INDIANAPOLIS, IN April 24, 2006- First Internet Bank of Indiana (First IB) today announced net income of $522,753 for the quarter ended March 31, 2006. Net income decreased $153,959, or 23%, from the same quarter in the previous year.
Management attributed the negative variance in net income to two factors: Legal expenses (included under “non-interest expense”) surrounding the formation of the banking holding company and an increase in the provision expense for loan and lease losses.
Legal expenses surrounding the formation of First Internet Bancorp, effective March 21, 2006, caused non-interest expenses to increase by $235,623, or 17%, over 2005 levels.
First IB’s net loan portfolio grew by $9.5 million, or 3%, as compared to the same quarter in the previous year. Considering the Bank’s loan growth and its change in loan mix – the Bank’s loan portfolio now contains a greater percentage of higher yielding consumer installment loans than in the past – First IB increased its provision expense by $168,657, or 67%, over 2005 levels.
Expense levels at First IB remain well below those of traditional “brick and mortar” financial institutions of similar size. According to the Federal Financial Institutions Examination Council’s (FFIEC) Uniform Bank Performance Report for the 2005 calendar year, First IB reported a ratio of overhead expenses to average assets of 1.28%, whereas its peer group reported a ratio of 2.86%.
“The Internet bank model provides for reduced overhead expenses, which translates into extremely competitive rates and reduced fees to consumers,” said David Becker, Chairman and CEO of First Internet Bank of Indiana.
As of March 31, 2006, First IB held $330 million in deposits, a 5% decrease from deposits held as of March 31, 2005, primarily a result of withdrawals made by a single large depositor.
| Selected Balance Sheet Information | |||
| March 31, 2005 (Unaudited) | March 31, 2006 (Unaudited) | ||
| Cash Equivalents | 12,592,833 | 15,578,972 | |
| Investment Securities | 111,196,055 | 109,455,447 | |
| Loans, net of Reserve | 286,480,156 | 296,003,138 | |
| Other Assets | 3,922,032 | 12,583,824 | |
| Total Assets | 420,440,376 | 433,621,381 | |
| Deposits | 347,261,995 | 329,952,346 | |
| FHLB Advances | 29,700,000 | 58,700,000 | |
| Other Liabilities | 1,264,210 | 3,220,558 | |
| Shareholder’s Equity | 42,214,171 | 41,748,477 | |
| Total Liabilities & Equity | 420,440,376 | 433,621,381 | |
|
Selected Income Statement Information |
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Quarter Ending March 31 |
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|
2005 |
2006 |
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| Net Interest Income |
2,334,671 |
2,453,127 |
|
| Non-Interest Income |
282,332 |
311,334 |
|
| Provision for Loan and Lease Losses |
(253,032) |
(421,689) |
|
| Non-Interest Expense |
(1,407,315) |
(1,642,938) |
|
| Net Income Before Taxes |
956,656 |
699,834 |
|
| Tax Expense |
(279,944) |
(177,081) |
|
| Net Income |
676,712 |
522,753 |
|
With $430 million in assets, First Internet Bank of Indiana is the first state-chartered, FDIC-insured institution to operate solely via the Internet and has customers in all 50 states. Services include interest-bearing checking accounts, regular and money market savings accounts with industry-leading interest rates, CDs, IRAs, credit cards, and check cards that can be used instead of cash or checks. First IB also offers personal lines of credit, installment loans, unique real-time transfers between accounts, and the ability to display checking, savings and loan information on a single screen. First IB is a privately capitalized institution with over 300 private and corporate investors.