ABOUT THE BANK

02.25.03

First Internet Bank Of Indiana Announces Year-End Financial Results

First Internet Bank of Indiana (First IB) today announced net income of $2,446,197 for the year ended December 31, 2002, representing its second consecutive year of profitability and an 18% increase over the prior year. Total assets increased by $44.8 million (18%) over 2001 levels. Net interest income increased by $666,471 (11%) for the year, while non-interest expenses remained at prior year levels.

"In 2002, First IB achieved meaningful growth in several areas," said David B. Becker, Chairman and CEO of First IB. "At the same time, we held non-interest expenses flat through a continued effort to manage the Bank efficiently, ever mindful of the economic environment in which we operate."

In light of this environment, First IB increased its 2002 provision expense for loan and lease losses by $463,318 (49%) over the prior year in order to strengthen the balance sheet during a period of economic uncertainty. The additional expense is appropriate, as First IB increased net loans outstanding by $36.9 million (35%) during the period.
In 2002, First IB also recognized a one-time loss of $771,588 ($501,532 net of tax) related to the disposal of a $1 million par value investment in WorldCom, Inc.. Without the extraordinary loss from this bond, First IB's net income before taxes would have increased 49% from the prior year.

Net income for 2002 includes tax benefits net of current year tax expense of $1,397,227. These income tax benefits are derived from the Bank's net operating loss carryforwards and have now been fully recognized in the Bank's reported income.

Looking forward, Becker believes the prospects for the year ahead are strong. "We will follow the path that has led to our success. We will continue to control costs, of course, and we will strive to raise the standards in providing exemplary customer service," he affirmed. "It is no accident that we have developed a base of loyal customers with significant account balances. We have earned their trust by delivering on the promise of greater convenience in banking. We will keep their trust by serving them well."

Selected Balance Sheet Information

 
 

December 31

 

2001
(Audited)

   

2002
(Audited)

 

Cash Equivalents

14,399,533

 

9,410,198

Investment Securities

123,602,107

 

135,115,650

Loans, net of Reserve

105,353,221

 

142,260,094

Other Assets

3,460,720

 

4,832,499

 

Total Assets

246,815,581

 

291,618,441

 
 

Deposits

203,797,257

 

239,167,769

FHLB Advances

3,500,000

 

11,000,000

Other Liabilities

1,313,614

 

676,645

Shareholder's Equity

38,204,710

 

40,774,027

 

Total Liabilities & Equity

246,815,581

 

291,618,441



Selected Income Statement Information

 

December 31

 

2001
(Audited)

   

2002
(Audited)

 

Net Interest Income

5,995,083

   

6,661,554

Non-Interest Income

881,697

   

475,875

Provision for Loan and Lease Losses

(941,089)

   

(1,404,407)

Non-Interest Expense

(4,716,041)

   

(4,684,052)

 

Net Income Before Taxes

1,219,650

   

1,048,970

 

Tax Benefit

853,696

   

1,397,227

 

Net Income

2,073,346

   

2,446,197

       

Income per share:

 

 

 

Basic

1.04

 

1.22

Diluted

1.03

 

1.21

 

 

 

 

Weighted average of shares outstanding:

 

 

 

Basic

1,994,285

 

2,006,661

Diluted

2,015,280

 

2,017,731

With $292 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.