INBK Stock Forecast & Price Target

First Internet Bancorp demonstrated robust growth in its end-of-period deposits, which increased by 29% quarter-over-quarter with strong expectations for continued deposit growth into 2025, bolstered by successful partnerships with fintech companies. The company's efficiency ratio of 57% outperformed industry expectations, with forecasts indicating improvement to 55% by the fourth quarter of 2026, driven by anticipated growth in net interest income and fee income. Additionally, the increase in the yield on average earning assets to 5.65% reflects effective management of asset yields, contributing positively to the company's financial outlook.

The financial analysis reveals several concerns regarding First Internet Bancorp's performance, particularly in relation to its noninterest income and net interest margin (NIM). Noninterest income saw a significant decline, decreasing 46.7% quarter-over-quarter and 49.6% year-over-year, primarily due to underperformance in guaranteed obligation security fees, despite some offset from other income sources. Furthermore, the company's net interest income (NII) fell short of expectations, with a 5% shortfall against consensus, while underlying metrics such as tangible book value and total common equity showed respective declines of 10% and 18 basis points, highlighting persistent challenges tied to higher credit costs and elevated non-performing loans.