UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): July 22, 2013

 

First Internet Bancorp

(Exact Name of Registrant as Specified in Its Charter)

 

Indiana

(State or Other Jurisdiction of Incorporation)

 

001-35750 20-348991
(Commission File Number) (IRS Employer Identification No.)

 

8888 Keystone Crossing, Suite 1700  
Indianapolis, Indiana 46240
(Address of Principal Executive Offices) (Zip Code)

 

(317) 532-7900

(Registrant's Telephone Number, Including Area Code)

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02 Results of Operations and Financial Condition

 

On July 24, 2013, First Internet Bancorp (the “Company”) issued a press release announcing financial results for the second quarter of 2013.

 

A copy of the press release is filed as an exhibit to this report and is incorporated by reference herein.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On July 22, 2013, the Compensation Committee of the Board of Directors of the Company made awards under the First Internet Bancorp 2013 Equity Incentive Plan (the "Plan"). The Committee made awards of shares of restricted stock, including awards to the following executive officers:

 

    Number  
Name   of Shares  
       
David B. Becker     1,800  
Kay Whitaker     30,132  
C. Charles Perfetti     1,800  

 

In, addition, the Committee made awards for an additional 12,500 shares of restricted stock to six other persons. The shares of restricted stock will vest in three installments on January 1, 2014, January 1, 2015 and January 1, 2016. The awards will be subject to the terms and conditions of the Plan and the First Internet Bancorp 2013 Equity Incentive Plan Restricted Stock Award Agreement, the form of which is filed as an exhibit to this report and is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

Exhibit No. Description
   
10.1* Form of First Internet Bancorp 2013 Equity Incentive Plan Restricted Stock Award Agreement

 

99.1 Press release dated July 24, 2013.

 

* Represents a management contract or compensatory plan or arrangement.

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Dated:  July 26, 2013
   
  FIRST INTERNET BANCORP
     
     
  By: /s/ Kay E. Whitaker
    Kay E. Whitaker, Senior Vice President-
Finance and Chief Financial Officer

 

 
 

 

EXHIBIT INDEX

 

Number   Description   Method of filing
10.1   First Internet Bancorp 2013 Equity Incentive Plan Restricted Stock Award Agreement   Filed herewith
99.1   Press release dated July 24, 2013.   Filed herewith

 

 

 

 

FIRST INTERNET BANCORP

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

(Time-Based Vesting)

 

This Award Agreement (“Award Agreement”), dated as of ___________ __, 20__, is by and between First Internet Bancorp, an Indiana corporation (the “Company”), and _________________ (“Participant”). Unless otherwise defined herein, the terms defined in the First Internet Bancorp 2013 Equity Incentive Plan (the “Plan”), shall have the same defined meanings in this Award Agreement.

 

I. NOTICE OF GRANT

 

Participant:           
«First Name» «Middle Initial» «Last Name

The Company has granted the Participant an Award of Restricted Stock, subject to the terms and conditions of the Plan and this Award Agreement, as follows:

 

Date of Grant: _____
   
Total Number of Shares Granted: _____
   
Vesting Commencement Date: _____
   
Vesting Schedule : _____

 

II. AGREEMENT

 

1.             Grant of Award . The Company hereby grants to the Participant the number of shares of Restricted Stock set forth in the Notice of Grant, subject to the terms and conditions of the Plan, which are incorporated herein by reference.

 

2.             Vesting . Unless otherwise provided in this Award Agreement or in the Plan, the shares of Restricted Stock shall become fully vested and nonforfeitable in one or more installments in accordance with the Vesting Schedule set forth in the Notice of Grant.

 

3.             Restriction Period . Except as otherwise provided in this Award Agreement or the Plan, Participant may not sell, assign, transfer, pledge or otherwise dispose of or encumber the Restricted Stock, or any interest therein, until his or her rights in such Restricted Stock have vested, and any purported sale, assignment, transfer, pledge or other disposition or encumbrance in violation of this Award Agreement or the Plan will be void and of no effect.

 

4.             Voting . Participant shall have the right to vote the Restricted Stock.

 

5.            Dividends . Cash dividends shall not be paid to the Participant on the unvested portion of the Award. Any other dividends or distributions paid with respect to any unvested portion of the Award will be subject to the same restrictions that apply to the Award.

 

6.             Withholding . In connection with the vesting of the Restricted Stock, the Company shall have the right to require Participant to pay an amount in cash sufficient to cover any tax, including any Federal, state or local income tax, required by any governmental entity to be withheld or otherwise deducted and paid with respect to such transfer (“Withholding Tax”), and to make payment to the appropriate taxing authority of the amount of such Withholding Tax.

 

 
 

 

7.            Change in Control . As provided in the Plan, upon the occurrence of a Change in Control, the Restricted Stock may vest prior to the time provided for under the Vesting Schedule set forth in the Notice of Grant.

