Financial Corp has reported an impressive start to 2025, surpassing market expectations with a first-quarter revenue of $35.52 million. This figure significantly outpaced the consensus estimate of $26.73 million, showcasing the company's strong performance.
The firm's net interest income also demonstrated robust growth. For the first quarter of 2025, net interest income stood at $25.1 million, compared to $23.6 million in the previous quarter and $20.7 million in the same period last year. When assessed on a fully taxable equivalent basis, the net interest income reached $26.3 million, which marks an increase from $24.7 million in Q4 2024 and $21.9 million in Q1 2024.
This positive financial trajectory was attributed to the company's strategic focus on enhancing net interest margins and boosting core revenue growth. The gains were largely driven by higher yields on earning assets and lower funding costs. Additionally, the organization has been expanding its construction, commercial, industrial, and national SBA programs, which have contributed to consecutive quarterly increases in operating revenues and generated significant positive operating leverage for six quarters in a row.
The strong results underline Financial Corp's (ticker) effective strategy in navigating the financial landscape, with continued momentum in its key revenue streams.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for First Internet Bancorp (INBK, Financial) is $37.60 with a high estimate of $45.00 and a low estimate of $32.00. The average target implies an upside of 46.25% from the current price of $25.71. More detailed estimate data can be found on the First Internet Bancorp (INBK) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, First Internet Bancorp's (INBK, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for First Internet Bancorp (INBK, Financial) in one year is $37.21, suggesting a upside of 44.73% from the current price of $25.71. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the First Internet Bancorp (INBK) Summary page.
INBK Key Business Developments
Release Date: January 23, 2025
- Net Income: $25.3 million for the year, tripled compared to 2023.
- Diluted Earnings Per Share: $2.88 for the year, tripled compared to 2023.
- Annual Net Income: $87.4 million, up 17% year-over-year.
- Gain on Sale Revenue: Increased by over 60% year-over-year.
- Noninterest Income Growth: Up 81% from 2023.
- Total Adjusted Revenue Growth: Almost 30% year-over-year.
- Loan Growth: Balances increased by $330 million, a 9% rise over 2023.
- Net Interest Income (Q4 2024): Up 17% compared to Q4 2023.
- Net Income (Q4 2024): $7.3 million, up 5% from the previous quarter.
- Diluted Earnings Per Share (Q4 2024): $0.83, up 4% from the previous quarter.
- Net Charge-offs: $9.4 million, primarily related to the SBA portfolio.
- Nonperforming Loans to Total Loans: 68 basis points.
- Nonperforming Assets to Total Assets: 50 basis points.
- Average Balance of Deposits (Q4 2024): Increased by $344 million or 8%.
- Net Interest Margin (Q4 2024): 1.67%, up five basis points from the previous quarter.
- Noninterest Income (Q4 2024): $16 million, up 32.5% from the previous quarter.
- Allowance for Credit Losses: 1.07% of total loans at the end of Q4 2024.
- Tangible Common Equity Ratio: 6.62%, up eight basis points from the previous quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- First Internet Bancorp (INBK, Financial) reported a significant improvement in financial results for 2024, with net income and diluted earnings per share tripling compared to 2023.
- The company achieved strong loan growth, particularly in construction investor, commercial real estate, and small business lending, contributing to a 9% increase in balances over 2023.
- Net interest income increased for the fifth consecutive quarter, with an 8% rise in the fourth quarter of 2024 compared to the previous quarter.
- The SBA lending business had an outstanding year, driving noninterest income substantially higher and contributing to greater revenue diversification.
- First Internet Bancorp (INBK) maintained a solid liquidity position, allowing for significant paydown of federal home loan bank borrowings while continuing to optimize the balance sheet.
Negative Points
- The company recognized $9.4 million of net charge-offs in the fourth quarter, primarily related to the SBA portfolio, indicating some challenges in credit quality.
- Nonperforming loans increased, particularly in franchise finance and small business lending, although the company maintains that overall credit quality remains sound.
- The decline in gain on sale revenue was attributed to timing issues, as a large portion of SBA loan originations closed late in the quarter, delaying revenue recognition.
- Provision for credit losses increased significantly in the fourth quarter, reflecting elevated net charge-off activity and adjustments to the small business lending allowance for credit losses.
- The company anticipates continued charge-offs in the SBA portfolio, with a conservative approach to provisioning for credit losses in 2025.
