INBK Stock Forecast & Price Target

First Internet Bancorp has demonstrated a robust growth trajectory in its deposit base, achieving a 29% increase in end-of-period (EOP) deposits quarter-over-quarter, bolstered by successful partnerships with fintech firms. The company's commercial loans have also seen steady growth, rising 2% sequentially and contributing to a 3% increase in commercial balances, amounting to an additional $115 million. Furthermore, First Internet's efficiency ratio of 57% is better than industry expectations, with forecasts indicating further improvement, supported by strong net interest income and fee income growth, driven by an increase in the yield on average earning assets to 5.65%.

First Internet Bancorp reported a notable decline in noninterest income, shrinking by 46.7% quarter-over-quarter and 49.6% year-over-year, primarily driven by lower GOS fees which failed to meet expectations, despite some offset from higher other income. The company's net interest income (NII) of $31.5 million rose 8% sequentially but still fell 5% short of consensus due to less-than-anticipated net interest margin (NIM) expansion, with both tangible book value (TBV) and tangible common equity (TCE) witnessing significant declines. Additionally, the bank's loans held for investment (HFI) decreased by 17% quarter-over-quarter, compounded by elevated non-performing charge-offs (NCOs) associated with specific loan categories, further underscoring the institution's financial vulnerabilities.