 

8.            Section 83(b) Election . If the Participant makes an election pursuant to Internal Revenue Code Section 83(b), to include in gross income the value of Restricted Stock transferred under this Award Agreement, the Participant shall immediately provide the Company a copy of the election notice submitted to the Internal Revenue Service.

 

9.            Tax Consequences . THE PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE THE RESTRICTED STOCK VESTS, BEFORE MAKING AN ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B), OR BEFORE DISPOSING OF THE SHARES.

 

III. OTHER TERMS

 

10.          Entire Agreement; Governing Law . The Plan is incorporated herein by reference. The Plan and this Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant. This Award Agreement is governed by the internal substantive laws but not the choice of law rules of Indiana.

 

11.          Notices . All notices and other communications required or permitted under this Award Agreement shall be written and delivered personally or sent by registered or certified first-class mail, postage prepaid and return receipt required, addressed as follows: if to the Company, to the Company’s executive offices in Indianapolis, Indiana, and if to the Participant or his or her successor, to the residence address last furnished by the Participant to the Company. Notwithstanding the foregoing, the Company may authorize notice by any other means it deems desirable or efficient at a given time, such as notice by facsimile or electronic mail (e-mail). Participant agrees to notify the Company upon any change in the Participant’s residence address.

 

12.          No Guarantee of Continued Service . PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF RESTRICTED STOCK PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED OR BEING GRANTED THIS AWARD OF RESTRICTED STOCK). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

 

13.          Plan Controlling . In the event of a conflict between the terms and conditions of the Plan and this Award Agreement, the terms and conditions of the Plan shall prevail. Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Restricted Stock subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Award Agreement.

 

2
 

 

The Company and the Participant have executed this Award Agreement as of the date first written above.

 

PARTICIPANT   FIRST INTERNET BANCORP
     
    By:  
«First Name» «Last Name»   Name:  
    Title:  

  

3

 

For Further Information Contact:

First Internet Bancorp

Nicole Lorch

(317) 532-7906

 

DESCRIPTION: FIBP HOLDING COMPANY LOGO

 

FIRST INTERNET BANCORP REPORTS STRONG EARNINGS GROWTH

IN SECOND QUARTER, RECORD FIRST HALF RESULTS

 

INDIANAPOLIS, IN – July 24, 2013 - First Internet Bancorp (NASDAQ: INBK), parent company of First Internet Bank of Indiana (www.firstib.com), a premier nationwide provider of online retail banking services and commercial banking services, today announced unaudited financial results for the three months and six months ended June 30, 2013.

 

“We are reporting strong second quarter results,” said David Becker, Chairman and CEO. “Year over year, second quarter net income rose 34%, our commercial loan portfolio grew 66%, and non-interest income increased 76%.”

 

Highlights for the quarter ended June 30, 2013:

 

· Net income was a record $1.71 million or $0.59 per diluted share in the second quarter 2013 compared with $1.28 million or $0.45 per diluted share in the second quarter 2012.
· Return on average assets in second quarter 2013 increased to 1.07% from 0.83% in the prior year’s second quarter, and return on average equity rose to 10.86% compared with 8.92% in second quarter 2012.
· Total assets were $656.77 million at June 30, 2013, the highest in the company’s history, compared with $623.95 million at June 30, 2012.
· Mortgage originations grew 25% to $232.54 million in second quarter 2013 compared to $186.06 in the second quarter 2012.
· The company’s second quarter dividend of $0.06, following the company’s 3-for-2 stock split in second quarter 2013, was the equivalent of a 50% increase of its quarterly cash dividend paid in first quarter 2013.
· First Internet Bancorp common stock was added to the Russell Microcap Index, the MSCI USA Micro Cap Index and the ABA NASDAQ Community Bank Index.

 

Highlights for the six months ended June 30, 2013:

 

· For the six months ended June 30, 2013, net income was $3.20 million or $1.11 per diluted share, a company record for first half earnings.
· Commercial real estate and commercial & industrial loan activity was strong, with $45.54 million in commercial loans closed in first half 2013 compared with $26.21 million in first half 2012.
· Total non-interest income, driven by gain on loans sold, rose to $6.89 million in first half 2013 compared with $4.14 million in first half 2012.

 

“First Internet’s second quarter and first half results reflect the continuing expansion of the bank and progress toward our goal of being a strong national presence in retail and commercial banking,” said David Becker, Chairman and CEO. “We have added experienced talent to our retail and commercial lending teams and have also strengthened our finance and support teams to enhance efficiency, risk management and regulatory compliance. ”

 

 
 

 

Second Quarter Income Statement Reflects Year-Over-Year Growth in Interest and Non-Interest Income

 

For the quarter ended June 30, 2013, net income was $1.71 million or $0.59 per diluted share. Net interest income after provision for loan losses was $4.21 million in second quarter 2013, up 27% over second quarter 2012.

