First Internet Bancorp Announces Third Quarter Earnings

http://www.businesswire.com/news/home/20091104006032/en

INDIANAPOLIS--(Business Wire)--
First Internet Bancorp ("Bancorp"), the parent company of First Internet Bank of
Indiana ("Bank"), today announced a net loss of $208,806 for the quarter ended
September 30, 2009, resulting in a year-to-date net loss of $154,504.

"This quarter`s results are mixed," said David B. Becker, Chairman and CEO. "On
the positive side, our non-interest income and net interest income have improved
considerably. However, our provision for loan losses more than offset those
gains. We have remained disciplined with our controllable expenses, but credit
losses eroded earnings."

* Net interest income and non-interest income increased over 2008 levels on a
comparative basis for both the quarter as well as year-to-date. Net interest
income and non-interest income year-to-date increased from the previous year by
$1,003,599, or 11%, and $481,680, or 22%, respectively. Gains in non-interest
income were fueled by increased mortgage loan activity and the sale of those
loans into the secondary market.
* Year-to-date non-interest expenses have increased $993,832 over 2008 levels,
primarily due to increases in Federal Deposit Insurance Corporation (FDIC)
premiums. Current year expenses include a $251,250 special assessment from the
FDIC that was paid on September 30, 2009. In addition to the special assessment,
the Bancorp`s ongoing quarterly FDIC insurance premiums increased $366,429, or
141%, over the previous year. Third quarter results also include the recognition
of a $200,000 pretax loss related to other-than-temporary-impairment on a $2
million par value trust preferred security within the Bancorp`s investment
portfolio. This is the only write-down the Bancorp has taken on its investment
portfolio in 2009.
* Provision expense remained elevated and therefore substantially reduced
Bancorp profitability. Year-to-date provision expense of $6.1 million represents
a $2.8 million, or 84%, increase over 2008 levels. Through the first three
quarters of 2009, the provision has exceeded net charge-offs by $1.4 million.
The formula used to determine the loan loss reserve is largely driven by a
rolling average of net charge-offs but also includes qualitative considerations
for the potential negative impact of economic factors, such as unemployment,
which are outside of the Bancorp`s control. As a result, the Bancorp has
increased its loan loss reserve to 1.82% of outstanding loans, up from 1.27% a
year ago.

"While there are indications that the nation`s economy may be starting to
recover, loan losses remain elevated at First Internet Bancorp," said Becker.
"We have responded accordingly by increasing the reserve. We have tightened our
requirements for loan approvals given this challenging economy but also
recognize that economic recovery and improvement in the Bancorp`s earnings will
not occur unless we continue to make loans. Throughout this economic crisis, we
have continued to add high quality loan assets."

Becker also noted the Bancorp has strengthened its capital position during 2009
by reducing the total assets and adding substantial amounts to the loan loss
reserve. At September 30, 2009, the Bank`s leverage ratio of 7.97% exceeded
regulatory guidelines of 5% for well capitalized status. The Bancorp withdrew
its application for, and therefore did not accept, TARP funds.

Selected Balance Sheet Information

September 30
2008 2009
(Unaudited1) (Unaudited1)

Cash Equivalents 6,848,579 3,012,673
Investment Securities 168,207,017 153,955,491
Loans, net of Reserve 327,444,015 331,693,243
Bank owned life insurance 7,193,655 7,497,196
Goodwill 4,687,349 4,687,349
Other Assets 9,127,075 6,573,802

Total Assets 523,507,690 507,419,754

Deposits 422,332,707 411,030,235
FHLB Advances 57,000,000 46,700,000
Other Liabilities 1,283,846 1,633,100
Shareholder's Equity 42,891,137 48,056,419

Total Liabilities & Equity 523,507,690 507,419,754

Selected Income Statement Information

Quarter Ended September 30
2008 2009
(Unaudited1) (Unaudited1)

Net Interest Income 3,214,515 3,669,408
Non-Interest Income 715,821 773,742
Provision for Loan Losses (1,286,348 ) (2,551,787 )
Non-Interest Expense (2,142,122 ) (2,468,362 )

Net Income/(Loss) Before Taxes 501,866 (576,999 )

Tax (Expense)/Benefit (39,999 ) 368,193

Net Income/(Loss) 461,867 (208,806 )

Income/(Loss) per share:
Basic 0.25 (0.11 )

Weighted average of shares outstanding:
Basic 1,877,531 1,891,460

Nine Months Ended September 30
2008 2009
(Unaudited1) (Unaudited1)

Net Interest Income 9,009,603 10,013,202
Non-Interest Income 2,173,784 2,655,464
Provision for Loan Losses (3,295,420 ) (6,060,299 )
Non-Interest Expense (6,600,609 ) (7,594,441 )

Net Income/(Loss) Before Taxes 1,287,358 (986,074 )

Tax (Expense)/Benefit (18,170 ) 831,570

Net Income/(Loss) 1,269,188 (154,504 )

Income/(Loss) per share:
Basic 0.68 (0.08 )

Weighted average of shares outstanding:
Basic 1,877,531 1,891,460

About First Internet Bancorp

First Internet Bancorp (OTCBB: FIBP), the parent company of First Internet Bank
of Indiana, is privately capitalized with over 250 private and corporate
investors. The Bancorp became effective March 21, 2006.

About First Internet Bank

With over $500 million in assets, First Internet Bank of Indiana (First IB) is
the first state-chartered, FDIC-insured institution to operate solely via the
Internet and has customers in all 50 states. Deposit services include checking
accounts, regular and money market savings accounts with industry-leading
interest rates, CDs and IRAs. First IB also offers consumer loans, conforming
mortgages, jumbo mortgages, and home equity loans and lines of credit. First IB
is a wholly owned subsidiary of First Internet Bancorp.

1 Financial results for the Bancorp are audited by external accountants on an
annual basis; however, external auditors are not engaged to review quarterly or
year-to-date information.

First Internet Bancorp
Nicole Lorch, 317-532-7906

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