INBK Stock Forecast & Price Target

First Internet Bancorp has demonstrated a significant 29% increase in end-of-period deposits quarter-over-quarter, with management anticipating continued strong deposit growth through 2025 thanks to successful partnerships with fintech companies. The company's efficiency ratio of 57% is currently more favorable than market expectations, with projections indicating improvement to 55% by the fourth quarter of 2026, supported by robust net interest income and fee income growth. Additionally, the bank experienced a 2% quarter-over-quarter growth in end-of-period loans held for investment, with commercial loan balances rising by 3%, highlighting a positive trend in lending activities.

First Internet Bancorp has reported significant declines in noninterest income, which decreased 46.7% quarter-over-quarter and 49.6% year-over-year, mainly due to lower GOS fees not meeting expectations, despite an offset by increased other income. The company's net interest income (NII) of $31.5 million fell short of consensus estimates by 5%, compounded by a less-than-anticipated net interest margin (NIM) expansion and a notable decrease in tangible book value and tangible common equity. Additionally, elevated net charge-offs (NCOs), particularly concerning SBA and franchise finance loans, indicate ongoing credit quality challenges that could impact the bank's profitability trajectory moving forward.