First Internet Bancorp Reports $943,000 Net Income in Q1 2025, Down 81.8%

First Internet Bancorp reported a net income of $943,000, or $0.11 per diluted share, for the first quarter of 2025, a significant decline from the $5.2 million, or $0.60 per diluted share, recorded in the same period of 2024. This represents an 81.8% decrease in net income and an 81.4% drop in earnings per share. The decline was primarily attributed to a substantial increase in the provision for credit losses, which rose to $12.1 million from $2.6 million year-over-year, alongside a 12% increase in noninterest expenses. However, the bank did see a 21% increase in net interest income, which reached $25.1 million, and a 24.9% rise in noninterest income to $10.4 million.

In terms of operational metrics, total assets increased by 2% to $5.9 billion as of March 31, 2025, compared to $5.7 billion at the end of 2024. This growth was driven by a rise in deposits, which totaled $4.9 billion, reflecting a $12.4 million increase from the previous quarter. The bank's loan portfolio also expanded, with total loans rising to $4.3 billion, a 2% increase from the prior quarter. Notably, commercial loans increased by 2.7%, while consumer loans saw a slight decrease of 0.5%.

The bank's strategic focus on small business lending has positioned it as a significant player in the Small Business Administration (SBA) 7(a) loan program, where it closed $113.8 million in loans during the first quarter of 2025. This performance ranks First Internet Bancorp as the eighth largest SBA 7(a) lender for the fiscal year to date. The bank continues to enhance its product offerings through partnerships with financial technology companies, aiming to diversify revenue sources and improve customer engagement.

Despite the challenges faced in the first quarter, the bank's outlook remains cautiously optimistic. Management indicated that they are exploring strategic alternatives to enhance asset generation capabilities and are committed to maintaining sufficient liquidity and capital resources. The bank's capital ratios remain strong, with a common equity tier 1 capital ratio of 9.15% as of March 31, 2025, well above the regulatory minimum. The bank plans to continue paying dividends, having declared a cash dividend of $0.06 per share for the quarter, reflecting its ongoing commitment to returning value to shareholders.