

Exhibit No.		Description
3.1		Articles of Incorporation of First Internet Bancorp (incorporated by reference to Exhibit 3.1 to registration statement on Form 10 filed November 30, 2012)

3.2		Amended and Restated Bylaws of First Internet Bancorp as amended March 18, 2013 (incorporated by reference to Exhibit 3.2 annual report on Form 10-K for the year ended December 31, 2012)

4.1		Warrant to purchase common stock dated June 28, 2013 (incorporated by reference to Exhibit 4.1 to current report on Form 8-K filed July 5, 2013)

10.1		First Internet Bancorp 2013 Equity Incentive Plan (incorporated by reference to Appendix ZA to the definitive proxy statement on Schedule 14A filed April 9, 2013)

10.2		Form of Restricted Stock Agreement under 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to current report on Form 8-K filed July 26, 2013)*

10.3		First Internet Bancorp Directors’ Deferred Stock Plan (incorporated by reference to Exhibit 10.3 to registration statement on Form 10 filed November 30, 2012)*

10.4		Amended and Restated Employment Agreement among First Internet Bank of Indiana, First Internet Bancorp and David B. Becker dated March 28, 2013 (incorporated by reference to Exhibit 10.4 to annual report on Form 10-K for the year ended December 31, 2012)*

10.5		Change in Control Agreement between First Internet Bank of Indiana and Kay E. Whitaker dated January 14, 2013 (incorporated by reference to Exhibit 10.6 to annual report on Form 10-K for the year ended December 31, 2012)*

~~10.6~~		~~2013~~2014 Senior Management Bonus Plan (incorporated by reference to Exhibit ~~10.8~~10.1 to ~~annual~~quarterly report on Form ~~10-K~~10-Q for the ~~year~~quarterly period ended ~~December~~March 31, ~~2012)~~2014)*

~~10.7~~10.6		Contract for Purchase of Property between First Internet Bancorp and LHRET Ascension SV, LLC dated January 30, 2013 (incorporated by reference to Exhibit 10.10 to annual report on Form 10-K for the year ended December 31, 2012)

~~10.8~~10.7		Offer and Contract for Purchase of Real Estate between First Internet Bancorp and St. Vincent Hospital and Health Care Center, Inc., accepted February 5, 2013 (incorporated by reference to Exhibit 10.11 to annual report on Form 10-K for the year ended December 31, 2012)

~~10.9~~10.8		Lease dated as of March 6, 2013, by and between First Internet Bancorp and First Internet Bank of Indiana (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed March 11, 2013)

~~10.10~~10.9		Subordinated Debenture Purchase Agreement with Community BanCapital, L.P., dated June 28, 2013 (incorporated by reference to Exhibit 10.1 to current report on Form 8-K filed July 5, 2013)

~~10.11~~10.10		Subordinated Debenture dated June 28, 2013 (incorporated by reference to Exhibit 10.2 to current report on Form 8-K filed July 5, 2013)

21.1		List of Subsidiaries (incorporated by reference to Exhibit 21.1 to registration statement on Form 10 filed November 30, 2012)

23.1		Consent of Independent Registered Public Accounting Firm
24.1		Powers of Attorney
31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

	46

~~Exhibit No.~~		~~Description~~
32.1		Section 1350 Certifications



Exhibit No.		Description
101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase
��
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

__________________________________

*Management contract, compensatory plan or arrangement required to be filed as an exhibit.

	47

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, on March ~~31, 2014.~~13, 2015.



		FIRST INTERNET BANCORP

	By	/s/ David B. Becker
		David B. Becker, Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March ~~31, 2014.~~13, 2015.



/s/ David B. Becker		/s/ ~~Kay E. Whitaker~~Kenneth J. Lovik
David B. Becker, Chairman, President, Chief Executive Officer and Director (Principal Executive Officer)		~~Kay E. Whitaker,~~Kenneth J. Lovik, Senior Vice ~~President-Finance,~~President and Chief Financial Officer ~~and Secretary~~ (Principal Financial Officer)

~~/s/ John K. Keach, Jr.~~*		~~/s/ David R. Lovejoy~~*
John K. Keach, Jr.,Director		David R. Lovejoy,Director

~~/s/ Ann D. Murtlow~~*		~~/s/ Ralph R. Whitney, Jr.~~*
Ann D. Murtlow,Director		Ralph R. Whitney, Jr.,Director

~~/s/ Jerry Williams~~*		~~/s/ Jean L. Wojtowicz~~*
Jerry Williams,Director		Jean L. Wojtowicz,Director

_____________________________

	48
*	David B. Becker, by signing his name hereto, does hereby sign this document on behalf of each of the above-named directors of the Registrant pursuant to powers of attorney duly executed by such persons.



	By:	/s/ David B. Becker
		David B. Becker, Attorney-in-Fact

First Internet Bancorp

December 31, 2014 and 2013

Contents

~~First Internet Bancorp~~

~~December 31, 2013 and 2012~~

~~Contents~~

~~Report~~

Reports of Independent Registered Public Accounting Firm	F-2

Consolidated Financial Statements

Balance Sheets	~~F-3~~ F-4

Statements of Income	~~F-4~~ F-5

Statements of Comprehensive Income	~~F-5~~ F-6

Statements of Shareholders’ Equity	~~F-6~~ F-7

Statements of Cash Flows	~~F-7~~ F-8

Notes to Financial Statements	~~F-8~~ F-9

	~~F-1~~

~~Report~~

F-1

Reports of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Shareholders

First Internet Bancorp

Indianapolis, Indiana

We have audited the accompanying consolidated balance sheets of First Internet Bancorp (the “Company”) as of December 31, ~~2013~~2014 and ~~2012,~~2013, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for the years then ended. The ~~Company's~~Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. ~~The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.~~ Our audits included consideration of internal control over financial reporting as a basis for designing auditing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits also included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Internet Bancorp as of December 31, ~~2013~~2014 and ~~2012,~~2013, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), First Internet Bancorp’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 13, 2015, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/BKD, LLP

Indianapolis, Indiana

March 13, 2015

F-2

Audit Committee, Board of Directors and Shareholders

First Internet Bancorp

Indianapolis, Indiana

We have audited First Internet Bancorp’s (the “Company”) internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management’s Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, First Internet Bancorp maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of First Internet Bancorp and our report dated March 13, 2015, expressed an unqualified opinion thereon.

