First Internet Bancorp : Fourth Quarter 2020 Financial Results Presentation

Financial Results

Fourth Quarter 2020

Forward-Looking Statements & Non-GAAP Financial Measures

This presentation may contain forward-looking statements with respect to the financial condition, results of operations, trends in lending policies, plans, objectives, future performance or business of the Company. Forward-looking statements are generally identifiable by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "optimistic," "pending," "plan," "position," "preliminary," "remain," "should," "will," "would" or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the information in the forward-looking statements. The COVID-19 pandemic continues to impact general business and economic conditions as well as our customers, counterparties, employees, and third-party service providers. Continued uncertainty in market conditions could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. The ultimate magnitude and duration of the pandemic is still unknown at this time, therefore, the extent of the impact on our business, financial position, results of operations, liquidity and prospects remains uncertain. Other factors that may cause such differences include: failures or breaches of or interruptions in the communications and information systems on which we rely to conduct our business; failure of our plans to grow our commercial real estate, commercial and industrial, public finance, SBA and healthcare finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; fluctuations in interest rates; general economic conditions; risks relating to the regulation of financial institutions; and other factors identified in reports we file with the U.S. Securities and Exchange Commission. All statements in this press release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

This presentation contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). Non-GAAP financial measures, specifically tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, average tangible common equity, return on average tangible common equity, total interest income - FTE, net interest income - FTE, net interest margin - FTE, allowance for loan losses to loans, excluding PPP loans, adjusted income before income taxes, adjusted income tax provision (benefit), adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders' equity, adjusted return on average tangible common equity and adjusted effective income tax rate are used by the Company's management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non- GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption "Reconciliation of Non-GAAP Financial Measures."

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Fourth Quarter 2020 Highlights

Earnings

Key Operating

Trends

Disciplined

Balance Sheet

Management

Liquidity and

Capital

• Record diluted EPS of $1.12
• Record quarterly net income of $11.1 million
• Total revenue of $31.5 million, up 9.7% from 3Q20 and 51.7% from 4Q19
• Cost of interest-bearing deposits declined 22 bps from 3Q20 to 1.29%
• FTE net interest margin increased 24 bps to 1.91%1
• Allowance for loan losses / total loans, excluding PPP, increased to 0.98%1
• Asset quality remained stable with NPAs to total assets of 0.24%
• Portfolio loan balances increased by $46.3 million, or 1.5% from 3Q20
• SBA loan sales contributed $3.5 million of fee revenue
• Sold $7.4 million of public finance loans at a gain of $0.2 million
• Deposit balances down 3.0% due to declines in CDs and brokered deposits
• Regulatory capital ratios increased from 3Q20 and remain strong
• Continued strong on- and off-balance sheet liquidity to manage impact of COVID-19 environment

1 See Reconciliation of Non-GAAP Financial Measures in the Appendix

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Meaningful Outperformance vs. Peers

Deposit Cost Change1

(in bps)

		Deposit
		costs
		declined
		106 bps
		Y-o-Y in
-53		4Q20
	-86	-89
$3 - $7bn	Top quartile	INBK
asset banks

Revenue % Change1

36%	38%
Revenue
	rose 52%
	Y-o-Y in
	4Q20
11%

$3 - $7bn	Top quartile	INBK
asset banks

Source: S&P Global Market Intelligence

1. Change from 3Q19 - 3Q20; Orange indicates median of publicly traded $3-$7bn asset U.S. banks, green represents top quartile; peer data includes FTE net interest margin data if available
2. Change from 12/31/2019 - 12/31/2020; Orange indicates median of publicly traded $3-$7bn asset U.S. banks, green represents top quartile

Net Interest Margin Change1

(in bps)

2
-3	FTE NIM
expanded
	24 bps
	in 4Q20
-40

$3 - $7bn	Top quartile	INBK
asset banks

Share Price % Change2

21%

-5%

-21%

$3 - $7bn	Top quartile	INBK
asset banks

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