$	(0.33	)	$	0.99		$	0.10		$	2.13
Dividends declared per share	$	0.06		$	0.06		$	0.06		$	0.12		$	0.12

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

	June 30, 2023							March 31, 2023							June 30, 2022

	Average			Interest /		Yield /		Average			Interest /		Yield /		Average			Interest /		Yield /
	Balance			Dividends		Cost		Balance			Dividends		Cost		Balance			Dividends		Cost

Assets
Interest-earning assets
Loans, including loans held-for-sale ¹	$	3,656,146		$	46,906	5.15	%	$	3,583,218		$	43,843	4.96	%	$	3,019,891		$	32,415	4.31	%
Securities - taxable		531,040			3,835	2.90	%		511,923			3,606	2.86	%		543,422			2,567	1.89	%
Securities - non-taxable		73,142			860	4.72	%		73,347			798	4.41	%		76,974			328	1.71	%
Other earning assets		511,295			6,521	5.12	%		331,294			3,786	4.63	%		322,302			796	0.99	%
Total interest-earning assets		4,771,623			58,122	4.89	%		4,499,782			52,033	4.69	%		3,962,589			36,106	3.65	%

Allowance for credit losses - loans		(36,671	)						(35,075	)						(28,599	)
Noninterest-earning assets		192,760							182,449							163,875
Total assets	$	4,927,712						$	4,647,156						$	4,097,865

Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits	$	359,969		$	1,509	1.68	%	$	333,642		$	900	1.09	%	$	348,274		$	466	0.54	%
Savings accounts		29,915			64	0.86	%		38,482			82	0.86	%		66,657			68	0.41	%
Money market accounts		1,274,453			12,314	3.88	%		1,377,600			12,300	3.62	%		1,427,665			1,921	0.54	%
BaaS - brokered deposits		22,918			230	4.03	%		14,741			138	3.80	%		71,234			154	0.87	%
Certificates and brokered deposits		2,025,831			20,559	4.07	%		1,647,504			13,850	3.41	%		1,104,592			3,799	1.38	%
Total interest-bearing deposits		3,713,086			34,676	3.75	%		3,411,969			27,270	3.24	%		3,018,422			6,408	0.85	%
Other borrowed funds		719,577			5,301	2.95	%		719,499			5,189	2.92	%		583,553			4,018	2.76	%
Total interest-bearing liabilities		4,432,663			39,977	3.62	%		4,131,468			32,459	3.19	%		3,601,975			10,426	1.16	%

Noninterest-bearing deposits		117,496							134,988							108,980
Other noninterest-bearing liabilities		19,241							17,427							12,636
Total liabilities		4,569,400							4,283,883							3,723,591

Shareholders' equity		358,312							363,273							374,274
Total liabilities and shareholders' equity	$	4,927,712						$	4,647,156						$	4,097,865

Net interest income				$	18,145						$	19,574						$	25,680

Interest rate spread						1.27	%						1.50	%						2.49	%

Net interest margin						1.53	%						1.76	%						2.60	%

Net interest margin - FTE ^2,3						1.64	%						1.89	%						2.74	%

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

	Six Months Ended

	June 30, 2023							June 30, 2022

	Average			Interest /		Yield /		Average			Interest /		Yield /
	Balance			Dividends		Cost		Balance			Dividends		Cost

Assets
Interest-earning assets
Loans, including loans held-for-sale ¹	$	3,619,883		$	90,749	5.06	%	$	2,998,085		$	65,603	4.41	%
Securities - taxable		521,533			7,441	2.88	%		555,533			4,788	1.74	%
Securities - non-taxable		73,244			1,658	4.56	%		78,952			577	1.47	%
Other earning assets		421,793			10,307	4.93	%		388,760			1,172	0.61	%
Total interest-earning assets		4,636,453			110,155	4.79	%		4,021,330			72,140	3.62	%
		-
Allowance for loan losses		(35,877	)						(28,288	)
Noninterest-earning assets		187,633							163,026
Total assets	$	4,788,209						$	4,156,068

Liabilities
Interest-bearing liabilities
Interest-bearing demand deposits	$	346,878		$	2,409	1.40	%	$	333,361		$	878	0.53	%
Savings accounts		34,175			145	0.86	%		63,653			121	0.38	%
Money market accounts		1,325,741			24,614	3.74	%		1,440,976			3,425	0.48	%
BaaS - brokered deposits		18,852			368	3.94	%		41,836			160	0.77	%
Certificates and brokered deposits		1,837,713			34,410	3.78	%		1,164,949			7,921	1.37	%
Total interest-bearing deposits		3,563,359			61,946	3.51	%		3,044,775			12,505	0.83	%
Other borrowed funds		719,538			10,490	2.94	%		601,274			8,205	2.75	%
Total interest-bearing liabilities		4,282,897			72,436	3.41	%		3,646,049			20,710	1.15	%

Noninterest-bearing deposits		126,194							110,605
Other noninterest-bearing liabilities		18,339							21,910
Total liabilities		4,427,430							3,778,564

Shareholders' equity		360,779							377,504
Total liabilities and shareholders' equity	$	4,788,209						$	4,156,068