/s/ BKD, LLP

Indianapolis, Indiana

	~~F-2~~

March 13, 2015

F-3

First Internet Bancorp

Consolidated Balance Sheets

(Amounts in thousands except share data)



	December 31,
	2014			2013
Assets
Cash and due from banks	$	1,940		$	2,578
Interest-bearing demand deposits	26,349			51,112
Total cash and cash equivalents	28,289			53,690
Interest-bearing time deposits	2,000			2,500
Securities available for sale - at fair value (amortized cost of $137,727 in 2014 and $185,091 in 2013)	137,518			181,409
Loans held-for-sale (includes $32,618 and $24,254 at fair value in 2014 and 2013, respectively)	34,671			28,610
Loans receivable	732,426			501,153
Allowance for loan losses	(5,800		)	(5,426		)
Net loans receivable	726,626			495,727
Accrued interest receivable	2,833			2,904
Federal Home Loan Bank of Indianapolis stock	5,350			2,943
Cash surrender value of bank-owned life insurance	12,325			11,935
Premises and equipment, net	7,061			7,134
Goodwill	4,687			4,687
Other real estate owned	4,488			4,381
Accrued income and other assets	4,655			6,422
Total assets	$	970,503		$	802,342

Liabilities and Shareholders’ Equity
Liabilities
Noninterest-bearing deposits	$	21,790		$	19,386
Interest-bearing deposits	736,808			653,709
Total deposits	758,598			673,095
Advances from Federal Home Loan Bank	106,897			31,793
Subordinated debt	2,873			2,789
Accrued interest payable	97			102
Accrued expenses and other liabilities	5,253			3,655
Total liabilities	873,718			711,434
Commitments and Contingencies
Shareholders’ Equity
Preferred stock, no par value; 4,913,779 shares authorized; issued and outstanding - none	—			—
Voting common stock, no par value; 45,000,000 shares authorized; 4,439,575 and 4,448,326 shares issued and outstanding, respectively	71,774			71,378
Nonvoting common stock, no par value; 86,221 shares authorized; issued and outstanding - none	—			—
Retained earnings	25,146			21,902
Accumulated other comprehensive loss	(135		)	(2,372		)
Total shareholders’ equity	96,785			90,908
Total liabilities and shareholders’ equity	$	970,503		$	802,342

December 31,
2013 2012

Assets
Cash and due from banks $ 2,578 $ 2,881
Interest-bearing demand deposits 51,112 29,632
Total cash and cash equivalents 53,690 32,513
Interest-bearing time deposits 2,500 —
Securities available for sale - at fair value (amortized cost of $185,091 in 2013 and
    $153,896 in 2012) 181,409 156,693
Loans held for sale (includes $24,254 and $0 at fair value, respectively) 28,610 63,234
Loans receivable - net of allowance for loan losses of $5,426 and $5,833 at
    December 31, 2013 and 2012, respectively 495,727 352,328
Accrued interest receivable 2,904 2,196
Federal Home Loan Bank of Indianapolis stock 2,943 2,943
Cash surrender value of bank-owned life insurance 11,935 11,539
Premises and equipment, net 7,134 793
Goodwill 4,687 4,687
Other real estate owned 4,381 3,666
Accrued income and other assets 6,422 5,775
Total assets $ 802,342 $ 636,367

Liabilities and Shareholders’ Equity
Liabilities
Non-interest bearing deposits $ 19,386 $ 13,187
Interest-bearing deposits 653,709 517,504
Total deposits 673,095 530,691
Advances from Federal Home Loan Bank 31,793 40,686
Subordinated debt 2,789 —
Accrued interest payable 102 120
Accrued expenses and other liabilities 3,655 3,520
Total liabilities 711,434 575,017

Shareholders’ Equity
Preferred stock, no par value; 4,913,779 shares authorized; issued and
    outstanding - none — —
Voting common stock, no par value; 45,000,000 shares authorized; 4,448,326 and
    2,815,094 shares issued and outstanding, respectively 71,378 41,508
Nonvoting common stock, no par value; 86,221 shares authorized; issued and
    outstanding - none — —
Retained earnings 21,902 18,024
Accumulated other comprehensive income (loss) (2,372) 1,818
Total shareholders’ equity 90,908 61,350
Total liabilities and shareholders’ equity $ 802,342 $ 636,367

See Notes to Consolidated Financial Statements

F-4

	~~F-3~~

First Internet Bancorp

Consolidated Statements of Income

(Amounts in thousands except share and per share data)



	Year Ended December 31,
	2014			2013
Interest Income
Loans	$	27,875		$	20,843
Securities – taxable	3,036			2,891
Securities – non-taxable	58			1,611
Other earning assets	246			191
Total interest income	31,215			25,536
Interest Expense
Deposits	7,653			6,861
Other borrowed funds	1,275			1,227
Total interest expense	8,928			8,088
Net Interest Income	22,287			17,448
Provision for Loan Losses	349			324
Net Interest Income After Provision for Loan Losses	21,938			17,124
Noninterest Income
Service charges and fees	707			687
Mortgage banking activities	5,609			8,682
Other-than-temporary impairment
Total loss related to other than temporarily impaired securities	—			(129		)
Portion of loss recognized in other comprehensive income (loss)	—			80
Other-than-temporary impairment loss recognized in net income	—			(49		)
Gain (loss) on sale of securities	538			(63		)
Loss on asset disposals	(78		)	(146		)
Other	398			406
Total noninterest income	7,174			9,517
Noninterest Expense
Salaries and employee benefits	12,348			10,250
Marketing, advertising, and promotion	1,455			1,858
Consulting and professional fees	1,902			2,152
Data processing	995			911
Loan expenses	626			799
Premises and equipment	2,937			2,196
Deposit insurance premium	591			451
Other	1,808			1,865
Total noninterest expense	22,662			20,482
Income Before Income Taxes	6,450			6,159
Income Tax Provision	2,126			1,566
Net Income	$	4,324		$	4,593
Income Per Share of Common Stock
Basic	$	0.96		$	1.51
Diluted	0.96			1.51
Weighted-Average Number of Common Shares Outstanding
Basic	4,497,007			3,041,666
Diluted	4,507,995			3,050,001
Dividends Declared Per Share	$	0.24		$	0.22

