ABOUT THE BANK

04.24.06

First Internet Bank of Indiana Announces First Quarter Earnings

INDIANAPOLIS, IN April 24, 2006- First Internet Bank of Indiana (First IB) today announced net income of $522,753 for the quarter ended March 31, 2006. Net income decreased $153,959, or 23%, from the same quarter in the previous year.

Management attributed the negative variance in net income to two factors: Legal expenses (included under “non-interest expense”) surrounding the formation of the banking holding company and an increase in the provision expense for loan and lease losses.

Legal expenses surrounding the formation of First Internet Bancorp, effective March 21, 2006, caused non-interest expenses to increase by $235,623, or 17%, over 2005 levels. 

First IB’s net loan portfolio grew by $9.5 million, or 3%, as compared to the same quarter in the previous year.  Considering the Bank’s loan growth and its change in loan mix – the Bank’s loan portfolio now contains a greater percentage of higher yielding consumer installment loans than in the past – First IB increased its provision expense by $168,657, or 67%, over 2005 levels.

Expense levels at First IB 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 2005 calendar year, First IB reported a ratio of overhead expenses to average assets of 1.28%, whereas its peer group reported a ratio of 2.86%. “The Internet bank model provides for reduced overhead expenses, which translates into extremely competitive rates and reduced fees to consumers,” said David Becker, Chairman and CEO of First Internet Bank of Indiana. 

As of March 31, 2006, First IB held $330 million in deposits, a 5% decrease from deposits held as of March 31, 2005, primarily a result of withdrawals made by a single large depositor.

Selected Balance Sheet Information

 
 

March 31, 2005 (Unaudited)

   

March 31, 2006 (Unaudited)

 

Cash Equivalents

12,592,833

 

15,578,972

Investment Securities

111,196,055

 

109,455,447

Loans, net of Reserve

286,480,156

 

296,003,138

Other Assets

3,922,032

 

12,583,824

 

Total Assets

420,440,376

 

433,621,381

 
 

Deposits

347,261,995

 

329,952,346

FHLB Advances

29,700,000

 

58,700,000

Other Liabilities

1,264,210

 

3,220,558

Shareholder's Equity

42,214,171

 

41,748,477

 

Total Liabilities & Equity

420,440,376

 

433,621,381

 

Selected Income Statement Information

 

Quarter Ending March 31

 

2005
(Unaudited)

 

2006
(Unaudited)

 

Net Interest Income

2,334,671

 

2,453,127

Non-Interest Income

282,332

 

311,334

Provision for Loan and Lease Losses

(253,032)

 

(421,689)

Non-Interest Expense

(1,407,315)

 

(1,642,938)

 

Net Income Before Taxes

956,656

 

699,834

 

Tax Expense

(279,944)

 

(177,081)

 

Net Income

676,712

 

522,753

 

With $430 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 300 private and corporate investors.

.