INBK Stock Forecast & Price Target

First Internet Bancorp has demonstrated significant financial growth, with end-of-period (EOP) deposits surging by 29% quarter-over-quarter and expectations for continued solid deposit growth through 2025, bolstered by successful partnerships with fintech firms. Additionally, EOP loans held for investment (HFI) increased by 2% quarter-over-quarter, led by a 3% rise in commercial balances, highlighting the company's robust lending activities. The bank's efficiency ratio of 57% outperforms both consensus expectations and its own forecast for future improvement, while an increase in the yield on average earning assets to 5.65% supports a positive outlook on net interest income and fee income growth.

First Internet Bancorp reported a significant decline in noninterest income, decreasing 46.7% quarter-over-quarter and 49.6% year-over-year, primarily due to underperformance in GOS fees, although this was somewhat mitigated by higher other income. Additionally, the bank experienced a shortfall in net interest income (NII), which totaled $31.5 million, falling 5% below consensus expectations, while the net interest margin (NIM) only expanded marginally to 2.12%. Furthermore, end-of-period loans held for investment decreased by 17% quarter-over-quarter, and the company faced ongoing challenges with elevated net charge-offs (NCOs) linked to its SBA and franchise finance loans, raising concerns about asset quality and profitability.