Year Ended
December 31,
2013 2012
Interest Income
Loans $ 20,843 $ 19,560
Securities – taxable 3,082 3,133
Securities – non-taxable 1,611 1,681
Total interest income 25,536 24,374
Interest Expense
Deposits 6,861 7,172
Other borrowed funds 1,227 1,360
Total interest expense 8,088 8,532
Net Interest Income 17,448 15,842
Provision for Loan Losses 324 2,852
Net Interest Income After Provision for Loan Losses 17,124 12,990
Noninterest Income
Service charges and fees 687 685
Mortgage banking activities 8,682 10,647
Other-than-temporary impairment
Total loss related to other than temporarily impaired securities (129) (1,452)
Portion of loss recognized in other comprehensive income (loss) 80 1,200
Other-than-temporary impairment loss recognized in net income (49) (252)
Gain (loss) on sale of securities (63) 48
Loss on asset disposals (146) (93)
Other 406 388
Total noninterest income 9,517 11,423
Noninterest Expense
Salaries and employee benefits 10,458 8,529
Marketing, advertising, and promotion 1,870 1,362
Consulting and professional fees 2,267 1,422
Data processing 916 897
Loan expenses 800 1,097
Premises and equipment 1,923 1,711
Deposit insurance premium 451 455
Other 1,797 1,140
Total noninterest expense 20,482 16,613
Income Before Income Taxes 6,159 7,800
Income Tax Provision 1,566 2,194
Net Income $ 4,593 $ 5,606
Income Per Share of Common Stock
Basic $ 1.51 $ 1.95
Diluted 1.51 1.95
Weighted-Average Number of Common Shares Outstanding
Basic 3,041,666 2,869,365
Diluted 3,050,001 2,869,365
Dividends Declared Per Share $ 0.2200 $ 0.1667

See Notes to Consolidated Financial Statements

F-5

	~~F-4~~

First Internet Bancorp

Consolidated Statements of Comprehensive Income

(Dollar amounts in thousands)


	Year Ended
	December 31,				Year Ended December 31,
	2013		2012		2014			2013
Net income	$	4,593	$	5,606	$	4,324		$	4,593
Other comprehensive income (loss)
Net unrealized holding gains (losses) on securities available for sale		(6,462)		2,161	3,260			(6,462		)
Reclassification adjustment for (gains) losses realized		63		(48)	(538		)	63
Net unrealized holding losses on securities available for sale for which an other-than- temporary impairment has been recognized in income		(129)		(1,452)
Net unrealized holding gains (losses) on securities available for sale for which an other-than-temporary impairment has been recognized in income					751			(129		)
Reclassification adjustment for other-than-temporary impairment loss recognized in income		49		252	—			49
Other comprehensive income (loss) before tax		(6,479)		913	3,473			(6,479		)
Income tax provision (benefit)		(2,289)		315	1,236			(2,289		)
Other comprehensive income (loss) - net of tax		(4,190)		598	2,237			(4,190		)
Comprehensive income	$	403	$	6,204	$	6,561		$	403

See Notes to Consolidated Financial Statements

F-6

	~~F-5~~

First Internet Bancorp

Consolidated Statements of Shareholders’ Equity

~~(Dollar amounts in thousands except per share data)~~

Accumulated
Voting and Other
Nonvoting Comprehensive Total
Common Income Retained Shareholders’
Stock (Loss) Earnings Equity
Balance, January 1, 2012 $ 41,306 $ 1,220 $ 12,897 $ 55,423
Net income — — 5,606 5,606
Other comprehensive income — 598 — 598
Cash dividends declared ($0.1667 per share) — — (479) (479)
Recognition of the fair value of share-based compensation 107 — — 107
Issuance of directors' deferred stock rights 95 — — 95
Balance, December 31, 2012 41,508 1,818 18,024 61,350
Net income — — 4,593 4,593
Other comprehensive loss — (4,190) — (4,190)
Cash dividends declared ($0.2200 per share) — — (715) (715)
Recognition of the fair value of share-based compensation 387 — — 387
Issuance of common stock warrants 255 — — 255
Issuance of directors' deferred stock rights 127 — — 127
Net cash proceeds from common stock issuance 29,101 — — 29,101
Balance, December 31, 2013 $ 71,378 $ (2,372) $ 21,902 $ 90,908

~~See Notes to Consolidated Financial Statements~~

	~~F-6~~

~~First Internet Bancorp~~

~~Consolidated Statements of Cash Flows~~

~~Years Ended December 31, 2013 and 2012~~

(Dollar amounts in thousands except per share data)

Year Ended December 31,
2013 2012
Operating Activities
Net income $ 4,593 $ 5,606
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Depreciation and amortization 2,257 2,862
Loss (gain) from real estate owned 11 (99)
Increase in cash surrender value of bank-owned life insurance (396) (378)
Provision for loan losses 324 2,852
Stock compensation expense 514 202
Loss on other-than-temporary impairment of securities 49 252
Gain (loss) from sale of available-for-sale securities 63 (48)
Loans originated for sale (741,078) (738,225)
Proceeds from sale of loans 784,077 730,729
Gain on loans sold (8,379) (10,647)
Unrealized loss on loans held-for-sale 4 —
Gain on derivatives (307) —
Net change in:
Accrued interest receivable (708) (67)
Other assets 552 417
Accrued expenses and other liabilities (36) 861
Net cash provided by (used in) operating activities 41,540 (5,683)
Investing Activities
Net change in loans (61,039) (19,274)
Net change in interest bearing deposits (2,500) —
Loans purchased (83,265) (9,737)
Bank owned life insurance purchased — (3,000)
Proceeds from liquidation of other real estate owned 1,268 1,345
Maturities of securities available for sale 29,757 45,625
Proceeds from sale of securities available for sale 72,019 4,223
Purchase of securities available for sale (134,471) (59,002)
Purchase of premises and equipment (7,187) (309)
Net cash used in investing activities (185,418) (40,129)
Financing Activities
Net increase in deposits 142,404 44,026
Cash dividends paid (450) (479)
Proceeds from issuance of subordinated debt and related warrants 3,000 —
Net proceeds from common stock issuance 29,101 —
Repayment of FHLB advances (22,000) —
Proceeds from FHLB advances 13,000 —
Net cash provided by financing activities 165,055 43,547
Net Increase (Decrease) in Cash and Cash Equivalents 21,177 (2,265)
Cash and Cash Equivalents, Beginning of Year 32,513 34,778
Cash and Cash Equivalents, End of Year $ 53,690 $ 32,513
Supplemental Disclosures of Cash Flows Information
Cash paid during the year for interest $ 8,106 $ 8,532
Cash paid during the year for taxes 770 2,253
Loans transferred to real estate owned 581 3,401
Cash dividends declared, not paid 265 —



