INBK Stock Forecast & Price Target

First Internet Bancorp's net loan-to-deposit ratio is projected to reach 84% by the fourth quarter of 2026, indicating a healthy lending capacity bolstered by a 13% increase in loans held for investment quarter-over-quarter. The company's financial metrics reflect positive sequential improvements, with tangible common equity rising by 21 basis points and total common equity by 2%, alongside a more favorable efficiency ratio of 57%, which is expected to improve further to 55% by 4Q26. Furthermore, while non-performing assets (NPAs) saw an increase, the bank maintains a strong allowance for credit losses, forecasting a rise in its coverage ratio, supporting a cautious yet optimistic outlook for its financial health and growth potential.

First Internet Bancorp's financial outlook appears negative due to a decline in net interest income (NII), which recorded $31.5 million and fell 4% below consensus estimates, attributed to less-than-anticipated net interest margin (NIM) expansion. Additionally, the company experienced a significant drop in end-of-period loans held for investment, decreasing 17% quarter-over-quarter, which raises concerns about future revenue generation. Moreover, the increase in operating expenses, despite a slight reduction in salaries and employee benefits, highlights ongoing financial pressures compounded by elevated net charge-offs related to specific loan segments.