INBK Stock Forecast & Price Target

First Internet Bancorp is demonstrating strong performance in its fintech/BaaS initiative, with 4Q24 fintech revenue reaching $880K and a notable 23% increase in loan growth quarter-over-quarter. The company's ability to effectively manage non-performing assets (NPAs) with a solid allowance for credit loss (ACL) of 1.6 times non-performing loans (NPL) highlights its risk management capabilities amid an expanding loan portfolio, which grew by 13% quarter-over-quarter. Furthermore, projections indicate a significant improvement in the efficiency ratio to 58% by 4Q25, driven by targeted growth in SBA loan originations and overall net interest income (NII) growth, positioning the company for favorable valuation in a favorable market environment.

First Internet Bancorp reported net interest income (NII) of $24.7 million, which was 1% below expectations while its net interest margin (NIM) expanded only marginally, leading to concerns over overall profitability. Operating expenses exceeded expectations by 2%-4%, and the company's efficiency ratio of 67% fell short of the anticipated 63%-64%, indicating operational inefficiencies. Furthermore, the decline in core fee income and emerging negative credit trends raised uncertainty about the future performance of First Internet's lending business, contributing to a negative outlook on the stock.