	Voting and Nonvoting Common Stock			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Shareholders’ Equity
Balance, January 1, 2013	$	41,508		$	1,818		$	18,024		$	61,350
Net income	—			—			4,593			4,593
Other comprehensive loss	—			(4,190		)	—			(4,190		)
Cash dividends declared ($0.22 per share)	—			—			(715		)	(715		)
Recognition of the fair value of share-based compensation	514			—			—			514
Issuance of common stock warrants	255			—			—			255
Net cash proceeds from common stock issuance	29,101			—			—			29,101
Balance, December 31, 2013	71,378			(2,372		)	21,902			90,908
Net income	—			—			4,324			4,324
Other comprehensive income	—			2,237			—			2,237
Cash dividends declared ($0.24 per share)	—			—			(1,080		)	(1,080		)
Recognition of the fair value of share-based compensation	507			—			—			507
Common stock redeemed for the net settlement of share-based awards	(71		)	—			—			(71		)
Other	(40		)	—			—			(40		)
Balance, December 31, 2014	$	71,774		$	(135	)	$	25,146		$	96,785

See Notes to Consolidated Financial Statements

F-7

	~~F-7~~

First Internet Bancorp

Consolidated Statements of Cash Flows

(Dollar amounts in thousands)

Year Ended December 31,
2014 2013
Operating Activities

Net income $ 4,324
$ 4,593
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 1,904
2,257
Loss from real estate owned 71
11
Increase in cash surrender value of bank-owned life insurance (390 ) (396 )
Provision for loan losses 349
324
Stock compensation expense 507
514
Loss on other-than-temporary impairment of securities —
49
(Gain) loss from sale of available for sale securities (538 ) 63
Loans originated for sale (409,715 ) (741,078 )
Proceeds from sale of loans 409,453
784,077
Gain on loans sold (5,048 ) (8,379 )
(Increase) decrease in fair value of loans held-for-sale (751 ) 4
Loss (gain) on derivatives 190
(307 )
Deferred income tax (1,529 ) 2,259
Net change in:
Accrued income and other assets 1,964
(2,415 )
Accrued expenses and other liabilities 1,189
(36 )
Net cash provided by operating activities 1,980
41,540
Investing Activities

Net change in loans (124,696 ) (61,039 )
Net change in interest bearing deposits 500
(2,500 )
Loans purchased (106,480 ) (83,265 )
Proceeds from liquidation of other real estate owned 235
1,268
Maturities of securities available for sale 21,254
29,757
Proceeds from sale of securities available for sale 137,816
72,019
Purchase of securities available for sale (112,000 ) (134,471 )
Purchase of Federal Home Loan Bank of Indianapolis stock (2,407 ) —
Purchase of premises and equipment (915 ) (7,187 )
Net cash used in investing activities (186,693 ) (185,418 )
Financing Activities

Net increase in deposits 85,503
142,404
Cash dividends paid (1,080 ) (450 )
Proceeds from issuance of subordinated debt and related warrants —
3,000
Net proceeds from common stock issuance —
29,101
Repayment of FHLB advances (95,000 ) (22,000 )
Proceeds from FHLB advances 170,000
13,000
Other, net (111 ) —
Net cash provided by financing activities 159,312
165,055
Net (Decrease) Increase in Cash and Cash Equivalents (25,401 ) 21,177
Cash and Cash Equivalents, Beginning of Year 53,690
32,513
Cash and Cash Equivalents, End of Year $ 28,289
$ 53,690
Supplemental Disclosures of Cash Flows Information

Cash paid during the year for interest $ 8,933
$ 8,106
Cash paid during the year for taxes 2,346
770
Loans transferred to other real estate owned —
581
Cash dividends declared, not paid 265
265

See Notes to Consolidated Financial Statements

F-8

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except shares and per share data)

~~Note 1:~~

Note 1: Basis of Presentation and Summary of Significant Accounting Policies

~~Summary of Significant Accounting Policies~~

The accounting policies of First Internet Bancorp and its subsidiaries (the ~~Company)~~“Company”) conform to accounting principles generally accepted in the United States of America ~~(GAAP)~~(“GAAP”). A summary of the Company’s significant accounting policies follows:

Description of Business

The Company was incorporated onSeptember 15, 2005,, and was approved to consummate a plan of exchange on March 21, 2006, by which the Company became a bank holding company owning~~100~~% 100% of First Internet Bank of Indiana (the ~~Bank)~~“Bank”).

~~The Bank was incorporated on October 28, 1998, and was approved to accept FDIC-insured deposits on December 28, 1998. The Bank commenced operations to the public on February 22, 1999.~~ The Bank provides commercial and retail banking services, with operations conducted on the ~~World Wide Web (Internet)~~Internet atwww.firstib.com and primarily through its corporate office located in Indianapolis, ~~Indiana.~~Indiana as well as loan production offices in Tempe, Arizona and Portland, Oregon. The majority of the Bank’s income is derived from commercial lending, retail lending, and mortgage banking activities. The Bank is subject to competition from other financial institutions. The Bank is regulated by certain state and federal agencies and undergoes periodic examinations by those regulatory authorities.

JKH Realty Services, LLC was established August 20, 2012 as a single member LLC wholly owned by the Bank to manage other real estate owned properties as needed.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company utilizes processes that involve the use of significant estimates and the judgment of management in determining the amount of the Company’s allowance for credit losses and income taxes, as well as fair value measurements of investment securities, derivatives, goodwill, and loans held-for-sale.Actual results could differ from those estimates. ~~Estimates most susceptible to change in the near term include the allowance for loan losses and the fair value of securities available for sale.~~

Securities

The Company classifies its securities in one of three categories and accounts for the investments as follows:

Securities that the Company has the positive intent and ability to hold to maturity are classified as ~~“securities held~~“held to maturity” and reported at amortized cost.The Company had ~~zero~~no securities classified as ~~"securities held~~“held to ~~maturity"~~maturity” at December 31, ~~2013~~2014 and ~~2012.~~

2013.

Securities that are acquired and held principally for the purpose of selling them in the near term with the objective of generating economic profits on short-term differences in market characteristics are classified as ~~“securities held for trading”~~“trading securities” and reported at fair value, with unrealized gains and losses included in earnings.The Company had ~~zero~~no securities classified as ~~"securities held for trading"~~“trading securities” at December 31, ~~2013~~2014 and ~~2012.~~

2013.

