First Internet Bancorp Announces Year-End Earnings

While net interest income and non-interest income for the Bancorp showed modest growth over the prior year (6% and 12%, respectively), these gains were more than offset by an increase in provision for loan and lease losses of $3,017,070 (167%) from prior year results.

"First and foremost, the Bancorp has remained profitable in an environment where many financial institutions have not," noted Mr. David B. Becker, Chairman and CEO of First Internet Bancorp. "We can credit, in part, the interest rate environment, which has kept our cost of funds low. However, the reality is that the economy is really hurting our borrowers right now. Customers who previously had excellent credit histories, who never missed a payment in the past, are defaulting on loans."

Speaking to the effect the economic environment may have on 2009 earnings, Mr. Becker said, "We acknowledge that 2009 will be a challenging year for the Bancorp and for the banking industry as a whole. Declining home values and rising unemployment rates places pressure on borrowers that eventually impacts results. Until the economy begins to turn around, there is a high probability that we will continue to experience elevated levels of loan losses. To mitigate these losses, we continue working with borrowers to avoid default on outstanding loans where prudent, and we will remain disciplined in both loan underwriting and in loan and deposit pricing."

As of December 31, 2008, the Bancorp held $439.2 million in deposits, a 5% decrease from deposits as of December 31, 2007, while total loans decreased by 8% to $324.4 million. The decrease in cash equivalents and investment securities was larger, at 60%, as excess funds were used to meet funding needs and reinvest in higher yielding assets.

Selected Balance Sheet Information
                            December 31
                            2007          2008
Cash Equivalents            65,173,598    25,779,837
Investment Securities       118,524,630   168,806,509
Loans, net of Reserve       352,467,009   324,370,456
Bank owned life insurance   6,968,068     7,267,261
Goodwill                    4,687,349     4,687,349
Other Assets                10,080,420    12,132,315
Total Assets                557,901,074   543,043,727
Deposits                    461,562,873   439,241,806
FHLB Advances               48,700,000    57,000,000
Other Liabilities           1,551,047     1,390,594
Shareholder's Equity        46,087,154    45,411,327
Total Liabilities & Equity  557,901,074   543,043,727

Selected Income Statement Information
                                        Year Ended December 31
                                        2007          2008
Net Interest Income                     11,638,649    12,282,221
Non-Interest Income                     2,298,400     2,585,074
Provision for Loan and Lease Losses     (1,801,899 )  (4,818,969 )
Non-Interest Expense                    (8,359,316 )  (8,481,377 )
Net Income Before Taxes                 3,775,834     1,566,949
Tax Benefit (Expense)                   (947,992   )  9,096
Net Income                              2,827,842     1,576,045
Income per share:
Basic                                   1.51          0.84
Diluted                                 1.50          0.84
Weighted average of shares outstanding:
Basic                                   1,866,793     1,878,466
Diluted                                 1,879,550     1,886,466

About First Internet Bancorp

First Internet Bancorp, the parent company of First Internet Bank of Indiana and Landmark Mortgage Company, is privately capitalized with over 250 private and corporate investors. The Bancorp became effective March 21, 2006, and is listed on the OTC Bulletin Board (www.otcbb.com) under the symbol of "FIBP".

About First Internet Bank

With over $540 million in assets, First Internet Bank of Indiana (First IB) is the first state-chartered, FDIC-insured institution to operate solely via the Internet and has customers in all 50 states. Services include checking accounts, regular and money market savings accounts with industry-leading interest rates, CDs, and IRAs. First IB also offers credit cards, personal lines of credit, and installment loans. First IB is a wholly owned subsidiary of First Internet Bancorp.

About Landmark Mortgage Company

Landmark Mortgage Company provides various mortgage products and services to clients in Central Indiana and beyond. Landmark Mortgage Company is a wholly owned subsidiary of First Internet Bancorp.

SOURCE: First Internet Bancorp

First Internet Bancorp 
Nicole Lorch, 317-532-7906