 

Total interest expense in second quarter 2013 declined to $1.92 million compared with $2.16 million in second quarter 2012. The company held interest rates on deposits steady as core deposits climbed, allowing the company to reduce its use of higher-cost Federal Home Loan Bank borrowings. The company’s average cost of funds was 1.35% in second quarter 2013, compared with 1.58% in second quarter 2012.

 

Net interest margin increased to 2.78% at June 30, 2013 compared with 2.63% at June 30, 2012. Loan growth, lower interest expense and management of the company’s investment portfolio contributed to the increase.

 

Total non-interest income in second quarter 2013 increased 76% to $3.82 million over second quarter 2012. Gains on loans sold and secondary market hedges contributed to the increase.

 

Total non-interest expense in second quarter 2013 was $5.62 million compared with $3.80 million in second quarter 2012. Increased salaries and benefits expense reflected continued investment in experienced talent, primarily in mortgage lending and commercial banking. To support mortgage lending growth, the company established a residential mortgage loan processing center in Tempe, Arizona, and expanded facilities in the Indianapolis area.

 

Becker stated: “While we remain committed to our efficient and highly scalable operating model with minimal reliance on brick and mortar facilities, supporting current and future growth requires investments in quality people and critical facilities.”

 

Balance Sheet, Deposit Growth, Loan Activity and Asset Quality Highlights

 

The company’s total assets of $656.77 million at June 30, 2013 demonstrated steady year-over-year growth, up from $623.95 million at June 30, 2012. Total deposits at June 30, 2013 were up 7.5%, to $561.16 million over the same quarter in the prior year.

 

Net loans after allowance for loan losses were $360.80 million at June 30, 2013 compared with $341.57 million at June 30, 2012, with the portfolio showing strong growth in commercial loans. Commercial loans comprised 35% of the company’s total loan portfolio at June 30, 2013 compared with 22% at June 30, 2012. Commercial real estate loans increased 64% to $112.68 million at June 30, 2013, compared with $68.90 million at June 30, 2012. Commercial & industrial lending grew to $15.13 million at June 30, 2013, compared with $8.12 million at June 30, 2012. The company’s commercial banking business, which in the first half was augmented with cash management services and a business credit card, continued to demonstrate gains.

 

Residential mortgage originations demonstrated positive year-over-year and consecutive quarter trends. The total value of mortgages originated grew to $232.54 million in second quarter 2013 compared with $186.06 million in the second quarter 2012. Purchase mortgages accounted for 24% of the company’s residential loan originations.

 

The company’s loan and asset quality remained strong, with non-performing loans at June 30, 2013 declining to $2.89 million from $8.37 million at June 30, 2012. The ratio of non-performing loans to total assets was 0.71% in second quarter 2013 compared with 2.19% in second quarter 2012.

 

Capital Position

 

The bank and holding company continue to exceed all regulatory capital requirements, with a Tier 1 leverage ratio of 9.00% at the bank and 9.13% at the holding company.

 

 
 

 

Outlook

 

Becker commented: “We have a robust pipeline for commercial loans. Somewhat improved economic conditions seem to be having a positive impact on commercial real estate lending opportunities, with higher levels of activity in construction and income properties. First Internet’s C&I business is performing well, and while we face considerable competition, we are committed to making quality loans.”

 

About First Internet Bancorp

 

First Internet Bancorp (NASDAQ: INBK) is the parent company of First Internet Bank of Indiana. First Internet Bank opened for business in 1999. The Bancorp became the parent of the Bank effective March 21, 2006.

 

About First Internet Bank

 

First Internet Bank of Indiana is the first state-chartered, FDIC-insured institution to operate solely via the Internet and has customers in all 50 states. Deposit services include checking accounts, regular and money market savings accounts with industry-leading interest rates, CDs and IRAs. First Internet Bank also offers consumer loans, conforming mortgages, jumbo mortgages, home equity loans and lines of credit, and commercial loans. The bank is a wholly owned subsidiary of First Internet Bancorp.

 

Safe Harbor Statement

 

This press release may contain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance or business of the company. Forward-looking statements are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Forward-looking statements are not a guarantee of future performance or results, are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the information in the forward-looking statements. Factors that may cause such differences include: changes in interest rates; risks associated with the regulation of financial institutions and holding companies, including capital requirements and the costs of regulatory compliance; failures or interruptions in communications and information systems; general economic conditions and conditions in the lending markets; competition; the plans to grow commercial lending; the loss of key members of management and other matters discussed in the press release. For a further list and description of such risks and uncertainties, see our periodic reports filed with the U.S. Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be set forth in our periodic reports .