Securities not classified as either ~~held~~“held to ~~maturity~~maturity” or ~~trading securities~~“trading securities” are classified as “securities available for sale” and reported at fair value, with unrealized gains and losses, after applicable taxes, excluded from earnings and reported in a separate component of shareholders’ equity. Declines in the value of debt securities and marketable equity securities that are considered to be other-than-temporary are recorded as an other-than-temporary impairment of securities available for sale with ~~the unrealized~~other-than-temporary impairment losses recorded in the consolidated statements of income.

	~~F-8~~

F-9

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

Interest and dividend income, adjusted by amortization of premium or discount, is included in earnings using the effective interest rate method. Purchases and sales of securities are recorded in the consolidated balance sheets on the trade date. Gains and losses from security sales or disposals are recognized as of the trade date in the consolidated statements of income for the period in which securities are sold or otherwise disposed of. Gains and losses on sales of securities are determined on the specific-identification method.

Loans ~~Held for Sale~~Held-for-Sale

Loans originated and intended for sale in the secondary market under best-efforts pricing agreements are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income.

Loans originated and intended for sale in the secondary market under mandatory pricing agreements are carried at fair value to facilitate hedging of the loans. Gains and losses resulting from changes in fair value are included in noninterest income. ~~Prior to April 1, 2013, all mortgage loans held for sale were carried at the lower of cost or fair value.~~

Gains and losses on loan sales are recorded in noninterest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon sale of loan.

Revenue Recognition

Interest income on loans is ~~based on the principal balance outstanding and is recognized~~accrued as earned onusing the interest method based on unpaid principal balances except for interest on loans in nonaccrual status. Interest on loans in nonaccrual status ~~which~~ is recorded as a reduction of loan principal when received.

Premiums and discounts are amortized using the effective interest rate method.

Loan fees, net of certain direct origination costs, primarily salaries and wages, are deferred and amortized to interest income as a yield adjustment over the life of the loan.

Loans Receivable

Loans that management has the intent and ability to hold for the foreseeable future or until maturity ~~or payoff~~ are reported at their outstanding principal balance adjusted for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans, and unamortized premiums or discounts on purchased loans.

For loans recorded at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.

Allowance for Loan Losses Methodology

Company policy is designed to maintain an adequate allowance for loan losses (“ALLL”). Primary responsibility for ensuring that the Company has processes in place to consistently assess the adequacy of the ALLL rests with the ~~Board.~~Board of Directors (the “Board”). The Board has charged management with responsibility for establishing the methodology to be used and to assess the adequacy of the ~~ALLL quarterly. Quarterly, the~~ALLL. The Board reviews recommendations from management on a quarterly basis to adjust the allowance as appropriate.

The methodology employed by management for each portfolio segment, at a minimum, contains the following:


1.	Loans are segmented by type of loan.


2.	The required ALLL for types of performing homogeneous loans which do not have a specific reserve is determined by applying a factor based on historical losses averaged over the past twelve months. In those instances where the Company’s historical experience is not available, management develops factors based on industry experience and best practices.

	~~F-9~~

F-10

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)


3.	All criticized, classified and impaired loans are tested for impairment by applying one of three methodologies:


a.	Present value of future cash flows;


b.	Fair value of collateral less costs to sell; or


c.	The loan’s observable market price


4.	All troubled debt restructurings ~~(TDR)~~(“TDR”) are considered impaired loans.


5.	Loans tested for impairment are removed from other pools to prevent layering (double-counting).


6.	The required ALLL for each group of loans are added together to determine the total required ALLL for the Company. The required ALLL is compared to the ~~current~~existing ALLL to determine the provision required to increase the ALLL or credit to decrease the ALLL.

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced over the prior twelve months. Management believes the historical loss experience methodology is appropriate in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed.

The Company also factors in the following qualitative considerations:


1.	Changes in policies and procedures;


2.	Changes in national, regional, and local economic and business conditions;


3.	Changes in the composition and size of the portfolio and in the terms of loans;


4.	Changes in the experience, ability, and depth of lending management and other relevant staff;


5.	Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;


6.	Changes in the quality of the Company’s loan review system;


7.	Changes in the value of underlying collateral for collateral-dependent loans;


8.	The existence and effect of any concentration of credit and changes in the level of such concentrations; and


9.	The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the existing portfolio.

Provision for Loan Losses

A provision for estimated losses on loans is charged to ~~operations~~income based upon management’s evaluation of the potential losses. Such an evaluation, which includes a review of all loans for which full ~~collectibility~~repayment may not be reasonably assured, considers, among other matters, the estimated net realizable value of the underlying collateral, as applicable, economic conditions, loan loss experience, and other factors that are particularly susceptible to changes that could result in a material adjustment in the near term. While management ~~endeavors~~attempts to use the best information available in making its evaluations, future allowance adjustments may be necessary if economic conditions change substantially from the assumptions used in making the evaluations.

Accounting Standards Codification ~~(ASC)~~(“ASC”) Topic 310,Receivables, requires that impaired loans be measured based on the present value of expected future cash flows discounted at the ~~loans~~loans’ effective interest rates or the fair value of the underlying collateral, less costs to sell, and allows existing methods for recognizing interest income.

F-11

	~~F-10~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

Nonaccrual Loans

Any loan which becomes 90 days delinquent or ~~has~~for which the full collection of principal and interest may be in doubt will be considered for nonaccrual status. At the time a loan is placed on nonaccrual status, all accrued but unpaid interest will be reversed from interest income. Placing the loan on nonaccrual status does not relieve the borrower of the obligation to repay interest. A loan placed on nonaccrual status may be restored to accrual status when all delinquent principal and interest has been brought current, and the Company expects full payment of the remaining contractual principal and interest.

Impaired Loans

A loan is designated as impaired when, based on current information or events, it is probable that the Company will be unable to collect all amounts due (principal and interest) according to the contractual terms of the loan agreement. Payments with insignificant delays not exceeding 90 days outstanding are generally not considered impaired. Certain nonaccrual and substantially all delinquent loans may be considered to be impaired. Generally, loans are placed on nonaccrual status at 90 days past due and accrued interest is reversed against earnings, unless the loan is well-secured and in the process of collection. The accrual of interest on impaired ~~and nonaccrual~~ loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due.

Troubled Debt Restructurings ~~(TDR)~~(“TDR”)

The loan portfolio includes certain loans that have been modified in a TDR, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from loss mitigation efforts and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally not less than six months.

