First Internet Bancorp : Third Quarter 2020 Investor Presentation

Investor Presentation

Third Quarter 2020

Forward-Looking Statements

This presentation may contain forward-looking statements with respect to the financial condition, results of operations, trends in lending policies, plans, objectives, future performance or business of the Company. Forward- looking statements are generally identifiable by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "outlook," "pending," "plan," "position," "preliminary," "remain," "should," "will," "would" or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the information in the forward-looking statements. The COVID-19 pandemic has resulted in deterioration of general business and economic conditions and continued to impact us, our customers, counterparties, employees, and third-party service providers. Sustained deterioration in market conditions could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. The ultimate magnitude and duration of the pandemic is still unknown at this time, therefore, the extent of the impact on our business, financial position, results of operations, liquidity and prospects remains uncertain. Other factors that may cause such differences include: failures or breaches of or interruptions in the communications and information systems on which we rely to conduct our business; failure of our plans to grow our commercial real estate, commercial and industrial, public finance, SBA and healthcare finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; fluctuations in interest rates; general economic conditions; risks relating to the regulation of financial institutions; and other factors identified in reports we file with the U.S. Securities and Exchange Commission. All statements in this presentation, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

2

Non-GAAP Financial Measures

This presentation contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). Non-GAAP financial measures, specifically tangible common equity, tangible assets, tangible common equity to tangible assets, net interest income - FTE, net interest margin - FTE, adjusted noninterest expense, adjusted noninterest expense/average assets, adjusted net income, adjusted diluted earnings per share, average tangible common equity, adjusted return on average assets, return on average tangible common equity, adjusted return on average tangible common equity, tangible book value per common share and allowance for loan losses to loans, excluding PPP loans are used by the Company's management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included on the slide at the end of this presentation entitled "Reconciliation of Non-GAAP Financial Measures."

3

A Pioneer in Branchless Banking

• Digital bank with unique business model and over 20 years of operations
• Highly scalable technology driven business
• Nationwide deposit gathering and asset generation platforms
• Attractive lending niches with growth opportunities
• History of strong growth and a clear pathway to greater profitability

$4.3B Assets

$3.0B Loans

$3.4B Deposits

4

Nationwide Branchless Deposit Franchise

$523.8 million

$3.4 Billion

$702.2 million

15.5%

Total Deposits*

20.8%$1,263.8 million

37.5%

		$593.1 million
$289.5 million
	17.6%
8.6%

• As of September 30, 2020; $168 million of brokered deposits and $1.7 million of balances in US territories/Armed Forces included in headquarters/Midwest balance

30.5% 5-year CAGR

Nationwide consumer, small business and commercial deposit base

Innovative technology and convenience supported by exceptional service

Digital business model minimized operational disruptions due to COVID-19

5

Multiple Opportunities to Grow Deposits

• Capitalize on the enduring trend toward branchless banking - consumers and small business are increasingly moving their banking business online, especially following the experience of COVID-19

 Generate an increased level of lower-cost deposits as expansion of small-business, municipal and commercial relationships continue

• Selectively target consumer deposits in tech-centric markets - building off success with Gen-Xers
• Draw on over 20 years of branchless banking experience to attract more customers with best practices such as dedicated online relationship bankers delivering a superior client experience

6

National and Regional Asset Generation Platform

DIVERSIFIED ASSET GENERATION PLATFORM

Commercial - National

• Single tenant lease financing
• Small business lending

 Public finance

• Healthcare finance (via relationship with Lendeavor)

Commercial - Regional

• C&I - Central Indiana
• C&I - Arizona
• Investor CRE - Central Indiana
• Construction - Central Indiana

Consumer - National

 Digital direct-to-consumer mortgages	 Specialty lending - horse trailers
	and RVs
	7

Small Business, Big Opportunity

• Complementary to existing business lines
• Diversifies revenue in a capital efficient manner
• Opportunities on both sides of the balance sheet

Enhanced Treasury	Upgraded Digital	SBA Lending
Management Capabilities	Account Access
	8

Entrepreneurial Culture Key to Success

First Internet Bank has been recognized for its innovation and is consistently ranked among the best banks to work for, enhancing its ability to attract and retain top talent

