First Internet Bancorp Reports $41.6 Million Net Loss in Q3 2025

First Internet Bancorp reported a significant financial downturn in its latest quarterly results, with a net loss of $41.6 million, or $4.76 per diluted share, for the third quarter of 2025. This marks a stark contrast to the net income of $7.0 million, or $0.80 per diluted share, recorded in the same period last year. For the nine months ending September 30, 2025, the company also reported a net loss of $40.5 million, compared to a net income of $17.9 million for the same period in 2024. The substantial decline in profitability is attributed primarily to a dramatic increase in the provision for credit losses, which surged by 926.2% to $34.4 million in the third quarter, alongside a significant loss on the sale of single tenant lease financing loans.

The company's total assets decreased to $5.6 billion as of September 30, 2025, down from $5.7 billion at the end of 2024. This decline was largely driven by a reduction in loan balances, particularly due to the sale of $836.9 million in single tenant lease financing loans, which resulted in a pre-tax loss of $37.8 million. Total loans stood at $3.6 billion, reflecting a 13.6% decrease from the previous year, with commercial loans decreasing by 16.5%. Despite these challenges, First Internet Bancorp saw an increase in net interest income, which rose by 39.5% to $30.4 million for the third quarter, driven by higher interest income from loans and securities.

Operationally, the bank's customer base and engagement metrics showed mixed results. The number of noninterest-bearing deposits increased significantly, reflecting a 78.5% rise, while total deposits slightly decreased by 0.3% to $4.9 billion. The bank's allowance for credit losses also increased to $59.9 million, representing 1.66% of total loans, up from 1.07% at the end of 2024. The increase in nonperforming loans, which rose to $53.3 million, or 1.48% of total loans, further underscores the challenges faced by the bank in managing credit risk.

Looking ahead, First Internet Bancorp is focused on improving its regulatory capital ratios and interest rate risk profile following the loan sale. The company anticipates that this strategic move will enhance key profitability metrics in future periods. Additionally, the bank's management remains committed to exploring new revenue generation channels and partnerships, particularly with fintech companies, to diversify its offerings and strengthen its market position. The outlook remains cautious, with management acknowledging the potential for continued volatility in the economic environment and its impact on the bank's performance.