When loans are modified in a TDR, any possible impairment similar to other impaired loans is evaluated based on either the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or ~~use~~ the current fair value of the collateral, less selling costs for collateral dependent loans. If it is determined that the value of the modified loan is less than the recorded balance of the loan, impairment is recognized through a specific ~~allowance~~ALLL or charge-off to the ~~allowance.~~ALLL. In periods subsequent to modification, all TDRs, including those that have payment defaults, are evaluated for possible impairment, and impairment is recognized through the ~~allowance.~~ALLL.

Policy for Charging Off Loans

A loan should be charged off at any point in time when it no longer can be considered a bankable asset, meaning ~~collectable~~collected within the parameters of policy. A secured loan generally should be charged off to the estimated fair value of the collateral, less costs to sell, no later than when it is 120 days past due as to principal or interest. An unsecured loan generally should be charged off no later than when it is 180 days past due as to principal or interest. All charge-offs are approved by the Chief Credit ~~Review Committee.~~Officer.

Federal Home Loan Bank ~~(FHLB)~~(“FHLB”) of Indianapolis Stock

Federal law requires a member institution of the FHLB system to hold common stock of its district FHLB according to a predetermined formula. This investment is stated at cost, which represents redemption value, and may be pledged as collateral for FHLB advances.

F-12

	~~F-11~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

Other Real Estate Owned

Other real estate owned represents real estate acquired through foreclosure or deed in lieu of foreclosure and is recorded at its fair value less estimated costs to sell. When property is acquired, it is recorded at its fair value at the date of acquisition with any resulting write-down charged against the ~~allowance for loan losses.~~ALLL. Any subsequent deterioration of the property is charged directly to operating expense. Costs relating to the development and improvement of real estate owned are capitalized, whereas costs relating to holding and maintaining the property are charged to expense as incurred. ~~The Company has $4,381~~ ~~and $3,666~~ ~~of other real estate owned as of December 31, 2013 and 2012, respectively.~~

Premises and Equipment

Premises and equipment is stated at cost, less accumulated depreciation. Depreciation is computed on the straight-line method over the estimated useful lives, which range from three to five years for software and equipment,39 years for buildings, and ten years for land improvements.

Derivative Financial Instruments

The Company uses derivative financial instruments to help manage exposure to interest rate risk and the effects that changes in interest rates may have on net income and the fair value of assets and liabilities. The Company enters into forward contracts for the future delivery of mortgage loans to third party investors and enters into interest rate lock commitments with potential borrowers to fund specific mortgage loans that will be sold into the secondary market. The forward contracts are entered into in order to economically hedge the effect of changes in interest rates resulting from the Company’s commitment to fund the loans.

~~Each~~All of these items are considered derivatives, but are not designated as accounting hedges, and therefore, are recorded at fair value with changes in fair value reflected in noninterest income on the consolidated statements of income. The fair value of derivative instruments with a positive fair value are reported in accrued income and other assets in the consolidated balance sheets while derivative instruments with a negative fair value are reported in accrued expenses and other liabilities in the consolidated balance sheets.

Fair Value Measurements

The Company records or discloses certain assets and liabilities at fair value. ASC Topic 820,Fair Value ~~Measurement~~Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified within one of three levels in a valuation hierarchy. ASC Topic 820 describes three levels of inputs that may be used to measure fair value:


Level 1	Quoted prices in active markets for identical assets or liabilities


Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities


Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Income Taxes

Deferred income tax assets and liabilities reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws and regulations. Deferred income tax expense or benefit is based upon the change in deferred tax assets and liabilities from period to period, subject to an ongoing assessment of realization of deferred tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company files income tax returns in the U.S. federal, Indiana, and ~~Indiana~~other state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years before ~~2009.~~2010.

F-13

	~~F-12~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

ASC Topic ~~740,~~740-10, Accounting for Uncertainty in Income Taxes, prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company did not identify any uncertain tax positions that it believes should be recognized in the consolidated financial statements.

Earnings Per Share

Earnings per share of common stock ~~are~~is based on the weighted-average number of basic shares and dilutive shares outstanding during the year.

The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations.


	Year Ended December 31,				Year Ended December 31,
	2013		2012		2014		2013
Basic earnings per share
Net income available to common shareholders	$	4,593	$	5,606	$	4,324	$	4,593
Weighted-average common shares		3,041,666		2,869,365	4,497,007		3,041,666
Basic earnings per common share	$	1.51	$	1.95	$	0.96	$	1.51

Diluted earnings per share
Net income applicable to diluted earnings per share	$	4,593	$	5,606	$	4,324	$	4,593
Weighted-average common shares		3,041,666		2,869,365	4,497,007		3,041,666
Dilutive effect of warrants		5,933		—	2,895		5,933
Dilutive effect of equity compensation		2,402		—	8,093		2,402
Weighted-average common and incremental shares		3,050,001		2,869,365	4,507,995		3,050,001
Diluted earnings per common share	$	1.51	$	1.95	$	0.96	$	1.51
Number of shares and warrants excluded from the calculation of diluted earnings per share as the exercise prices were greater than the average market price of the Company's common stock during the year		—		—
Number of warrants excluded from the calculation of diluted earnings per share as the exercise prices were greater than the average market price of the Company’s common stock during the year					—		—

Dividend Restrictions

Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Company or by the Company to shareholders. As of December 31, ~~2013 and 2012~~2014, approximately $~~14,691~~ ~~and $14,737~~$16,686 was available to be paid as dividends to the Company by the ~~Bank.~~Bank without prior approval.

Stock Compensation

The Company has a stock-based ~~employee~~ compensation plan using the fair value recognition provisions of ASC Topic 718,Compensation - Stock Compensation. The plan is described more fully in Note 9.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale, which are also recognized as separate components of equity. Accumulated other comprehensive income (loss) at December 31, ~~2013~~2014 and ~~2012~~2013 is solely related to unrealized gains and losses on ~~investment~~available for sale securities.

F-14

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

Reclassification adjustments have been determined for all components of other comprehensive income or loss reported in the consolidated statements of changes in shareholders’ equity.

	~~F-13~~

~~First Internet Bancorp~~

~~Notes to Consolidated Financial Statements~~

~~(Dollar amounts in thousands except per share data)~~

Statements of Cash Flows

Cash and cash equivalents are defined to include cash on-hand, noninterest and interest-bearing amounts due from other banks and federal funds sold. Generally, federal funds are sold for one-day periods. The Company reports net cash flows for customer loan transactions and deposit transactions.

Bank-Owned Life Insurance

Bank-owned life insurance policies are carried at their cash surrender value. The Company recognizes tax-free income from the periodic increases in the cash surrender value of these policies and from death benefits.