 American Banker's "Best Banks to Work For"
 Eight years in a row
 "Top Workplaces in Indianapolis" The Indianapolis Star
 Seven years in a row including being #8 in
2020, #1 in 2019, #4 in 2018 and #2 on the list
in 2017
 "Best Places to Work in Indiana"
 Five of last seven years
 "Best Small Business Checking Account" - Newsweek
ranking of "America's Best Banks 2021"
 Top Rated Online Business Bank in 2017 - Advisory
HQ
 TechPoint 2016 Mira Award "Tech-enabled Company
of the Year"
 Top 10 finalist - 2016 Indiana Public Company of the
year presented by the CFA Society and FEI
 Magnify Money ranked #1 amongst 2016 Best Banking
Apps (Banker's "Online Direct Banks")
 Mortgage Technology 2013 awarded top honors in the	9
Online Mortgage Originator category

Credit Update

• Loan deferral balances have moved significantly lower since peaking in late- May at $647.2 million
• • Loans on deferral are down to $19.9 million as of October 30 2020, or 0.7% of the total loan portfolio
• Significant reduction of single tenant lease financing and healthcare finance loans on deferral from earlier in the year
• • All borrowers coming off deferral programs have made October payments
  • As of October 31, 2020, deferrals in these portfolios declined to represent only 0.26% of the total loan portfolio.
• All other borrowers coming off deferral programs have resumed making scheduled loan payments without delinquency

10

Loan Deferral Summary

		Deferrals
	As of	As of	As of	As of	As of	As of
	April 17,	May 15,	June 19,	July 17,	August 28,	October 30,	% of Balances
(Dollars in millions)	2020	2020	2020	2020	2020	2020	with Deferrals1
Commercial and	$15.4	$15.9	$15.9	$1.7	$0.5	$0.7	0.9%
industrial
Single tenant lease	$11.8	$259.0	$273.7	$276.8	$27.8	$5.4	0.6%
financing
Owner-occupied CRE	$6.0	$16.2	$16.2	$19.3	$5.7	-	0.0%
Investor CRE	$0.0	$0.4	$0.4	$0.4	$0.4	-	0.0%
Healthcare finance	$289.1	$297.0	$192.0	$57.8	$7.7	$2.3	0.5%
Small business	$21.7	$23.7	$23.8	$1.8	-	$8.6	7.0%
Total commercial	$344.0	$612.2	$522.0	$357.8	$42.1	$17.0	0.7%
Residential mortgage	$8.9	$12.0	$10.2	$5.6	$2.2	$2.5	1.3%
Home equity	$0.3	$0.4	$0.4	$0.2	$0.1	-	0.0%
Other consumer	$7.8	$9.0	$4.6	$2.2	$0.8	$0.4	0.2%
Total consumer	$17.0	$21.4	$15.2	$8.0	$3.1	$2.9	0.5%
Total loans with	$361.0	$633.6	$537.2	$365.8	$45.2	$19.9	0.7%
deferrals
As a % of total loans	12.5%	21.9%	18.6%	12.6%	1.6%	0.7%

1 As of August 28, 2020

11

Near-term Profitability Drivers

• Continued deposit repricing opportunity combined with stabilized asset yields provides significant opportunity to increase net interest income and net interest margin
• • Annual interest expense savings in excess of $22 million expected for 2021
• Accelerated build-out of SBA platform is six months ahead of the original plan - sales and operations hiring increased due to competitor dislocation in the marketplace
• • SBA gain on sale revenue expected to be in the range of $12 million - $14 million for 2021
• Residential mortgage originations expected to remain strong in the continued low interest rate environment
• Continue to remain cautiously optimistic regarding the impact of the COVID-19 pandemic on the credit quality of the loan portfolio

12

Third Quarter 2020 Highlights

Earnings

Key Operating

Trends

Disciplined

Balance Sheet

Management

Liquidity and

Capital

• Record diluted EPS of $0.86
• Adjusted diluted EPS of $1.031 excluding write-down of legacy OREO
• Record quarterly net income of $8.4 million
• Total revenue of $28.7 million, an increase of 48.1% from 2Q20
• Cost of interest-bearing deposits declined 43 bps from 2Q20 to 1.51%
• FTE net interest margin increased 17 bps to 1.67%
• Allowance for loan losses / total loans, excluding PPP, increased to 0.91%1
• Asset quality remained solid with NPAs to total assets of 0.23%
• Portfolio loan balances increased by $39.2 million, or 1.3% from 2Q20
• SBA loan sales contributed $1.7 million in fee revenue
• Sold $12.2 million of single tenant lease financing loans at a gain of $0.4 million
• Regulatory capital ratios increased from 2Q20 and remain strong
• Continued strong on- and off-balance sheet liquidity to manage impact of COVID-19 environment
• Deposit balances relatively stable from 2Q20

