First Internet Bancorp (INBK) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $0.2 million ($0.02 EPS), reflecting continued credit resolution efforts in franchise finance and small business loan portfolios, with total revenue of $33.5 million, down 5.6% from Q1 2025 but up 3.7% year-over-year.

• Pre-tax, pre-provision income was $11.7 million, up 17.2% year-over-year but down 1.8% sequentially.

• Total portfolio loan balances increased 2.5% from Q1 2025, with deposit growth of 7.1% from Q1 2025 and 24.0% year-over-year, driven by fintech partnerships.

• Book value per share increased to $44.79; tangible book value per share rose to $44.25.

• Capital position remains solid with TCE/TA of 6.35% and CET1 ratio of 8.90%.

Financial highlights

• Net interest income for Q2 2025 was $28.0 million (up 11.5% from Q1 and 31.2% year-over-year), with net interest margin at 1.96% (2.04% FTE), up 14 bps sequentially and 29 bps year-over-year.

• Noninterest income was $5.6 million, down 46.7% from Q1 2025 and 49.6% year-over-year, mainly due to lower gain on sale of SBA loans.

• Noninterest expense for Q2 2025 was $21.8 million, down 7.5% from Q1 2025 and 2.4% year-over-year.

• Provision for credit losses for Q2 2025 was $13.6 million, up from $3.9 million year-over-year; net charge-offs for the quarter were $14.3 million, mainly in small business and franchise finance.

• Total loans grew by $108.2 million (2.5%) sequentially and $401.4 million (10.1%) year-over-year.

Outlook and guidance

• Net interest income and margin expected to expand through higher loan yields and deposit repricing, with loan growth projected at ~2% per quarter in Q3 and Q4 2025 and 5–7% for FY 2026.

• Net interest income guidance: ~$33.5M in Q3 2025, ~$35.5M in Q4 2025, $158–$163M for FY 2026; NIM (FTE) 2.50–2.60% for FY 2026.

• Noninterest income expected to revert to normalized levels as SBA loan sales resume in Q3 2025.

• Provision for credit losses forecasted at $10–11M per quarter in 2H25 and $37–$40M for FY 2026.

• Economic policy uncertainty remains a risk to the outlook.