8-K: First Internet Bancorp Q2 2026 Earnings Show Strong Growth

First Internet Bancorp reported a significant increase in net income and diluted EPS for the second quarter of 2026, driven by revenue momentum and improved credit quality.

Summary

• First Internet Bancorp announced its financial results for the second quarter ended June 30, 2026, reporting a net income of $2.4 million, a substantial increase from $0.2 million in the prior year period.
• Diluted earnings per share (EPS) also saw a significant rise to $0.27, up from $0.02 in the second quarter of 2025.
• Total revenue for the quarter grew by 23% year-over-year to $41.1 million.
• Net interest income increased by 16% to $32.4 million, with the fully-taxable equivalent (FTE) net interest margin expanding by 43 basis points to 2.47%.
• Noninterest income surged by 56% year-over-year to $8.7 million, largely due to the growth of the Banking-as-a-Service (BaaS) platform.
• Pre-provision net revenue (PPNR) grew by 28% year-over-year to $15.0 million.
• The company reported a provision for credit losses of $13.4 million, a decrease from $16.3 million in the first quarter of 2026.
• Nonaccrual loans declined by 14% from the first quarter, and delinquencies 30 days or more past due decreased to 0.78% of total performing loans.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with strong year-over-year growth in key financial metrics and clear signs of improving credit quality, indicating effective management strategies.

Positives

• Significant improvement in credit quality with a 14% decline in total nonaccrual loans quarter-over-quarter.
• Delinquencies 30 days or more past due decreased to 0.78% of total performing loans, down from 1.06% in Q1 2026.
• Revenue momentum, with total revenue up 23% year-over-year to $41.1 million.
• Net interest income increased by 16% year-over-year to $32.4 million.
• FTE net interest margin expanded by 43 basis points to 2.47%.
• Noninterest income grew 56% year-over-year to $8.7 million, driven by BaaS platform growth.
• Pre-provision net revenue (PPNR) increased 28% year-over-year to $15.0 million.
• Loan pipelines are solid, setting the stage for continued loan growth in the second half of 2026.

Negatives

• Total deposits decreased by $150.3 million, or 3%, from the first quarter of 2026.
• Net charge-offs to average loans increased to 1.77% from 1.65% in the first quarter of 2026, reflecting the resolution of nonperforming franchise finance loans.
• Nonperforming loans (NPLs) to total loans remained at 1.58%, with an increase in fully-guaranteed SBA 7(a) balances contributing to a higher NPL ratio when excluding them.

Risks

• General economic conditions, whether national or regional, and conditions in the lending markets may adversely affect loan demand.
• Credit quality and related levels of nonperforming assets and loan losses, and the value and salability of collateral.
• Failures or breaches of communications and information systems.
• Competition with national, regional, and community financial institutions.
• The loss of key members of senior management.
• The anticipated impacts of inflation and rising interest rates on the general economy.
• Risks relating to the regulation of financial institutions.

Future Outlook

For the full year 2026, the company projects diluted EPS between $2.35 and $2.45. Loan growth is expected to be in the range of 4% to 6%. The FTE net interest margin is projected to expand to 2.75% to 2.80% by the fourth quarter of 2026. Noninterest income is forecasted between $40.5 million and $41 million, and noninterest expense is expected to be between $106 million and $107 million. The provision for credit losses is estimated at $47 million to $48 million, with continued improvement anticipated in the second half of the year.

Management Comments

• "Our second quarter results reflect strong momentum across the business, paired with a meaningful and encouraging improvement in our credit trends," said David Becker, Chairman and CEO.
• "Total revenue grew 23% year-over-year and pre-provision net revenue increased nearly 28%, while our fully-taxable equivalent net interest margin expanded 43 basis points to 2.47%. Just as importantly, our credit provision declined, nonperforming loans decreased sequentially for the first time in several quarters, small business lending net charge-offs improved significantly, and delinquencies across the portfolio fell sharply clear evidence that the proactive credit actions we have taken over the past several quarters are working."
• "We are equally encouraged by the acceleration of our fee-based businesses. Noninterest income grew more than 56% year-over-year, driven by the continued strength of our Banking-as-a-Service platform and the deepening of our fintech partnerships, including an expanded relationship with jaris under which we will retain all small business loans originated through its platform."
• "With improving credit, growing fee income, and a more capital-efficient balance sheet, we are well-positioned to build on this momentum through the remainder of 2026 and beyond."

Industry Context

StockSavvy.ai notes that First Internet Bancorp's performance in Q2 2026, particularly the strong growth in BaaS-driven noninterest income and improving credit metrics, aligns with broader trends in the digital banking sector where fintech partnerships are becoming a key differentiator for revenue diversification and customer acquisition.

Comparison to Industry Standards

• The reported FTE net interest margin of 2.47% for Q2 2026 is an improvement from the industry average, which has been under pressure due to interest rate fluctuations.
• The 56% year-over-year growth in noninterest income, largely from the BaaS platform, significantly outpaces the average growth seen in traditional banks, highlighting a successful diversification strategy.
• The company's focus on specialized lending verticals and digital channels positions it against competitors like Cross River Bank and LendingClub, which also leverage technology and partnerships for growth.

Stakeholder Impact

• Shareholders: Expected positive impact due to increased net income, EPS, and a positive outlook for future growth.
• Employees: Continued investment in technology and personnel may lead to new opportunities and a dynamic work environment.
• Customers: Enhanced digital capabilities and BaaS partnerships are likely to improve customer experience and product offerings.
• Creditors: Improved financial health and capital ratios suggest a stable credit profile.

Next Steps

• Host conference call and webcast to discuss Q2 2026 financial results.
• Continue to invest in AI, automation, and digital capabilities.
• Increase retention of embedded finance small business loans.
• Build on momentum through the remainder of 2026 and beyond.

Key Dates

Recommendation

The company shows strong operational improvements and a positive outlook, but the slight increase in net charge-offs and the decrease in total deposits warrant a cautious approach. Continued monitoring of credit trends and BaaS growth sustainability is advised.

Keywords

First Internet Bancorp, Q2 2026 Earnings, Net Income, EPS, Net Interest Margin, Banking-as-a-Service, Credit Quality, Loan Growth