First Internet Bank Of Indiana Announces 2002 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
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
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.