First Internet Bancorp — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue reached a record $43.9 million, a 7% increase quarter-over-quarter and 1% increase compared to adjusted revenue in the prior year period.
• Net interest income increased 7% quarter-over-quarter to $34.7 million and 14% year-over-year.
• Noninterest income was $9.2 million, up 6% from the prior quarter but down 30% from adjusted noninterest income in the prior year period.
• Diluted earnings per share (EPS) were $0.54, compared to $0.27 in the prior quarter and $(4.76) in the prior year period.
• Adjusted diluted EPS was $0.57, up significantly from the prior quarter and prior year period.
• Net income was $4.8 million, compared to $2.4 million in the prior quarter and a loss of $41.6 million in the prior year period.
• Pre-provision net revenue (PPNR) grew 14% quarter-over-quarter to $17.1 million (adjusted), though down 6% from the prior year adjusted period.
• Net interest margin (NIM) expanded 8 basis points to 2.47% quarter-over-quarter and 43 basis points year-over-year.
• Fully-taxable equivalent (FTE) net interest margin increased to 2.55%, up 8 basis points from the prior quarter and 53 basis points from the prior year.
• Provision for credit losses was $11.6 million, a 13% decrease from $13.4 million in the second quarter of 2026.
• Net charge-offs to average loans declined to 0.82% from 1.77% in the prior quarter.
• Total loan balances were $3.9 billion, up $52.9 million (1%) from the second quarter of 2026.
• Total deposits were $5.2 billion, up $321.4 million (7%) from the second quarter of 2026.
• The cost of interest-bearing deposits declined to 3.32%, down 6 basis points from the prior quarter and 55 basis points from the prior year.
• Nonperforming loans (NPLs) to total loans were 1.63%, compared to 1.58% in the prior quarter.
• Allowance for credit losses (ACL) to total loans was 1.48%, compared to 1.39% in the prior quarter.
• Tangible common equity to tangible assets was 5.94%.
• Common equity tier 1 (CET1) capital ratio was 8.86%, and total capital ratio was 12.32%.
• Tangible book value per common share was $40.04, down from $41.09 in the prior quarter.

Guidance and Future Outlook:

• Fourth quarter 2026 diluted EPS guidance is $1.02 to $1.07.
• FTE net interest margin guidance for Q4 2026 is 2.75% to 2.80%, assuming an additional 25 basis point increase in the Fed Funds rate in December.
• FTE net interest income for Q4 2026 is projected at around $38.5 million.
• Noninterest income for Q4 2026 is expected to be around $7.5 million, reflecting lower small business lending originations and gain on sale activity, partially offset by continued fintech revenue growth.
• Noninterest expense for Q4 2026 is projected at around $26.5 million.
• Provision for credit losses for Q4 2026 is expected to be between $7.5 million and $8.0 million.

Business Segments and Product Lines:

• Loan portfolio yield increased 8 basis points to 6.42% quarter-over-quarter.
• Strong quarterly growth was observed in investor commercial real estate, single tenant lease financing, wealth advisory lending, and embedded finance.
• Previously exited, lower-yielding portfolios continued to run off.
• Fintech partnerships revenue contributed to net interest income growth from embedded finance and noninterest income growth, with fintech fee revenue up 13% from the prior quarter.
• The growing fintech deposit base allowed the retirement of higher-cost CDs and brokered deposits.
• Approximately $2.9 billion of fintech deposits are held off-balance sheet in a deposit network.
• Specific reserves of $2.6 million were taken on franchise finance loans placed on nonaccrual, including one large relationship.
• Interest reversals related to franchise finance loans on nonaccrual totaled $1.2 million during the quarter.

Market and Competitive Landscape:

• The company continues to execute a strategy to re-mix the loan portfolio toward core verticals with higher new origination yields.
• Emerging verticals such as embedded finance and wealth advisory lending are identified as having exciting long-term growth potential.
• The company invests in automation and AI-enabled tools across lending and servicing operations to improve efficiency.
• Loan pipelines in scalable core lending areas are described as robust.

Risks and Challenges:

• Provision for credit losses included specific reserves related to franchise finance loans placed on nonaccrual, including one large relationship.
• Net interest margin was impacted by 9 basis points due to interest reversals on nonaccrual loans.
• Nonperforming loans to total loans increased to 1.63% from 1.58% in the prior quarter, primarily due to franchise finance loans moved to nonaccrual.
• The company recognized $0.4 million in pre-tax non-recurring severance costs during the quarter.
• Forward-looking statements note risks including general economic conditions, credit quality, value and salability of real estate collateral, and potential system failures.

Management Commentary and Tone:

• David Becker, Chairman and CEO, stated that third-quarter results reflect continued execution of strategy with earnings momentum building.
• Management highlighted record net interest income, continued NIM expansion, and solid fee revenue growth as drivers of positive operating leverage.
• CEO noted that underlying earnings strength allowed the company to absorb the provision impact from the franchise finance relationship and still produce strong quarterly growth.
• Management expressed confidence in the ability to build on momentum and deliver long-term value for shareholders moving into Q4 2026 and 2027.
• The tone indicates a focus on accelerating earnings and stronger profitability through portfolio optimization and technology investments.

Other Key Points:

• The company will host a conference call and webcast on October 29, 2026, at 5:00 p.m. Eastern Time.
• Dividends declared per share were $0.06 for the quarter.
• The company is a component of the Russell 2000® Index.
• Total assets were $5.9 billion as of September 30, 2026.
• The loan-to-deposit ratio was 75%.
• NPLs to total loans excluding fully-guaranteed balances were 1.14%, up from 1.07% in the prior quarter.
• ACL to NPLs was 91%, or 131% excluding fully-guaranteed balances.
• The company operates as a branchless delivery of banking services pioneer, offering consumer, small business, commercial real estate, and specialty finance services.