DEF: First Internet Bancorp Sets 2026 Annual Meeting Agenda

First Internet Bancorp announces its 2026 Annual Meeting of Shareholders to be held virtually on May 18, 2026, outlining key proposals and executive compensation decisions following a strategic 2025.

Summary

• The 2026 Annual Meeting of Shareholders for First Internet Bancorp will be held virtually on Monday, May 18, 2026, at 1:00 p.m. Eastern Time.
• Shareholders will vote on the election of eight directors, an advisory (non-binding) vote on named executive officer compensation, and the ratification of Forvis Mazars, LLP as the independent registered public accounting firm for 2026.
• The Board of Directors recommends a vote FOR all three proposals.
• For 2025, the company reported a negative GAAP net income of $(35.168) million, a significant decrease from $25.276 million in 2024.
• Despite the negative net income, total operating revenue increased by 19% to $155 million, net interest income rose by 30% to $114 million, and the fully-tax equivalent net interest margin increased by 35 basis points to 2.09% in 2025.
• The company's fintech partnerships business saw year-over-year total revenue growth of 135% and annual payments volume increased by 228% to $166 billion in 2025.
• Executive officers did not receive any cash bonuses for 2025, and performance-based restricted stock units (PRSUs) granted in 2023 were forfeited due to not meeting the return on average assets goal.
• The company completed a strategic sale of approximately $851 million of lower-coupon, fixed-rate single tenant lease financing loans in Fall 2025, which negatively impacted 2025 earnings but is expected to improve capital, interest rate risk, and future profitability.
• The CEO Pay Ratio for 2025 was 16.5:1, with the CEO's total compensation at $1,492,001 and the median employee's at $90,407.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing with a cautious sentiment. While strategic moves like the loan sale are intended for long-term benefit and fintech growth is strong, the immediate impact of negative net income and increased nonperforming assets in 2025, leading to no executive bonuses and forfeited equity, indicates significant near-term financial challenges.

Positives

• Total operating revenue increased by 19% to $155 million in 2025.
• Net interest income grew by 30% to $114 million in 2025.
• Fully-tax equivalent net interest margin increased by 35 basis points to 2.09% in 2025.
• Adjusted pre-provision net revenue increased by 44% to $60 million in 2025.
• The fintech partnerships business experienced robust growth, with year-over-year total revenue up 135% and annual payments volume up 228% to $166 billion.
• The company maintained strong liquidity with $1.1 billion of deposits off balance sheet and over $2.1 billion in cash and unused borrowing capacity as of year-end 2025.
• Achieved a 6.3% ten-year compound annual growth in tangible book value per share.
• Ranked as the 7th largest SBA 7(a) lender for the most recently completed fiscal year, demonstrating commitment to small business lending.
• The strategic sale of $851 million in fixed-rate loans, while impacting 2025 earnings, strengthened capital and interest rate risk positions, accelerating balance sheet optimization for expected improved profitability in 2026 and beyond.

Negatives

• The company reported a negative GAAP net income of $(35.168) million for 2025, a significant decline from $25.276 million in 2024.
• The Nonperforming Assets Ratio increased to 1.10% in 2025 from 0.50% in 2024.
• Tangible common equity decreased to $355.080 million in 2025 from $379.376 million in 2024.
• Tangible assets decreased to $5,566.960 million in 2025 from $5,733.172 million in 2024.
• Tangible book value per common share decreased to $40.87 in 2025 from $43.77 in 2024.
• Named Executive Officers did not receive any cash bonuses for 2025 due to the company not reporting positive net income.
• Performance-based restricted stock units (PRSUs) granted in 2023 were forfeited because the return on average assets goal was not met.

Risks

• Cybersecurity risks are overseen by the Risk Committee.
• Legal and regulatory compliance risks are overseen by the Risk Committee.
• Operational risks are overseen by the Risk Committee.
• Liquidity risks are overseen by the Risk Committee.
• Market and credit risks are overseen by the Risk Committee.
• Risks related to accounting matters and financial reporting are overseen by the Audit Committee.
• Compensation policies and practices are assessed to ensure they do not encourage risk-taking that is reasonably likely to have a material adverse effect on the company, with the Nonperforming Asset Ratio metric used to disincentivize credit risk.
• A detailed discussion of risks, uncertainties, and changes in circumstances that could cause actual results and events to differ materially from forward-looking statements is included in the Risk Factors section of the Annual Report on Form 10-K for the year ended December 31, 2025.

Future Outlook

The strategic sale of lower-coupon, fixed-rate single tenant lease financing loans in Fall 2025, despite its negative impact on 2025 earnings, is expected to lead to improved profitability metrics and position the Company for more consistent earnings in 2026 and beyond. The company aims to continue strengthening its long-term earnings profile, capital position, and strategic foundation.

Management Comments

• "2025 was a year of tough decisions and strategic positioning for the Company and its wholly-owned subsidiary, First Internet Bank of Indiana."
• "The Bank continued its concerted effort to reposition its balance sheet and decrease interest rate sensitivity, replacing longer-term fixed rate assets with shorter term, variable rate assets to drive net interest income higher and enhance net interest margin."
• "While the loss on the sale negatively impacted 2025 earnings, the transaction strengthened the Company's capital and interest rate risk positions and accelerated the optimization of its balance sheet, which is expected to lead to improved profitability metrics and position the Company for more consistent earnings in 2026 and beyond."
• "Despite the nearterm impact on earnings, the Company made meaningful progress in strengthening its longterm earnings profile, capital position, and strategic foundation."
• "Our focus on employees is evident in the number of best workplace awards we have been honored with over the years, including being named one of Central Indianas Top Workplaces by The Indianapolis Star for twelve years in a row."