1 See Reconciliation of Non-GAAP Financial Measures in the Appendix

13

13

History of Strong Organic Growth

Execution of the business strategy has driven consistent and sustained balance sheet growth

							Total Assets															Total Loans
	Dollars in millions										$4,334				Dollars in millions
											$4,100
	CAGR: 29.4%		vs. Peers1 at 13.6%				CAGR: 27.0%	vs. Peers1 at 15.3%	$2,964	$3,013
					$2,768	$3,542															$2,091	$2,716
			$1,854																		$1,251
	$1,270															$954
	2015	2016	2017	2018	2019			3Q20	2015	2016	2017	2018	2019		3Q20
					Total Deposits													Shareholders' Equity
	Dollars in millions										$3,372				Dollars in millions		$289	$305	$318
	CAGR: 30.5%	vs. Peers1 at 14.3%	$3,154				CAGR: 25.7%
					$2,085	$2,671													$154	$224
			$1,463
														$104
	$956
	2015	2016	2017	2018	2019			3Q20	2015	2016	2017	2018	2019		3Q20

1	Source: S&P Global Intelligence; peer data represents median value of publically traded Small Cap banks with a market capitalization between
	$250 million and $1.0 billion as of September 30, 2020.	14

Profitability Driven by Capital Deployment

Capital has been deployed into new loan verticals, driving earnings growth

				Net Income1,2,3												Diluted EPS1,2,3
	Dollars in thousands					$27,089										$2.50		$2.51	$2.77
				$25,239								$2.39
					$23,814							$2.30
											$1.96						$2.60
								$25,458								$2.30
				$17,072	$21,900										$2.13
			$12,074
			$15,226
$8,929
2015	2016	2017	2018		2019		TTM3Q20	2015	2016	2017	2018		2019		TTM3Q20
			Return on Average Assets1,2,3							Return on Average Tangible Common Equity1,2,3
0.81%	0.74%	0.74%	0.78%										10.12%	9.84%
				0.65%	0.64%				9.33%			9.35%
														8.65%	8.95%
					0.72%
				0.66%
							0.60%								8.77%	8.60%			8.41%
2015	2016	2017	2018		2019		TTM3Q20	2015	2016	2017	2018		2019		TTM3Q20
1 See Reconciliation of Non-GAAP Financial Measures in the Appendix.
2 2017 reported net income of $15.2 million included the revaluation of the Company's
		net deferred tax asset which reduced net income by $1.8 million and negatively
		impacted Net Income, EPS, ROAA and ROATCE.
3 2018 reported net income of $21.9 million included a write-down of legacy other real
		estate owned which reduced net income by $1.9 million and negatively impacted Net
		Income, EPS, ROAA and ROATCE.									15
4 2020 reported net income of $25.5 million included a write-down of legacy other real

estate owned which reduced net income by $1.6 million and negatively impacted Net Income, EPS, ROAA and ROATCE.

Growth Drives Economies of Scale

Scalable, technology-driven model has delivered increasing efficiency and is a key component driving improved operating leverage

			Noninterest Income										Noninterest Expense1,2
Dollars in millions						$12.5			Dollars in millions						$16.4
									$12.7						$13.5	$13.2
									$11.1		$11.7	$11.7	$12.6		$14.3
				$5.6	$5.4	$6.2	$5.0
			$3.5			$10.3
$2.0	$2.4
	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20					4Q18	1Q19		2Q19	3Q19	4Q19	1Q20	2Q20		3Q20
	Noninterest Expense / Average Assets1,2								Total Assets Per FTE
1.52%							1.51%			Dollars in millions	$18.4	$18.6
1.24%				1.31%		$17.6	$17.6	$17.9	$17.4	$17.4	$17.4
		1.23%	1.11%	1.22%	1.21%
		1.32%
1.23%

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q2020

1. See Reconciliation of Non-GAAP Financial Measures in the Appendix.
2. 4Q18 results included a write-down of legacy other real estate owned

	which increased noninterest expense by $2.4 million.
3	3Q20 results included a write-down of legacy other real estate owned	16
	which increased noninterest expense by $2.1 million.

