First Internet Bank of Indiana (First IB) today announced net income of $517,689 for the quarter ended June 30, 2005 bringing the year-to-date period to a total net income of approximately $1.2 million. Net income increased $144,638, or 39%, 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 increasing rates and consistent growth in indirect consumer installment lending. First IB’s net loan portfolio grew by $45.2 million, or 18%, as compared to the same quarter in the previous year. Based on this growth, First IB proportionately increased its provision expense for loan and lease losses by $83,944, or 15%, over 2004 levels, partially offsetting the positive variance in net interest income. “First IB’s results from operations continue to improve as we grow; however, due to the underlying collateral for consumer installment lending, there is an implied increase in the risk of losses related to these loans prompting us to reserve accordingly,” said David B. Becker, Chairman and CEO of First Internet Bank of Indiana.
The Bank has also increased its levels of non-interest income by $124,708, or 73%, as compared to the same quarter in the previous year. The Bank obtained bank owned life insurance at the end of 2004 which has contributed an additional $61,407 thousand to the Bank’s non-interest income recognized. In addition, non-interest income has increased by $25,008 over the prior year as a result of implementing additional services for its customers.
As of June 30, 2005, First IB held $316.7 million in deposits, a 9% increase over deposits as of June 30, 2004. With the increased size of the Bank, both in loans and deposits, non-interest expenses have increased by $136,079, or 12%, over 2004 levels. However, the Bank expects that its expense levels will remain significantly below those of traditional “brick and mortar” financial institutions of similar size. “The Bank will always search for ways to streamline its processes and generate greater efficiencies in an effort to further reduce overhead expenses,” said Mr. Becker.
| Selected Balance Sheet Information | |||
| June 30 | |||
| 2004 (Unaudited) |
2005 (Unaudited) |
||
| Cash Equivalents | 10,983,342 | 4,650,943 | |
| Investment Securities | 103,672,245 | 104,074,743 | |
| Loans, net of Reserve | 251,527,149 | 296,767,104 | |
| Bank Owned Life Insurance | 0 | 6,310,707 | |
| Other Assets | 4,508,057 | 3,884,284 | |
| Total Assets | 370,690,793 | 415,687,781 | |
| Deposits | 290,380,208 | 316,692,524 | |
| FHLB Advances | 38,565,000 | 54,700,000 | |
| Other Liabilities | 1,420,339 | 1,336,318 | |
| Shareholder’s Equity | 40,325,246 | 42,958,939 | |
| Total Liabilities & Equity | 370,690,793 | 415,687,781 | |
| Selected Income Statement Information | |||
| Quarter Ending June 30 |
|||
| 2004 (Unaudited) |
2005 (Unaudited) |
||
| Net Interest Income | 2,033,930 | 2,311,981 | |
| Non-Interest Income | 171,953 | 296,661 | |
| Provision for Loan and Lease Losses | (548,992) | (632,936) | |
| Non-Interest Expense | (1,102,153) | (1,238,232) | |
| Gain (Loss) on Sale of Investments | (24,394) | 5,445 | |
| Net Income Before Taxes | 530,344 | 742,919 | |
| Tax Expense | (157,293) | (225,230) | |
| Net Income | 373,051 | 517,689 | |
| Income per share: | |||
| Basic | 0.19 | 0.26 | |
| Weighted average of shares outstanding: | |||
| Basic | 2,013,603 | 2,019,049 | |
With $415 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.