DEF 14A: First Internet Bancorp Announces 2024 Annual Meeting of Shareholders

First Internet Bancorp will hold its 2024 Annual Meeting of Shareholders virtually on May 20, 2024, to vote on director elections, executive compensation, and auditor ratification.

Summary

• First Internet Bancorp is holding its 2024 Annual Meeting of Shareholders virtually on May 20, 2024.
• Shareholders will vote on the election of eight directors, an advisory vote on executive compensation, and the ratification of FORVIS, LLP as the independent auditor for 2024.
• The record date for determining shareholders eligible to vote is March 22, 2024.
• The proxy materials were mailed to shareholders on or about March 28, 2024.
• The board recommends voting for all director nominees, the advisory vote on executive compensation, and the ratification of the auditor.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While it highlights positive financial performance and strategic initiatives, it also acknowledges challenges and risks. The overall tone is cautiously optimistic.

Positives

• The company grew book value and tangible book value, with increases of $1.71 and $1.69, or 4.2%, respectively, year over year.
• The company has grown tangible book value at a compounded annual growth rate in excess of 8% over the last ten years.
• The company had a record-high $4.1 billion in deposits and $5.2 billion in total assets in 2023.
• The company's loan portfolio totaled $3.8 billion at year-end, up 10.0% compared to year-end 2022.
• Deposits increased over 18% year-over-year to $4.1 billion.
• Asset quality remained strong, with nonperforming assets representing just 20 basis points of total assets at year-end, and nonperforming loans representing just 26 basis points of total loans.
• The company has $1.6 billion in cash and unused borrowing capacity as of year-end.
• Uninsured deposits represent only 25% of total deposits, or 19% after excluding Indiana-based public funds and certain deposits under contractual agreements that restrict withdrawals.
• The company exited the residential mortgage origination business to remove an element of volatility from future earnings.

Negatives

• The company's unique business model limits the efficacy of peer group data for compensation analysis.
• The company's performance level with respect to net income was below threshold for the 2023 Annual Bonus Plan.
• The company's performance level with respect to net interest income was below threshold for the 2023 Annual Bonus Plan.
• None of the PRSUs granted to NEOs in 2021 vested, and those PRSUs were forfeited.

Risks

• The proxy statement includes forward-looking statements that are subject to significant risks, uncertainties, and changes in circumstances that could cause actual results to differ materially.
• A detailed discussion of risks, uncertainties, and changes in circumstances that could cause actual results and events to differ materially from such forward-looking statements is included in the section titled 'Risk Factors' in the company's Annual Report on Form 10-K for the year ended December 31, 2023.

Future Outlook

The company expects net interest margin (NIM) to continue to improve throughout 2024.

Management Comments

• The company is well-positioned to celebrate its twenty-five (25) year anniversary, emerging from 2023 with a record-high $4.1 billion in deposits and $5.2 billion in total assets.
• Over the last ten years, we have grown tangible book value at a compounded annual growth rate in excess of 8%.
• This track record of growth in book value per share is a testament to the strong stewardship of our Board and executive officers, who have maintained focus on a strong credit culture and strategic growth while positioning the Company to capitalize on its unique, digital brand.

Industry Context

The company highlights its unique digital brand and national footprint, distinguishing itself from traditional community banks and larger banks with brick-and-mortar branches.

Comparison to Industry Standards

• The document compares First Internet Bancorp to a peer group of bank and financial holding companies with asset sizes ranging from $2.5 billion to $9 billion, excluding those with significant wealth management, insurance, or mortgage servicing revenue.
• The peer group includes companies such as Axos Financial Inc., Bridgewater Bancshares, Inc., and Brookline Bancorp, Inc.
• The company's nonperforming assets ratio is compared to industry benchmarks to demonstrate its strong credit quality.

Management Changes

Corporate Governance

Related Party Transactions

• The company made a $2,000,000 capital contribution in May of 2021 to become a limited partner in the GenOpp Fund owning less than 5.0% of the GenOpp Funds outstanding partner interests.
• On October 20, 2021, SPF15, Inc., a wholly-owned subsidiary of the Bank, executed a lease and management agreement (the Lease) with Monterey Grill Two LLC k/n/a Tiburon LLC (Tiburon).

Stakeholder Impact

• Shareholders are provided with information to make informed decisions regarding director elections, executive compensation, and auditor ratification.
• Employees are impacted by the company's compensation policies and benefit programs.
• The company's performance and strategic initiatives affect customers, suppliers, and creditors.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its 2024 Annual Meeting of Shareholders on May 20, 2024.
• The Compensation Committee will consider the outcome of the advisory vote on executive compensation when making future decisions.

Key Dates

Keywords

annual meeting, shareholders, proxy statement, directors, executive compensation, FORVIS LLP, First Internet Bancorp, voting