Goodwill

Goodwill is tested at least annually for impairment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the consolidated financial statements.

Reclassifications

Certain reclassifications have been made to the ~~2012~~2013 financial statements to conform to the ~~2013~~2014 financial statement presentation. These reclassifications had no effect on net income.

Note 2: Cash and Cash Equivalents

~~Note 2:~~

~~Cash and Cash Equivalents~~

At December 31, ~~2013,~~2014, the Company’s interest-bearing cash accountsat other institutionsdid not exceed the limits for full FDIC insurance coverage. However, approximately $~~7,064~~$2,755 and $~~44,046~~$23,592 of cash is held by the FHLB of Indianapolis and Federal Reserve Bank of Chicago, respectively, which are not federally insured.

The Company is required to maintain reserve funds in cash and/or on deposit with the Federal Reserve Bank. The reserve required at December 31, ~~2013~~2014 was $$295.

Note 3: Securities

~~267~~Securities at .December 31, 2014 and 2013 are as follows:

	~~F-14~~



	2014
	Amortized		Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Securities available for sale
U.S. Government-sponsored agencies	$	13,680	$	129	$	(257	)	$	13,552
Mortgage-backed securities	117,134		282		(368		)	117,048
Asset-backed securities	4,913		—		(1		)	4,912
Other securities	2,000		6		—			2,006
Total available for sale	$	137,727	$	417	$	(626	)	$	137,518

F-15

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

~~Note 3:~~

~~Securities~~

~~Securities at December 31, 2013 and 2012 are as follows:~~



	2013
	Amortized		Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Securities available for sale
U.S. Government-sponsored agencies	$	57,569	$	470	$	(1,762	)	$	56,277
Municipals	46,126		1,080		(883		)	46,323
Mortgage-backed securities	76,371		705		(1,903		)	75,173
Other securities	5,025		—		(1,389		)	3,636
Total available for sale	$	185,091	$	2,255	$	(5,937	)	$	181,409

2013
Amortized Gross Unrealized Fair
Cost Gains Losses Value
Securities available for sale
U.S. Government-sponsored enterprises $ 57,569 $ 470 $ (1,762) $ 56,277
Municipals 46,126 1,080 (883) 46,323
Mortgage-backed and asset-backed securities –
government-sponsored enterprises 75,058 696 (1,813) 73,941
Mortgage-backed and asset-backed securities –
private labeled 1,313 9 (90) 1,232
Other securities 5,025 — (1,389) 3,636
Total available for sale $ 185,091 $ 2,255 $ (5,937) $ 181,409

2012
Amortized Gross Unrealized Fair
Cost Gains Losses Value
Securities available for sale
U.S. Government-sponsored enterprises $ 18,666 $ 953 $ (1) $ 19,618
Municipals 39,999 2,685 (144) 42,540
Mortgage-backed and asset-backed securities –
government-sponsored enterprises 75,782 1,884 (177) 77,489
Mortgage-backed and asset-backed securities –
private labeled 2,696 17 (260) 2,453
Other securities 16,753 105 (2,265) 14,593
Total available for sale $ 153,896 $ 5,644 $ (2,847) $ 156,693

The carrying value of securities at December 31, ~~2013~~2014 is shown below by their contractual maturity date. Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Available for Sale
Amortized Fair
Cost Value
Within one year $ 2,000 $ 1,962
One to five years 24,688 24,344
Five to ten years 17,404 17,381
After ten years 64,628 62,549
108,720 106,236
Mortgage-backed and asset-backed securities – government-sponsored enterprises 75,058 73,941
Mortgage-backed and asset-backed securities – private labeled 1,313 1,232
Totals $ 185,091 $ 181,409

	~~F-15~~

~~First Internet Bancorp~~

~~Notes to Consolidated Financial Statements~~

~~(Dollar amounts in thousands except per share data)~~



	Available for Sale
	Amortized Cost		Fair Value
Within one year	$	—	$	—
One to five years	—		—
Five to ten years	811		801
After ten years	12,869		12,751
	13,680		13,552
Mortgage-backed securities	117,134		117,048
Asset-backed securities	4,913		4,912
Other securities	2,000		2,006
Totals	$	137,727	$	137,518

Gross gains of $~~461~~$2,749 and $56,$461, and gross losses of $~~524~~$2,211 and $8$524 resulting from sales of ~~available-for-sale~~available for sale securities were realized for ~~2013~~2014 and ~~2012,~~2013, respectively.

As of December 31, 2014, the fair value of available for sale investment securities pledged as collateral was $130,600. The Company pledged the securities for various types of transactions, including FHLB advances and derivative financial instruments.

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. Total fair value of these investments at December 31, ~~2013~~2014 and ~~2012~~2013 was $~~109,946~~$86,873 and $~~41,986~~,$109,946, which is approximately61% 63% and27% 61%, respectively, of the Company’s ~~available-for-sale~~available for sale securities portfolio. These declines primarily resulted from fluctuations in market interest rates after purchase.

Except as discussed below, management believes the declines in fair value for these securities are temporary.

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced ~~and~~with the resulting loss recognized in net income in the period the other-than-temporary impairment (“OTTI”) is identified.

F-16

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

The following tables show the Company’s ~~investments’~~ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, ~~2013~~2014 and ~~2012:~~2013:

2013
Less Than 12 Months 12 Months or Longer Total
Fair Unrealized Fair Unrealized Fair Unrealized
Value Losses Value Losses Value Losses
Securities available for sale:
U.S. Government-sponsored enterprises $ 43,085 $ (1,761) $ 14 $ (1) $ 43,099 $ (1,762)
Municipals 14,105 (882) 351 (1) 14,456 (883)
Mortgage-backed and asset-backed securities -
government-sponsored enterprises 47,875 (1,813) — — 47,875 (1,813)
Mortgage-backed and asset-backed securities –
private labeled 43 (1) 838 (89) 881 (90)
Other securities 1,962 (38) 1,673 (1,351) 3,635 (1,389)
$ 107,070 $ (4,495) $ 2,876 $ (1,442) $ 109,946 $ (5,937)



	2014
	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Securities available for sale
U.S. Government-sponsored agencies	$	801	$	(10	)	$	8,719	$	(247	)	$	9,520	$	(257	)
Mortgage-backed securities	51,204		(57		)	21,237		(311		)	72,441		(368		)
Asset-backed securities	4,912		(1		)	—		—			4,912		(1		)
	$	56,917	$	(68	)	$	29,956	$	(558	)	$	86,873	$	(626	)

