First Internet Bank Of Indiana Announces Third Quarter Earnings

Released on October 31, 2005

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First Internet Bank of Indiana (First IB) today announced net income of $493,588 for the quarter ended September 30, 2005, comparable to the results reported from the same quarter in the previous year.

As of September 30, 2005, First IB held $319.5 million in deposits, a 2% increase over deposits as of September 30, 2004.  The Bank’s total assets grew by $27 million, or 7%, as compared to the same quarter in the previous year.

“Modest balance sheet growth in recent quarters is a deliberate action on the part of the Bank,” noted David B. Becker, Chairman and CEO of First IB.  “A flat yield curve creates serious margin pressures.  Our short-term cost of funds has climbed through interest rate increases on our checking and savings accounts, yet these increases are not proportionately offset by income yields on our asset portfolios. As economic conditions improve, the Bank will be able to utilize its balance sheet capacity for more profitable growth through continued loan originations.”

To assist in efficiently originating and servicing these loans, the Bank has implemented a new loan origination system, streamlining several of the Bank’s existing processes.

“First IB is working to improve its overall return on assets through profitable asset growth and increasing non-interest income sources,” stated Mr. Becker.  “We’re not looking to grow the size of the balance sheet just for the sake of saying we’re a larger institution.”

Selected Balance Sheet Information
September 30, 2004
September 30, 2005
Cash Equivalents 22,403,799 11,730,258
Investment Securities 100,380,823 95,473,454
Loans, net of Reserve 264,975,687 301,011,276
Other Assets 4,174,147 10,483,553
Total Assets 391,934,456 418,698,541
Deposits 313,128,104 319,488,000
FHLB Advances 36,200,000 54,700,000
Other Liabilities 1,020,477 1,312,216
Shareholder’s Equity 41,585,875 43,198,325
Total Liabilities & Equity 391,934,456 418,698,541


Selected Income Statement Information

Quarter Ended Sept 30, 2004
Quarter Ended Sept 30, 2005 (Unaudited) Nine Months Ended Sept 30, 2005 (Unaudited)
Net Interest Income 2,393,030 2,262,691 6,909,342
Non-Interest Income 181,661 312,732 891,725
Provision for Loan and Lease Losses (644,418) (478,987) (1,364,956)
Non-Interest Expense (1,215,221) (1,419,098) (4,059,199)
Net Income Before Taxes 715,052 677,338 2,376,912
Tax Expense (219,054) (183,750) (688,923)
Net Income 495,998 493,588 1,687,989
Income per share:
Basic 0.25 0.24 0.84
Weighted average of shares outstanding:
Basic 2,015,018 2,019,946 2,019,946

With $419 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 350 private and corporate investors.


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