Net interest income				$	37,719						$	51,430

Interest rate spread						1.38	%						2.47	%

Net interest margin						1.64	%						2.58	%

Net interest margin - FTE ^2,3						1.76	%						2.71	%

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

	June 30, 2023				March 31, 2023				June 30, 2022

	Amount		Percent		Amount		Percent		Amount		Percent

Commercial loans
Commercial and industrial	$	112,423	3.1	%	$	113,198	3.1	%	$	110,540	3.6	%
Owner-occupied commercial real estate		59,564	1.6	%		59,643	1.7	%		61,277	2.0	%
Investor commercial real estate		137,504	3.8	%		142,174	3.9	%		52,648	1.7	%
Construction		192,453	5.3	%		158,147	4.4	%		143,475	4.7	%
Single tenant lease financing		947,466	25.9	%		952,533	26.4	%		867,181	28.1	%
Public finance		575,541	15.8	%		604,898	16.8	%		613,759	19.9	%
Healthcare finance		245,072	6.7	%		256,670	7.1	%		317,180	10.3	%
Small business lending		170,550	4.7	%		136,382	3.8	%		102,724	3.3	%
Franchise finance		390,479	10.6	%		382,161	10.6	%		168,942	5.5	%
Total commercial loans		2,831,052	77.5	%		2,805,806	77.8	%		2,437,726	79.1	%

Consumer loans
Residential mortgage		396,154	10.9	%		392,062	10.9	%		281,124	9.1	%
Home equity		24,375	0.7	%		26,160	0.7	%		19,928	0.6	%
Trailers		178,035	4.9	%		172,640	4.8	%		154,555	5.0	%
Recreational vehicles		133,283	3.7	%		128,307	3.6	%		105,876	3.4	%
Other consumer loans		40,806	1.1	%		37,186	1.0	%		32,524	1.2	%
Total consumer loans		772,653	21.3	%		756,355	21.0	%		594,007	19.3	%

Net deferred loan fees, premiums, discounts and other ¹		43,127	1.2	%		45,081	1.2	%		50,394	1.6	%

Total loans	$	3,646,832	100.0	%	$	3,607,242	100.0	%	$	3,082,127	100.0	%


	June 30, 2023				March 31, 2023				June 30, 2022

	Amount		Percent		Amount		Percent		Amount		Percent

Deposits
Noninterest-bearing deposits	$	119,291	3.1	%	$	140,449	3.9	%	$	126,153	4.0	%
Interest-bearing demand deposits		398,899	10.3	%		351,641	9.7	%		350,551	11.1	%
Savings accounts		28,239	0.7	%		32,762	0.9	%		65,365	2.1	%
Money market accounts		1,232,719	32.0	%		1,254,013	34.6	%		1,363,424	43.3	%
BaaS - brokered deposits		25,549	0.7	%		25,725	0.7	%		194,133	6.2	%
Certificates of deposits		1,366,409	35.5	%		1,170,094	32.3	%		800,598	25.3	%
Brokered deposits		683,202	17.7	%		647,606	17.9	%		251,877	8.0	%

Total deposits	$	3,854,308	100.0	%	$	3,622,290	100.0	%	$	3,152,101	100.0	%

¹ Includes carrying value adjustments of $30.5 million, $31.5 million and $35.4 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

First Internet Bancorp
Reconciliation of Non-GAAP Financial Measures
Dollar amounts in thousands, except per share data

	Three Months Ended									Six Months Ended

	June 30,			March 31,			June 30,			June 30,			June 30,
	2023			2023			2022			2023			2022

Total equity - GAAP	$	354,332		$	355,572		$	365,332		$	354,332		$	365,332
Adjustments:
Goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Tangible common equity	$	349,645		$	350,885		$	360,645		$	349,645		$	360,645

Total assets - GAAP	$	4,947,049		$	4,721,319		$	4,099,806		$	4,947,049		$	4,099,806
Adjustments:
Goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Tangible assets	$	4,942,362		$	4,716,632		$	4,095,119		$	4,942,362		$	4,095,119

Common shares outstanding		8,774,507			8,943,477			9,404,000			8,774,507			9,404,000

Book value per common share	$	40.38		$	39.76		$	38.85		$	40.38		$	38.85
Effect of goodwill		(0.53	)		(0.53	)		(0.50	)		(0.53	)		(0.50	)
Tangible book value per common share	$	39.85		$	39.23		$	38.35		$	39.85		$	38.35

Total shareholders' equity to assets		7.16	%		7.53	%		8.91	%		7.16	%		8.91	%
Effect of goodwill		(0.09	%)		(0.09	%)		(0.10	%)		(0.09	%)		(0.10	%)
Tangible common equity to tangible assets		7.07	%		7.44	%		8.81	%		7.07	%		8.81	%

Total average equity - GAAP	$	358,312		$	363,273		$	374,274		$	360,779		$	377,504
Adjustments:
Average goodwill		(4,687	)		(4,687	)		(4,687	)		(4,687	)		(4,687	)
Average tangible common equity	$	353,625		$	358,586		$	369,587		$	356,092		$	372,817

Return on average shareholders' equity		4.35	%		(3.37	%)		10.23	%		0.48	%		11.09	%
Effect of goodwill		0.05	%		(0.04	%)		0.13	%		0.01	%		0.14	%
Return on average tangible common equity		4.40	%		(3.41	%)		10.36	%		0.49	%		11.23	%

Total interest income	$	58,122		$	52,033		$	36,106		$	110,155		$	72,140
Adjustments:
Fully-taxable equivalent adjustments ¹		1,347			1,383			1,377			2,731			2,691
Total interest income - FTE	$	59,469		$	53,416		$	37,483		$	112,886		$	74,831

Net interest income	$	18,145		$	19,574		$	25,680		$	37,719		$	51,430
Adjustments:
Fully-taxable equivalent adjustments ¹		1,347			1,383			1,377			2,731			2,691
Net interest income - FTE	$	19,492		$	20,957		$	27,057

First Internet Bancorp Reports Second Quarter 2023 Results