INBK — First Internet Bancorp

Summary of First Internet Bancorp (INBK) Q2 2026 Earnings Call

1. Key Financial Results and Metrics:

• Total Revenue: $41.1 million, up 23% year-over-year.
• Net Income: $2.4 million, or $0.27 per diluted share, significantly higher than the prior year.
• Pre-Provision Net Revenue: $15 million, up 28% year-over-year.
• Provision for Credit Losses: $13.4 million, down from $16.3 million in Q1 2026.
• Net Charge-Offs: $16.9 million, with a notable decrease in small business lending charge-offs to $4.8 million from $9.1 million.
• Non-Performing Loans: $60.1 million (1.58% of total loans), down from $61.6 million (1.63%) in the previous quarter.
• Net Interest Margin: Improved to 2.39%, up more than 40 basis points year-over-year.

2. Strategic Updates and Business Highlights:

• The company has made significant improvements in credit management, leading to reduced charge-offs and delinquencies.
• Enhanced underwriting and portfolio management processes are yielding positive results, with early-stage delinquencies dropping significantly.
• The relationship with Jaris, an embedded finance partner, has expanded, allowing INBK to retain all loan originations going forward, which is expected to enhance net interest income.
• The bank is focusing on capital-efficient growth, particularly in sectors like construction, investor commercial real estate, and wealth advisory lending.

3. Forward Guidance and Outlook:

• Earnings Per Share (EPS) Forecast: Maintained at $2.35 to $2.45 for the full year.
• Loan Growth Expectation: Revised to approximately 4% to 6% for the year, with stronger pipelines anticipated in the second half.
• Net Interest Income Outlook: Expected to be between $141 million and $142 million, with a fully taxable equivalent net interest margin projected to reach 2.75% to 2.80% by Q4 2026.
• Provision for Credit Losses: Anticipated to improve sequentially, with a full-year estimate of $47 million to $48 million.

4. Bad News, Challenges, or Points of Concern:

• The bank continues to face challenges with its franchise finance portfolio, which has seen elevated charge-offs and non-accrual loans.
• There is ongoing uncertainty in the macroeconomic environment, which could impact future performance.
• While credit trends are improving, the bank remains cautious about potential future issues arising from loans originated in the 2021 to 2023 vintages.

5. Notable Q&A Insights:

• Management expressed confidence that they have addressed most issues within the SBA portfolio and expect better performance from recent vintages.
• The bank is strategically replacing higher-cost CDs with lower-cost fintech deposits, which is expected to positively impact net interest income.
• There is a focus on quality over quantity in small business lending, with plans to ramp up volume judiciously as underwriting processes improve.
• Management emphasized the importance of proactive communication with borrowers to mitigate potential losses and enhance recovery rates.

Overall, First Internet Bancorp reported a strong quarter with significant improvements in credit quality and operational efficiency, while maintaining a cautious outlook amid ongoing economic uncertainties.