INBK Stock Forecast & Price Target

First Internet Bancorp is expected to see its net loans to deposits (L/D) increase steadily to 84% by the fourth quarter of 2026, reflecting a strong growth trajectory in loan origination with commercial balances rising by 3% quarter-over-quarter. The company's tangible common equity improved significantly by 21 basis points quarter-over-quarter, enhancing its capital position alongside a more favorable efficiency ratio of 57%, which is projected to reach 55% by the end of 2026 as net interest income and fee income both demonstrate robust growth. Despite a rise in non-performing assets due to specific loans moving to non-accrual status, the company maintains a stable allowance for credit losses, positioning itself conservatively as it anticipates further progression in asset quality metrics.

First Internet Bancorp reported operating expenses of $24.2 million, which were lower than expected but still resulted in a notable year-over-year decline in tangible book value (TBV) by 10% to $39.88, highlighting a deterioration in asset quality. The company's net interest income (NII) of $31.5 million was 5% below consensus estimates, primarily due to disappointing net interest margin (NIM) expansion, which was constrained by external factors and higher credit costs associated with non-performing loans. Additionally, end-of-period loans held for investment (HFI) fell by 17% quarter-over-quarter, signaling potential difficulties in sustaining growth in loan origination and overall financial performance.