Net Interest Income and Net Interest Margin

• FTE net interest margin improved by 17 bps from 2Q20
• Interest expense on deposits declined as: 1) higher cost CDs matured and were either replaced at lower rates or not renewed; and 2) money market rates were lowered substantially
• Interest income earned on securities was impacted by accelerated premium amortization and continued declines in short term interest rate indices

Yield on Loans and Cost of Deposits

Net Interest Income - GAAP and FTE1

Dollars in millions			GAAP		FTE
$16.8	$16.9	$16.6		$15.9		$17.7
$15.2	$15.4	$15.0	$14.4	$16.2
	3Q19	4Q19		1Q20	2Q20	3Q20

NIM - GAAP and FTE1

GAAP FTE

4.18%	4.20%	4.11%	4.00%	3.88%
			1.70%	1.67%
				1.65%	1.67%
								1.50%

2.40% 2.35% 2.24%

1.94%

1.51%

3Q19

4Q19

1Q20

2Q20

3Q20

Yield on loans Cost of interest-bearing deposits

1.54%	1.51%	1.50%	1.37%	1.53%

3Q19

4Q19

1Q20

2Q20

3Q20

17

1 See Reconciliation of Non-GAAP Financial Measures in the Appendix

Net Interest Margin Drivers

• Linked quarter NIM improvement was primarily attributable to the continued impact of lower deposit costs
• • Interest-earningasset yields expected to stabilize
• Significant opportunity to continue lowering deposit costs
• • $931 million of CDs with a weighted average cost of 2.02% mature in the next twelve months - replacement cost is currently in the range of 0.50%
  • Lowered money market rates 30 - 50 bps during the quarter and another 10 bps so far in 4Q20

NIM - FTE1 Linked-Quarter Change			Monthly Rate Paid on Interest-Bearing Deposits
+32 bps
-3 bps	2.16%	2.10%

-11 bps	1.67%
-1 bp

1.50%

1.93%

1.80%

1.59%

1.50%

1.42%

Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20

18

1 See Reconciliation of Non-GAAP Financial Measures in the Appendix

Deposit Composition

• Total deposits declined $8.4 million, or 0.2%, compared to 2Q20, and increased $224.1 million, or 7.1%, year-over-year
• Quarterly money market growth of $117.3 million, including $87.3 million in small business deposits
• CD and brokered deposit balances decreased $138.1 million compared to 2Q20
• Cost of interest-bearing deposits declined 43 bps from 2Q20 to 1.51%

Total Deposits - $3.4 Billion

As of September 30, 2020

$86.1 3%

$1,722.0	$155.1	$50.0
5%	1%
51%

$1,359.2

40%

		Noninterest-bearing deposits		Interest-bearing demand deposits
		Savings accounts		Money market accounts
		Certificates and brokered deposits			19
1 Total non-time deposits excludes brokered non-time deposits

Total Non-Time Deposits - $1.7 Billion

As of September 30, 20201

	$251.2
$546.5	15%
$99.2
33%	6%

$753.3 46%

Commercial		Public funds		Small business		Consumer

Liquidity and Capital

• Regulatory capital ratios remained strong at the Company and Bank levels
• Strong capital generation during the quarter resulted in the tangible common equity to tangible assets ratio increasing 23 bps to 7.24%
• Continue to have sufficient liquidity to handle the current economic impact of COVID-19

Tangible Book Value Per Share1			Regulatory Capital Ratios - September 30, 2020
$30.82	$31.98		CompanyBank

$27.93

$26.09

$22.24 $23.04

$20.74

$19.38

2013

2014

2015

2016

2017

2018

2019

3Q20

Total shareholders' equity to assets	7.34%	8.12%
Tangible common equity to tangible assets1	7.24%	8.02%
Tier 1 leverage ratio	7.72%	8.50%
Common equity tier 1 capital ratio	11.13%	12.27%
Tier 1 capital ratio	11.13%	12.27%
Total risk-based capital ratio	14.38%	13.17%

1 See Reconciliation of Non-GAAP Financial Measures

20

Loan Portfolio Overview

• Total portfolio loans increased $39.2 million, or 1.3%, compared to 2Q20, and increased $131.6 million, or 4.6%, year-over-year
• Commercial loan balances increased $56.2 million, or 2.4%, compared to 2Q20 as growth in healthcare finance and construction lending resumed following limited activity in the second quarter
• Consumer loan balances declined $15.3 million, or 2.9%, due primarily to increased prepayment activity across the portfolio

