First Internet Bank of Indiana (First IB) today announced net income of $676,712 for the quarter ended March 31, 2005. Net income increased $135,551, or 25%, from the same quarter in the previous year.
The primary driver of the overall earnings increase was an increase in net interest income, fueled by higher rates and considerable growth in indirect consumer installment lending. First IB’s net loan portfolio grew by $69.1 million, or 32%, as compared to the same quarter in the previous year. “First IB has become a presence in the indirect lending market – in the Bank’s home state of Indiana and throughout the Midwest,” said David B. Becker, Chairman and CEO of First Internet Bank of Indiana.
Considering the Bank’s loan growth, First IB proportionately increased its provision expense for loan and lease losses in order to maintain the strength of the balance sheet. Provision expense was increased by $54,275, or 27%, over 2004 levels, partially offsetting the positive variance in net interest income.
As of March 31, 2005, First IB held $347.3 million in deposits, a 23% increase over deposits as of March 31, 2004. With the increased size of the Bank, both in loans and deposits, non-interest expenses have increased by $197,104, or 16%, over 2004 levels. However, the Bank’s expense levels 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 2004 calendar year, First IB reported a ratio of overhead expenses to average assets of 1.25%, whereas its peer group reported a ratio of 2.90%. “The Internet bank model promises reduced overhead expenses, which translate into extremely competitive rates and reduced fees to consumers,” said Mr. Becker. “First IB continually demonstrates it is possible to deliver on that promise while operating profitably.”
| Selected Balance Sheet Information | |||
| March 31 | |||
| 2004 (Unaudited) |
2005 (Unaudited) |
||
| Cash Equivalents | 3,801,195 | 12,592,833 | |
| Investment Securities | 127,001,864 | 111,196,055 | |
| Loans, net of Reserve | 217,375,412 | 286,480,156 | |
| Bank Owned Life Insurance | 0 | 6,249,300 | |
| Other Assets | 4,005,250 | 3,922,032 | |
| Total Assets | 352,183,721 | 420,440,376 | |
| Deposits | 283,365,535 | 347,261,995 | |
| FHLB Advances | 26,200,000 | 29,700,000 | |
| Other Liabilities | 1,127,038 | 1,264,210 | |
| Shareholder’s Equity | 41,491,148 | 42,214,171 | |
| Total Liabilities & Equity | 352,183,721 | 420,440,376 | |
| Selected Income Statement Information | |||
| March 31 | |||
| 2004 (Unaudited) |
2005 (Unaudited) |
||
| Net Interest Income | 1,964,854 | 2,334,671 | |
| Non-Interest Income | 222,223 | 282,332 | |
| Provision for Loan and Lease Losses | (198,757) | (253,032) | |
| Non-Interest Expense | (1,209,409) | (1,406,513) | |
| Gain (Loss) on Sale of Investments | 23,409 | (802) | |
| Net Income Before Taxes | 802,320 | 956,656 | |
| Tax Provision | (261,159) | (279,944) | |
| Net Income | 541,161 | 676,712 | |
| Income per share: | |||
| Basic | 0.27 | 0.34 | |
| Weighted average of shares outstanding: | |||
| Basic | 2,013,116 | 2,018,154 | |
With $420 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 400 private and corporate investors.