First Internet Bancorp reported a significant decline in financial performance for the second quarter of 2025, with net income falling to $193,000, or $0.02 per diluted share, compared to $5.8 million, or $0.67 per diluted share, in the same period last year. For the first half of 2025, net income was $1.1 million, down from $11.0 million in the first half of 2024. The decrease in profitability was primarily attributed to a substantial increase in the provision for credit losses, which rose by 237.6% to $13.6 million in the second quarter, and a 49.6% drop in noninterest income, which totaled $5.6 million.
Total assets increased by 5.8% to $6.1 billion as of June 30, 2025, driven by a rise in deposits, which reached $5.3 billion, up 7.4% from the end of 2024. The growth in deposits was largely due to fintech partnerships, which provided liquidity for loan growth and securities purchases. The company’s loan portfolio also expanded, with total loans increasing by 4.6% to $4.4 billion, supported by growth in commercial loans, particularly in the investor commercial real estate and small business lending sectors.
Operationally, First Internet Bancorp saw a notable increase in net interest income, which rose by 31.2% to $28.0 million in the second quarter, reflecting a 14.0% increase in total interest income. The net interest margin improved to 1.96% from 1.67% year-over-year, aided by a favorable shift in the composition of interest-earning assets. However, the company faced challenges in noninterest income, particularly from a decrease in gains on the sale of loans, which fell significantly due to a strategic decision to hold SBA loans longer before selling.
Looking ahead, First Internet Bancorp remains cautious about the economic environment, particularly regarding credit quality and potential impacts from rising interest rates. The company has indicated that it will continue to focus on managing its loan portfolio and enhancing its fintech partnerships to drive growth. The outlook for the remainder of 2025 will depend on the effectiveness of these strategies and the overall economic conditions affecting the banking sector.
About First Internet Bancorp
First Internet Bancorp is a bank holding company based in Indiana, operating through its wholly-owned subsidiary, First Internet Bank of Indiana. It provides digital banking services, including consumer, small business, and municipal banking products, primarily via online channels nationwide. The company specializes in commercial lending, public finance, and fintech partnerships, emphasizing innovation, community involvement, and a strong digital platform to serve entrepreneurs and diverse customer segments.
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