Loan Portfolio Mix

Dollars in millions	$2,963.5	$3,012.9

				$2,716.2	6%	6%
				4%
	1			7%	2%
Commercial and Industrial			2%
					32%
Commercial Real Estate			$2,091.0	34%	34%
		9%
Single Tenant Lease Financing
	2%
Public Finance		$1,250.8	38%			21%
Healthcare Finance			23%
		26%
	13%
Small Business Lending		5%		4%		15%
		22%	10%
Residential Mortgage/HE/HELOCs	49%
2%	1%	2%	4%
			16%
Consumer		19%	16%	11%	8%
		11%	10%	10%	10%
		14%
		2016	2017	2018	2019	3Q20

21

1 Includes commercial and industrial and owner-occupied commercial real estate balances

Single Tenant Lease Financing

• $960.5 million in balances as of September 30, 2020
• Long term financing of single tenant properties occupied by historically strong national and regional tenants
• Weighted-averageportfolio LTV of 49%
• Weighted-averageloan size of $1.4 million
• Strong historical credit performance
• Only $5.4 million in loan balances remain on deferral; all other loans came off deferral and resumed payments
• No delinquencies for performing loans

Portfolio mix by major vertical

2% 1%	1%		Quick Service
			Restaurants
6%			Full Service
		Restaurants
9%		23%	Auto Parts/
	Repair/Car Wash
			Convenience/Fuel
9%			Pharmacies
			Specialty Retailers
11%		22%	Dollar Stores
	Medical

16%	Bank Branches
Other

Portfolio mix by major tenant

			Red Lobster
	7%		ICWG
	7%		Wendy's
	6%		Burger King
		Walgreens
	5%
55%		Bob Evans
4%
	Dollar General
	4%		CVS
	4%		United Pacific
	4%		Caliber
	2%		Collision
	2%		Other

Portfolio mix by geography

				6%
12%
	21%

24% 37%

22

Public Finance

• $625.6 million in balances as of September 30, 2020
• Provides a range of credit solutions for government and not-for-profit entities
• Borrowers' needs include short-term financing, debt refinancing, infrastructure improvements, economic development and equipment financing
• Federal stimulus funds provide relief from tax revenue declines and/or delays caused by the COVID-19 crisis
• No delinquencies or losses since inception
• No borrowers currently receiving payment deferrals

Portfolio mix by repayment source

2.7%5.2%			General Obligation
2.8%			Essential use equipment
3.0%			loans
			Utilities Revenue
5.1%	31.8%		Lease rental revenue
	Public higher ed facilities -
6.1%			Revenue
		Tax Incremental Financing
6.2%			(TIF) districts
		Sales tax, food and bev tax,
			hotel tax
10.4%			Income Tax supported loans
15.9%		Public higher ed facilities -
		G.O.
10.8%			Municipally owned health
		care facilities
			Others	23

Borrower mix by credit rating

	1.2%
	2.9%5.0%	AAA/Aaa
		4.6%
		AA+/Aa1
			AA/Aa2
47.0%			AA-/Aa3
	21.4%	A+/A1
			A/A2
			A-/A3
			BBB+/Baa1
			BBB/Baa2
	6.3% 4.7%	BB+/Ba1
		1.3%	BB/Ba2
3.0%	0.7%1.9%	Non-Rated
Portfolio mix by state
12.4%		IN	OK
3.3%		IA	OH
3.3%
3.6%		55.2% MO	MI
4.0%
5.7%		MS	GA
5.9%

6.6%	Other

Healthcare Finance

• $461.7 million in balances as of September 30, 2020
• Loan portfolio focused primarily on dental practices with some exposure to veterinary practices and other specialties
• Borrowers' needs include practice finance or acquisition, acquiring or refinancing owner-occupied CRE, equipment purchases and project loans
• Average loan size of $630,000
• Balances on deferral programs represent 0.5% of portfolio, down from late-May peak of approximately 79%

Portfolio mix by borrower use

1%

4%

	Practice Refi or
14%	Acquisition
81%	Owner
Occupied CRE

Project

Equipment and other

24

Portfolio mix by borrower

1% 2%

7%

Dentists

Veterinarians

Physicians

90%

Other

Portfolio mix by State

		CA	TX
39%	28%	NY	AZ
		FL	NJ
	12%	Other

3% 4%5% 6%

C&I and Owner-Occupied Commercial Real Estate

• $166.2 million in combined balances as of September 30, 2020
• Current C&I LOC utilization of 46%
• Average loan sizes
• • C&I: $354,000
  • Owner-occupiedCRE: $958,000
• Exited relationships totaling in excess of $65 million over the last two years to de-risk the portfolio
• 0.41% of balances are on payment deferral programs as of October 30, 2020

