First Internet Bancorp is a bank holding company that conducts its business activities
through its wholly-owned subsidiary, First Internet Bank of Indiana, an Indiana
chartered bank. First Internet Bank of Indiana was the first state-chartered,
Federal Deposit Insurance Corporation (“FDIC”) insured Internet bank
and commenced banking operations in 1999. First Internet Bancorp was incorporated
under the laws of the State of Indiana on September 15, 2005. On March 21, 2006,
we consummated a plan of exchange by which we acquired all of the outstanding
shares of the Bank.
We offer a full complement of products and services on a nationwide basis.
We conduct our deposit operations primarily over the Internet and have no traditional
branch offices. We have diversified our operations by adding commercial real
estate (“CRE”) lending, including nationwide single tenant lease
financing and commercial and industrial (“C&I”) lending, including
business banking/treasury management services to meet the needs of high-quality
commercial borrowers and depositors. We have no significant customer concentrations
within our loan portfolio.
Our business model is significantly different from that of a typical community
bank. We do not have a conventional brick and mortar branch system, but instead
operate through our scalable Internet banking platform. The market area for
our residential real estate lending, consumer lending, and deposit gathering
activities is the entire United States. We also offer single tenant lease financing
on a nationwide basis. Our other commercial banking activities, including CRE
and C&I loans, corporate credit cards, and corporate treasury management
services, are offered by our commercial banking team to businesses primarily
within Central Indiana, Phoenix, Arizona and adjacent markets.
We operate on a national basis through our scalable Internet banking platform
to gather deposits and offer residential mortgage and consumer lending products
rather than relying on a conventional brick and mortar branch system. We also
primarily conduct commercial banking and related activities on a local basis,
except for single tenant lease financing which is offered nationwide. Our overriding
strategic focus is enhancing franchise and shareholder value while maintaining
strong risk management policies and procedures. We believe the continued creation
of franchise and shareholder value will be driven by profitable growth in consumer
and commercial banking, effective underwriting, strong asset quality and efficient
technology-driven operations.
National Focus on Deposit and Consumer Banking Growth. Our first product offerings
were basic deposit accounts, certificates of deposit, electronic bill pay and
credit cards. Within 90 days of opening, we had accounts with consumers in all
50 states. Over the years, we added consumer loans, lines of credit, home equity
loans and single-family mortgages. Our footprint for deposit gathering and these
consumer lending activities is the entire nation. With the use of our Internet-based
technology platform, we do not face geographic boundaries that traditional banks
must overcome for customer acquisition. Armed with smart phones, tablets and
computers, our customers can access our online banking system, bill pay, and
remote deposit capture 24 hours a day, seven days a week, on a real-time basis.
In addition, we have dedicated banking specialists who can service customer
needs via telephone, email or online chat. We intend to continue to expand our
deposit base by leveraging technology and through cross-selling capabilities
as well as targeted marketing efforts.
Commercial Banking Growth. We have continued to diversify our operations by
adding commercial banking to complement our consumer platform. We offer traditional
CRE loans, single tenant lease financing, C&I loans, corporate credit cards
and treasury management services. Our commercial lending teams consist of seasoned
commercial bankers, most of whom have had extensive careers with larger money
center, super-regional or regional banks. These lenders leverage deep market
knowledge and experience to serve commercial borrowers with a relationship-based
approach. We are continuing to develop new products and services for this market
which is expected to produce additional revenue. We also intend to grow and
expand our commercial banking platform by hiring additional seasoned loan officers
and relationship managers with specialized market or product expertise.
Experience. Our management team and our Board of Directors are integral to our
success. Our management team and Board of Directors are led by David B. Becker,
the founder of First Internet Bank of Indiana. Mr. Becker is a seasoned business
executive and entrepreneur with over three decades of management experience
in the financial services and financial technology space, and has served as
Chief Executive Officer since 2005. Mr. Becker has been the recipient of numerous
business awards, including Ernst & Young Entrepreneur of the Year in 2001,
and was inducted into the Central Indiana Business Hall of Fame in 2008. The
senior management team consists of individuals with backgrounds in both regional
and community banking and financial technology services. The senior management
team is complemented by a dedicated Board of Directors with a wide range of
experience from careers in financial services, legal and regulatory services,
and industrial services.
Profitability. We intend to continue to leverage our technology, our long-term
customer relationships and our noninterest income sources to drive profitability.
As we continue to grow, we believe that our model will produce a greater level
of efficiency than more traditional community banks, with the goal of higher
returns on assets and shareholders’ equity.
Maintain Asset Quality, Diversified Loan Portfolio and Effective Underwriting.
We place an emphasis on our strong credit culture and strict underwriting standards
of diverse loan products to maintain our excellent credit quality.
Efficiency Through Technology. To date, we have pursued growth in a prudent
and disciplined fashion. We will continue to monitor our efficiency ratio and
intend to invest in and utilize technology to compete more effectively as we
grow in the future. Through our online account access services, augmented by
our team of dedicated banking specialists, we can satisfy the needs of our retail
and commercial customers in an efficient manner. Our data processing systems
run on a “real-time” basis, unlike many banks that run a “batch
system,” so customers benefit from an up-to-the-minute picture of their
financial position, particularly our commercial customers who complete numerous
transactions in a single day. We believe we have built a scalable banking infrastructure
based upon technology, rather than a traditional branch network, and that our
Internet banking processes are capable of supporting continued growth while
improving operational efficiencies.
Expand Market Share Through Disciplined Acquisition Strategy. We may expand
through acquisitions on an opportunistic basis, primarily as a means of securing
additional asset generation capabilities and product or geographic expertise.
Lending Activities
We earn interest income on loans as well as fee income from the origination
of loans. Lending activities include loans to individuals, which primarily consist
of residential real estate loans, home equity loans and lines of credit, and
consumer loans, and loans to commercial clients, which include commercial loans,
commercial real estate loans, lines of credit, letters of credit, and single
tenant lease financing. Residential real estate loans are either kept in our
loan portfolio or sold to secondary investors, with gains or losses from the
sales being recognized within noninterest income. Refer to Note 4 of the financial
statements for further discussion of each loan portfolio segment.