 

Financial Tables Follow

 

 
 

 

First Internet Bancorp

Consolidated Balance Sheets (unaudited)

(in thousands)

 

    June 30, 2013     June 30, 2012  
             
Cash and due from banks     1,355       1,344  
Interest-bearing demand deposits     14,093       34,658  
Total cash and cash equivalents     15,448       36,002  
                 
Interest bearing time deposits     2,500       -  
Securities - AFS     193,934       182,671  
Loans held for sale     42,271       34,960  
                 
Gross loans     362,983       343,340  
Net deferred expenses     3,344       3,954  
Allowance for loan losses     (5,527 )     (5,727 )
Net loans     360,800       341,567  
                 
Accrued interest receivable     2,271       2,264  
FHLB stock     2,943       2,943  
Bank owned life insurance     11,735       11,346  
Goodwill     4,687       4,687  
Other real estate owned     5,156       750  
Premises and equipment     6,740       894  
Other assets     8,280       5,861  
                 
Total assets     656,765       623,945  
                 
                 
Non-interest bearing demand deposits     16,915       13,588  
Interest bearing demand deposits     73,321       64,458  
Savings and money market deposits     230,977       200,287  
Time deposits     239,949       243,692  
Total deposits     561,162       522,025  
                 
FHLB advances     23,740       40,629  
Subordinated debt     2,745       -  
Accrued interest payable     100       115  
Accrued payroll and related expenses     1,469       1,140  
Other liabilities     6,371       1,786  
Total liabilities     595,587       565,695  
                 
                 
Common stock     41,826       41,346  
Retained earnings     20,938       15,323  
Accumulated other comprehensive income / (loss)     (1,586 )     1,581  
Shareholders’ equity     61,178       58,250  
                 
Total liabilities & equity     656,765       623,945  

 

 
 

 

First Internet Bancorp

Consolidated Statements of Income (unaudited)

(in thousands, except share data)

 

    Quarter Ended  
    June 30, 2013     June 30, 2012  
             
Securities income     1,277       1,320  
Loan income     4,861       4,716  
Other interest income     21       19  
Total interest income     6,159       6,055  
                 
Deposit interest expense     1,656       1,826  
Other interest expense     267       338  
Total interest expense     1,923       2,164  
                 
Net interest income     4,236       3,891  
                 
Provision for loan losses     24       564  
                 
Net interest income after provision     4,212       3,327  
                 
Service charges and fees     179       166  
Gain on loans sold     2,249       2,034  
Gain on secondary marketing hedge     1,208       -  
Other-than-temporary impairment loss     -       (92 )
Loss on asset disposals     (4 )     (31 )
Other non-interest income     186       98  
Total non-interest income     3,818       2,175  
                 
Salaries and employee benefits     2,846       1,929  
Marketing, advertising and promotion     455       341  
Consulting and professional fees     561       272  
Data processing     232       238  
Loan expenses     285       303  
Premises and equipment     715       350  
Deposit insurance premiums     115       121  
Other non-interest expense     415       241  
Total non-interest expense     5,624       3,795  
                 
Income before taxes     2,406       1,707  
                 
Tax provision     694       428  
                 
Net Income     1,712       1,279  
                 
Diluted weighted average shares     2,888,260       2,867,763  
                 
Diluted EPS     0.59       0.45  

 

 
 

 

First Internet Bancorp

Consolidated Statements of Income (unaudited)

(in thousands, except share data)

 

    Six Months Ended  
    June 30, 2013     June 30, 2012  
             
Securities income     2,046       2,666  
Loan income     9,903       9,513  
Other interest income     39       37  
Total interest income     11,988       12,216  
                 
Deposit interest expense     3,284       3,646  
Other interest expense     575       677  
Total interest expense     3,859       4,323  
                 
Net interest income     8,129       7,893  
                 
Provision for loan losses     158       1,134  
                 
Net interest income after provision     7,971       6,759  
                 
Service charges and fees     338       361  
Gain on loans sold     5,260       3,785  
Gain on secondary marketing hedge     1,208       -  
Other-than-temporary impairment loss     (34 )     (92 )
Loss on asset disposals     (268 )     (101 )
Other non-interest income     384       190  
Total non-interest income     6,888       4,143  
                 
Salaries and employee benefits     5,225       3,920  
Marketing, advertising and promotion     827       732  
Consulting and professional fees     1,214       599  
Data processing     446       468  
Loan expenses     365       488  
Premises and equipment     1,116       762  
Deposit insurance premiums     227       219  
Other non-interest expense     850       489  
Total non-interest expense     10,270       7,677  
                 
Income before taxes     4,589       3,225  
                 
Tax provision     1,389       800  
                 
Net Income     3,200       2,425  
                 
Diluted weighted average shares     2,887,207       2,866,174  
                 
Diluted EPS     1.11       0.85  

 

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