Portfolio by Loan Type

Portfolio Mix by State

2% 8%		IN
5%		AZ
6%		IL
	52%
		OH
27%		MD
		Other

Portfolio Mix by Major Industry

10%

36%54%

Owner Occupied

CRE

C&I - Term Loans

C&I - Lines of

Credit

25

		Services
25%	31%	Construction
		Real Estate and
		Rental and Leasing
9%		Retail Trade
10%	14%	Manufacturing
	11%

Other

Small Business Lending

• $123.2 million in balances as of September 30, 2020
• Current balance of $58.3 million outstanding under the Paycheck Protection Program consisting of 447 loans made to existing clients
• 7.0% of balances are on payment deferral programs as of October 30, 2020
• SBA sales team now consists of 11 Business Development Officers and origination volumes are ramping up

				Managed SBA 7(a) Loans1
	Dollars in millions											$231.1
											$173.5		$34.8
				$151.8	$157.9
										$113.9		$131.5
								$103.9
				$104.0
														$64.9
	$11.6								$59.6
		$54.1
	$47.8
	3Q19	4Q19				1Q20	2Q20		3Q20
			Retained Balance			Servicing Portfolio			Held For Sale
1 Excludes PPP loans											26

Portfolio Mix by State

	IN	IL
22%	41%	AZ
	CA
4%
4%	FL	TX
4%
9%	Other
	17%

Portfolio Mix by Major Industry

24%	24%		Services
	Health Care and
			Social Assistance
			Accommodation and
			Food Services
9%	16%		Retail Trade
11%	16%		Construction

Other

Residential Mortgage

• $225.2 million in balances as of September 30, 2020 (includes home equity balances)
• Direct-to-consumeroriginations centrally located at corporate headquarters
• Focused on high quality borrowers
• • Avg. loan size of $182,000
  • Avg. credit score at orig. of 756
  • Avg. LTV at origination of 68%
• Strong historical credit performance
• Approximately 1% of balances are on payment deferral programs as of October 30, 2020

Concentration by State

State	Percentage
Indiana	54%
California	17%
New York	4%
Florida	2%
Colorado	2%
All other states	21%

27

National Portfolio with

Midwest Concentration

23%				9%
	59%

3%6%

Concentration by Loan Type

Loan Type	Percentage
Single Family Residential	73%
SFR Construction to
Permanent	17%
Home Equity - LOC	8%
Home Equity - Closed End	2%

Specialty Consumer

• $282.5 million in balances as of September 30, 2020
• Direct-to-consumerand nationwide dealer network originations
• Focused on high quality borrowers
• • Avg. credit score at orig. of 778
  • Avg. loan size of $19,370
• Strong historical credit performance
• Less than 0.2% of balances are on payment deferral programs as of October 30, 2020

Concentration by State

State	Percentage
Texas	15%
California	12%
Florida	6%
North Carolina	4%
Colorado	4%
All other states	59%

Geographically Diverse Portfolio

22%				10%
	18%

22%28%

Concentration by Loan Type

Loan Type	Percentage
Trailers	52%
Recreational Vehicles	34%
Other consumer	14%

28

Excellent Asset Quality

Asset quality remains among the best in the industry driven by a strong credit culture and lower-risk asset classes