Industry Context

StockSavvy.ai notes that First Internet Bancorp's strategic repositioning of its balance sheet by selling fixed-rate loans to decrease interest rate sensitivity aligns with broader banking industry efforts to manage interest rate risk in a volatile economic environment. The significant growth in fintech partnerships and payments volume demonstrates a successful adaptation to digital banking trends, differentiating it from traditional community banks and even larger national banks that often rely on physical branches or acquisitions for growth. The challenge in identifying a suitable peer group highlights the company's unique, branchless, national lending platform model.

Comparison to Industry Standards

• The company's unique branchless, national lending platform business model makes direct comparisons challenging, as noted by the Compensation Committee, which struggles to identify a suitable peer group.
• Unlike most large banks with a national footprint, First Internet Bancorp's growth is organic, without the benefit of any acquisition of another financial institution, wealth management division, or insurance affiliate.
• Traditional community banks with assets of $3.5 billion to $6 billion generally do not have First Internet Bancorp's national deposit customer base or a national lending platform and often grow through acquisitions and maintain branch networks.
• Axos Financial, Inc., with $28 billion in assets, is included in the company's peer group for compensation decisions because its business model most closely follows First Internet Bancorp's, despite its significantly larger asset size.
• The company finished as the 7th largest SBA 7(a) lender for the SBA's most recently completed fiscal year, demonstrating strong performance in small business lending compared to other institutions.

Corporate Governance

Related Party Transactions

• The company made a $2,000,000 capital contribution in May 2021 to become a limited partner in GenOpp Financial Fund LP. Mr. Fenech, a director, serves as managing member of the general partner and Chief Investment Officer of the investment manager for the GenOpp Fund. The Audit Committee and independent Board members approved/ratified this investment, determining it was on market terms and beneficial to the company, with fees to the GenOpp Fund's manager/general partner never exceeding $120,000 annually.
• On October 20, 2021, SPF15, Inc. (a wholly-owned subsidiary of the Bank) executed a lease agreement with Tiburon LLC. David Becker, Chairman and CEO, later invested in and became an indirect co-owner and officer of Tiburon. The Audit Committee and independent Board members approved/ratified the lease, determining it was negotiated on market terms prior to Mr. Becker's involvement and was fair and beneficial to the company. SPF15, Inc. received $227,814.03 in payments from Tiburon in 2024 and $329,065 in 2025.
• The Bank engages in ordinary course banking transactions (loans and services) with directors, executive officers, and employees on substantially the same terms as non-related parties, in compliance with the Federal Reserve Act and Regulation O. All such loan transactions were performing in accordance with their terms as of the proxy statement date.

Stakeholder Impact

• **Shareholders**: Asked to vote on director elections, executive compensation, and auditor ratification. Impacted by the negative 2025 net income and strategic loan sale, with potential for improved future profitability. Executive compensation structure aims to align with shareholder value creation through performance-based awards and ownership guidelines.
• **Executive Officers (NEOs)**: Experienced no cash bonuses and forfeited 2023 PRSUs due to 2025 performance, reinforcing the company's pay-for-performance philosophy. Base salaries increased for 2026, and long-term incentives (PRSUs, TRSUs) were granted for 2026, subject to future performance and vesting conditions.
• **Employees**: Benefit from broad-based benefits, 401(k) matching contributions, and an Employee Stock Purchase Plan. The company's culture, recognized with 'best workplace' awards, aims to foster growth, innovation, and excellent customer service. The median employee's annual total compensation for 2025 was $90,407.
• **Customers**: Benefit from the company's continued growth in small business lending, evidenced by its ranking as the 7th largest SBA 7(a) lender, and its digital banking model providing nationwide access to financial services.
• **Regulatory Authorities**: The company operates under the oversight of the SEC, Nasdaq, FDIC, and Federal Reserve, with the Board's Risk and Audit Committees ensuring compliance with applicable banking laws and regulations.

Next Steps

• Shareholders are invited to attend the 2026 Annual Meeting virtually on May 18, 2026, to vote on proposals.
• Shareholders will vote on the election of eight directors to serve until the next annual meeting.
• Shareholders will cast an advisory (non-binding) vote on the compensation paid to named executive officers.
• Shareholders will ratify the appointment of Forvis Mazars, LLP as the independent registered public accounting firm for 2026.
• The company expects improved profitability metrics and more consistent earnings in 2026 and beyond as a result of balance sheet optimization.
• 2026 performance-based restricted stock units (PRSUs) have a three-year performance period ending December 31, 2028.
• 2026 time-vested restricted stock units (TRSUs) will vest in three substantially equal installments on January 31, 2027, 2028, and 2029.

Key Dates

Recommendation

The company's 2025 performance, marked by a significant net loss and forfeiture of executive performance-based compensation, indicates substantial near-term headwinds. However, the strategic loan sale and strong growth in fintech partnerships, coupled with robust liquidity, suggest a deliberate repositioning for long-term profitability. Investors should hold to observe if the anticipated improvements in profitability and consistent earnings materialize in 2026 and beyond, as the company navigates its balance sheet optimization.

Keywords

First Internet Bancorp, INBK, Proxy Statement, Annual Meeting, Executive Compensation, Corporate Governance, Financial Performance, Fintech, Banking, Loan Sale, Risk Management, Shareholder Vote, Director Election, Auditor Ratification