First Internet Bancorp : Third Quarter 2021 Financial Results Presentation

Financial Results Third Quarter 2021

Forward-Looking Statements & Non-GAAP

Financial Measures

This presentation contains forward-looking statements, including statements with respect to the Company's stock repurchase program and timing and methods of executing the same, the financial condition, results of operations, trends in lending policies and loan programs, plans and prospective business partnerships, objectives, future performance and business of the Company. Forward-looking statements are generally identifiable by the use of words such as "anticipate," "believe," "confidence in," "continue," "could," "designed," "effort," "estimate," "expect," "intend," "looking forward," "may," "optimistic," "pending," "plan," "position," "preliminary," "remain," "should," "will," "working on," "would" or other similar expressions. Such statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and are subject to certain risks and uncertainties including: the effects of the COVID-19 global pandemic and other adverse public health developments on the economy, our business and operations and the business and operations of our vendors and customers: general economic conditions, whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products; our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we own or that is the collateral for our loans; 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, healthcare finance and franchise finance loan portfolios; competition with national, regional and community financial institutions; the loss of any key members of senior management; execution of future acquisition, reorganization or disposition transactions, including without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings and other anticipated benefits from such transactions; 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.

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 book value per common share, tangible common equity to tangible assets, average tangible common equity, return on average tangible common equity, net interest income - FTE, adjusted net interest income, adjusted net interest income - FTE, net interest margin - FTE, adjusted net interest margin - FTE allowance for loan losses to loans, excluding PPP loans, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest expense to average assets, adjusted revenue, adjusted income before income taxes, adjusted income tax provision, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average shareholders' equity, adjusted return on average tangible common equity and adjusted effective income tax rate 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 in the table at the end of this presentation under the caption "Reconciliation of Non-GAAP Financial Measures."

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Third Quarter 2021 Highlights

		Diluted EPS of $1.21; adjusted diluted EPS of $1.27, up 23% from 3Q201
Earnings		Net income of $12.1 million; adjusted net income of $12.7 million, up 27% from 3Q201
		Total revenue of $28.7 million; adjusted revenue of $29.5 million, up 3% from 3Q201

		Cost of interest-bearing deposits declined 9 bps from 2Q21 to 0.90%
Key Operating		Adjusted FTE net interest margin of 2.21%1
Trends		SBA loan sales contributed $2.7 million of fee revenue
		Asset quality remained strong with NPAs to total assets of 0.21%

		Total portfolio loan balances declined 0.7% from 2Q21
Loans and		Franchise finance, C&I and single tenant lease financing balances increased while
Deposits		healthcare finance, small business lending/PPP and public finance decreased
		Non-time deposit balances increased 3.2% from 2Q21 while CDs decreased 4.0%

		ROAA of 1.12% and ROACTE of 13.27%
Profitability		Adjusted ROAA of 1.18%1 and adjusted ROATCE of 13.97%1
and Capital		Tangible common equity / tangible assets increased 18 bps from 2Q21 to 8.61%1
		Regulatory capital ratios further bolstered by 3Q21 subordinated debt issuance

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

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Near-term Profitability Drivers

Commercial loan growth combined with continued CD and brokered deposit repricing provides the ability to increase net interest income and expand net interest margin

Annual net interest income growth expected to be between $9 and $11 million during 2022

Commercial loan pipelines, driven by SBA, franchise finance and construction, are robust

Expect to fund $100 million of franchise loans during 2021 and an additional $150 million during 2022

Commercial loan pipelines up 65% over 2Q21 (includes SBA 7(a) loans held for sale) Unfunded commitments remain strong at $190 million

Investments in SBA platform expected to produce increased revenue

SBA gain on sale revenue anticipated to be in the range of $15 million for 2022

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Loan Portfolio Overview

• Total loan portfolio balance declined 0.7% from 2Q21, and 2.5% from 3Q20
• Commercial loan balances decreased $29.1 million, or 1.2%, compared to 2Q21, driven primarily by net payoffs in healthcare finance, small business lending (PPP loans) and public finance, partially offset by growth in franchise finance, commercial and industrial and single tenant lease financing
• Consumer loan balances increased $8.7 million, or 1.9%, compared to 2Q21 due primarily to higher balances in the residential mortgage portfolio

Loan Portfolio Mix2

Dollars in millions				$2,963.5	$3,059.2	$2,936.1
					$2,716.2	6%
					6%	6%
		Commercial and Industrial	1		4%
				7%	2%		5%
		Construction and Investor CRE		2%
		$2,091.0		34%	31%
		Single Tenant Lease Financing	34%	32%
		9%
		Public Finance		2%
		Healthcare Finance		38%	26%	24%	20%	20%
		Small Business Lending
		Franchise Finance		22%	4%	11%	17%	16%
		Residential Mortgage/HE/HELOCs	2%	1%	2%	4%		4%
		16%		1%
		16%	11%
		Consumer			8%	7%
			11%	10%	10%	10%	9%
				2017	2018	2019	2020		3Q21

1. Includes commercial and industrial and owner-occupied commercial real estate balances
2. Percentages may not add up to 100% due to rounding

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