NPAs / Total Assets

NPLs / Total Loans

0.37%	0.31%
				0.23%
		0.21%		0.22%
			0.10%
2014	2015	2016	2017	2019	3Q20

Allowance for Loan Losses / NPLs

5,001%

1,784% 2,013%

1,014%

324% 275%

2014

2015

2016

2017

2019

3Q20

					0.32%
				0.23%
0.02%	0.09%	0.04%	0.03%
2014	2015	2016	2017	2019	3Q20

Net Charge-Offs (Recoveries) / Average Loans

(0.07%)	0.15%	0.05%	0.04%	0.04%	0.01%
2014	2015	2016	2017	2019	3Q20

29

Appendix

30

Loan Portfolio Composition

Dollars in thousands		2017			2018			2019				1Q20			2Q20			3Q20
Commercial loans
Commercial and industrial	$	122,940	$	107,405	$	96,420		$	95,227	$	81,687	$	77,116
Owner-occupied commercial real estate		75,768			77,569			86,726				87,956			86,897			89,095
Investor commercial real estate		7,273			5,391			12,567				13,421			13,286			13,084
Construction		49,213			39,916			60,274				64,581			77,591			92,154
Single tenant lease financing		803,299			919,440			995,879				972,275			980,292			960,505
Public finance		438,341			706,342			687,094				627,678			647,107			625,638
Healthcare finance		31,573			117,007			300,612				372,266			380,956			461,740
Small business lending		4,870			17,370			47,787				54,056			118,526			123,168
Total commercial loans		1,528,407			1,990,440			2,287,359				2,287,460			2,386,342			2,442,500
Consumer loans
Residential mortgage		299,935			399,898			313,849				218,730			208,728			203,041
Home equity		30,554			28,735			24,306				23,855			22,640			22,169
Trailers		101,369			136,620			146,734				148,700			147,326			145,775
Recreational vehicles		69,196			91,912			102,702				103,868			102,088			96,910
Other consumer loans		56,968			51,239			45,873				44,037			42,218			39,765
Total consumer loans		558,022			708,404			633,464				539,190			523,000			507,660
Net def. loan fees, prem., disc. and other1		4,764			17,384			42,724				65,443			64,332			62,754
Total Loans	$	2,091,193	$	2,716,228	$	2,963,547		$	2,892,093	$	2,973,674	$	3,012,914

1 Includes carrying value adjustments of $44.3 million and $46.0 million related to terminated interest rate swaps associated with public finance loans as of September 30, 2020 and June 30, 2020, respectively, and $44.6 million, $21.4 million, $5.0 million and $0.3 million as of March 31, 2020, December 31, 2019, December 31, 2018 and December 31, 2017, respectively, related to interest rate swaps associated with public finance loans.

31

Reconciliation of Non-GAAP Financial Measures

Dollars in thousands	4Q18			1Q19			2Q19			3Q19			4Q19			1Q20			2Q20			3Q20
Total equity - GAAP	$288,735	$294,013	$296,120	$295,140	$304,913	$305,127	$307,711	$318,102
Adjustments:
Goodwill	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)
Tangible common equity	$284,048			$289,326			$291,433			$290,453			$300,226			$300,440			$303,024			$313,415
Total assets - GAAP	$3,541,692	$3,670,176	$3,958,829	$4,095,491	$4,100,083	$4,168,146	$4,324,600	$4,333,624
Adjustments:
Goodwill	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)
Tangible assets	$3,537,005			$3,665,489			$3,954,142			$4,090,804			$4,095,396			$4,163,459			$4,319,913			$4,328,937
Common shares outstanding	10,170,778	10,128,587	10,016,458	9,741,800	9,741,800	9,801,825	9,799,047	9,800,569
Total shareholders' equity to assets	8.01%	8.01%	7.48%	7.21%	7.44%	7.32%	7.12%	7.34%
Effect of goodwill	(0.12%)	(0.12%)	(0.11%)	(0.11%)	(0.11%)	(0.10%)	(0.11%)	(0.10%)
Tangible common equity to tangible assets	8.03%			7.89%			7.37%			7.10%			7.33%			7.22%			7.01%			7.24%
Net interest income	$15,421	$16,244	$16,105	$15,244	$15,374	$15,018	$14,426	$16,232
Adjustments:
Fully-taxable equivalent adjustments 1	1,477	1,557	1,612	1,595	1,570	1,535	1,437	1,424
Net interest income - FTE	$16,898			$17,801			$17,717			$16,839			$16,944			$16,553			$15,863			$17,656
Net interest margin	1.89%	1.86%	1.73%	1.54%	1.51%	1.50%	1.37%	1.53%
Adjustments:
Effect of fully-taxable equivalent adjustments 1	0.18%	0.18%	0.18%	0.16%	0.16%	0.15%	0.13%	0.14%
Net interest margin - FTE	2.07%			2.04%			1.91%			1.70%			1.67%			1.65%			1.50%			1.67%
Noninterest expense	$12,709	$11,109	$11,709	$11,203	$12,613	$13,486	$13,244	$16,412
Adjustments:
Write-down of other real estate owned	2,423.00	-	-	-	-	-	-	2,065
Adjusted noninterest expense	$10,286			$11,109			$11,709			$11,203			$12,613			$13,486			$13,244			$14,347
Noninterest expense/average assets	1.52%	1.24%	1.23%	1.11%	1.22%	1.32%	1.23%	1.51%
Effect of write-down of other real estate owned	0.29%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.19%
Adjusted noninterest expense/average assets	1.23%		1.24%		1.23%		1.11%		1.22%		1.32%		1.23%		1.32%

1 Assuming a 21% tax rate

32

Reconciliation of Non-GAAP Financial Measures

			2015	2016	2017	2018	2019			TTM 3Q20
	Net income - GAAP	$8,929	$12,074	$15,226	$21,900	$25,239			$25,458
	Adjustments:
	Write-down of other real estate owned	-	-	-	1,914	-			1,631
	Net deferred tax asset revaluation	-	-	1,846	-	-			-
	Adjusted net income																	$25,239			$27,089
		$8,929		$12,074		$17,072	$23,814
	Diluted average common shares outstanding	4,554,219	5,239,082	7,149,302	9,508,653	10,044,483			9,773,224
	Diluted earnings per share - GAAP	$1.96	$2.30	$2.13	$2.30	$2.51			$2.60
	Adjustments:
	Effect of write-down of other real estate owned	-	-	-	0.20	-			0.17
	Effect of net deferred tax asset revaluation	-	-	0.26	-	-			-
	Adjusted diluted earnings per share								$2.50								$2.51			$2.77
		$1.96		$2.30	$2.39
	Total average equity - GAAP	$100,428	$124,023	$178,212	$259,416	$296,382			$307,277
	Adjustments:
	Average goodwill	(4,687)	(4,687)	(4,687)	(4,687)	(4,687)			(4,687)
	Average tangible common equity								$254,729							$291,695			$302,590
		$95,741	$119,336	$173,525
	Return on average assets	0.81%	0.74%	0.66%	0.72%	0.65%			0.60%
	Effect of write-down of other real estate owned	0.00%	0.00%	0.00%	0.06%	0.00%			0.04%
	Effect of net deferred tax asset revaluation	0.00%	0.00%	0.08%	0.00%	0.00%			0.00%
	Adjusted return on average assets								0.78%						0.65%			0.64%
		0.81%		0.74%	0.74%
	Return on average shareholders' equity	8.89%	9.74%	8.54%	8.44%	8.52%			8.29%
	Effect of goodwill	0.44%	0.38%	0.23%	0.16%	0.13%			0.12%
	Return on average tangible common equity								8.60%					8.65%			8.41%
	9.33%		10.12%	8.77%
	Return on average tangible common equity	9.33%	10.12%	8.77%	8.60%	8.65%			8.41%
	Effect of write-down of other real estate owned	0.00%	0.00%	0.00%	0.75%	0.00%			0.54%
	Effect of net deferred tax asset revaluation	0.00%	0.00%	1.07%	0.00%	0.00%			0.00%
	Adjusted return on average tangible common equity								9.35%				8.65%			8.95%
	9.33%		10.12%	9.84%

33

Reconciliation of Non-GAAP Financial Measures

Dollars in thousands	2013	2014		2015		2016	2017	2018	2019		3Q20
Total equity - GAAP	$90,908	$96,785		$104,330		$153,942	$224,127	$288,735	$304,913	$318,102
Adjustments:
Goodwill	(4,687)	(4,687)		(4,687)		(4,687)	(4,687)	(4,687)	(4,687)	(4,687)
Tangible common equity	$86,221		$92,098			$99,643
		$149,255
			$219,440
				$284,048
					$300,226
								$313,415
Common shares outstanding	4,448,326	4,439,575		4,481,347		6,478,050	8,411,077	10,170,778	9,741,800	9,800,569
Book value per common share	$20.44	$21.80		$23.28		$23.76	$26.65	$28.39	$31.30	$32.46
Effect of goodwill	(1.06)	(1.06)		(1.04)		(0.72)	(0.56)	(0.46)	(0.48)	(0.48)
Tangible book value per common share		$19.38		$20.74			$22.24
						$23.04		$26.09		$27.93	$30.82
									$31.98

Allowance for loan losses	$	5,426	$	5,800	$	8,351	$	10,981	$	14,970	$	17,896	$	21,840	$	26,917
Loans		501,153		732,426		953,859		1,250,789		2,091,193		2,716,228		2,963,547		3,012,914
Adjustments:
PPP loans		-		-		-		-		-		-		-		(58,334)
Loans, excluding PPP loans	$	501,153	$	732,426	$	953,859	$	1,250,789	$	2,091,193	$	2,716,228	$	2,963,547	$	2,954,580
Allownace for loan losses to loans		1.08%		0.79%		0.88%		0.88%		0.72%		0.66%		0.74%		0.89%
Effect of PPP loans		0.00%		0.00%		0.00%		0.00%		0.00%		0.00%		0.00%		0.02%
Allowance for loan losses to loans, excluding PPP loans		1.08%		0.79%		0.88%		0.88%		0.72%		0.66%		0.74%		0.91%

34