2012
Less Than 12 Months 12 Months or Longer Total
Fair Unrealized Fair Unrealized Fair Unrealized
Value Losses Value Losses Value Losses
Securities available for sale:
U.S. Government-sponsored enterprises $ — $ — $ 119 $ (1) $ 119 $ (1)
Municipals 470 (4) 2,618 (140) 3,088 (144)
Mortgage-backed and asset-backed securities -
government-sponsored enterprises 28,505 (177) — — 28,505 (177)
Mortgage-backed and asset-backed securities –
private labeled — — 1,504 (260) 1,504 (260)
Other securities 5,947 (53) 2,823 (2,212) 8,770 (2,265)
$ 34,922 $ (234) $ 7,064 $ (2,613) $ 41,986 $ (2,847)



	2013
	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Securities available for sale
U.S. Government-sponsored agencies	$	43,085	$	(1,761	)	$	14	$	(1	)	$	43,099	$	(1,762	)
Municipals	14,105		(882		)	351		(1		)	14,456		(883		)
Mortgage-backed securities	47,918		(1,814		)	838		(89		)	48,756		(1,903		)
Other securities	1,962		(38		)	1,673		(1,351		)	3,635		(1,389		)
	$	107,070	$	(4,495	)	$	2,876	$	(1,442	)	$	109,946	$	(5,937	)

	~~F-16~~

~~First Internet Bancorp~~

~~Notes to Consolidated Financial Statements~~

~~(Dollar amounts in thousands except per share data)~~

U.S. ~~Government Sponsored Enterprise~~Government-Sponsored Agencies and Municipal Securities

The unrealized losses on the Company’s investments in securities issued by U.S. ~~Government sponsored enterprises~~Government-sponsored agencies and municipal securities were caused by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. The Company expects to recover the amortized cost bases over the term of the securities. Because the Company does not intend to sell the investments ~~at a loss~~ and it is not ~~more~~ likely ~~than not~~that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be ~~other than temporarily~~other-than-temporarily impaired at December 31, ~~2013.~~2014.

Mortgage-Backed Securities

The unrealized losses on the Company’s ~~investment~~investments in mortgage-backed securities were caused by interest rate changes. The Company expects to recover the amortized cost ~~basis~~bases over the term of the securities. Because ~~the decline in market value is attributable to changes in interest rates and not credit quality, and because~~ the Company does not intend to sell the investments ~~at a loss~~ and it is not ~~more~~ likely ~~than not~~that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be ~~other than temporarily~~other-than-temporarily impaired at December 31, ~~2013.~~2014.

For identified mortgage-backed securities in the investment portfolio, an extensive, quarterly review is conducted to determine if an other-than-temporary impairment has occurred. Various inputs to the economic models are used to determine if an unrealized loss is ~~other than temporary.~~other-than-temporary. The most significant inputs are voluntary ~~prepay~~prepayment rates, default rates, liquidation rates, and loss severity.

To determine if the unrealized loss for mortgage-backed securities is ~~other than temporary,~~other-than-temporary, the Company projects total estimated defaults of the underlying assets (mortgages) and multiplies that calculated amount by an estimate of realizable

F-17

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

value upon sale in the marketplace (severity) in order to determine the projected collateral loss. The Company also evaluates the current credit enhancement underlying the ~~bond~~security to determine the impact on cash flows. If the Company determines that a given mortgage-backed security position will be subject to a write-down or loss, the Company records the expected credit loss as a charge to earnings.

Asset-Backed Securities

The unrealized losses on the Company’s investments in asset-backed securities were caused by interest rate changes. The Company expects to recover the amortized cost bases over the term of the securities. Because the Company does not intend to sell the securities and it is not likely that the Company will be required to sell the securities before recovery of their amortized cost bases, which may be maturity, the Company does not consider those securities to be other-than-temporarily impaired at December 31, 2014.

Other Securities

The Company’s unrealized loss on investments in other securities isat December 31, 2013 primarily ~~made up~~consisted of two ~~investments.~~investments, both of which were sold in the second quarter of 2014.

The first investment iswas a $2,000 par investment in I-PreTSL I B-2 pooled trust security. The unrealized loss was primarily caused by a sector downgrade by several industry analysts. ~~The Company currently expects to recover the entire amortized cost basis of the investment.~~ The determination of no credit loss was calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. Because the Company does not intend to sell the investment and it is not more likely than not the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, it does not consider the remainder of the investment to be other than temporarily impaired at December 31, 2013.

The second investment iswas a $2,000 par investment in ALESCO IV Series B2 pooled trust security onfor which the Company had recognized an ~~other than temporary~~other-than-temporary impairment loss. The unrealized loss was primarily caused byby: (a) a decrease in ~~performance~~performance; and (b) a sector downgrade by several industry analysts. The Company currently expects this security to settle at a price less than the contractual amount of the investment (that is, the Company expects to recover less than the entire amortized cost basis of the security). The Company has recognized a loss equal to the credit loss, establishing a new, lower amortized cost basis. The credit loss was calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. Because the Company does not intend to sell the investment and it is unlikely the Company will be required to sell the investment before recovery of its new, lower amortized cost basis, which may be maturity, it does not consider the remainder of the investment in ALESCO IV to be other-than-temporarily impaired at December 31, 2013.

	~~F-17~~

~~First Internet Bancorp~~

~~Notes to Consolidated Financial Statements~~

~~(Dollar amounts in thousands except per share data)~~

The credit losses recognized in earnings during the years ended December 31, ~~2013~~2014 and ~~2012~~2013 were as follows:

2013 2012
ALESCO IV Series B2 $ — $ 112
Mortgage-backed and asset-backed securities – private labeled 49 140
$ 49 $ 252



	2014		2013
Mortgage-backed and asset-backed securities – private labeled	$	—	$	49
Total credit losses recognized in earnings	$	—	$	49

Credit Losses Recognized on Investments

Certain debt securities have experienced fair value deterioration due to credit losses, as well as due to other market factors, but are not otherwise other than temporarily impaired.

F-18

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

The following table provides information about debt securities for which only a credit loss was recognized in income and other losses are recorded in other comprehensive ~~income (loss).~~loss.

Accumulated
Credit Losses
Credit losses on debt securities held
January 1, 2012 $ 1,835
Realized losses related to OTTI (350)
Additions related to OTTI losses not previously recognized 68
Additions related to increases in previously recognized OTTI losses 184
December 31, 2012 1,737
Realized losses related to OTTI (603)
Additions related to OTTI losses not previously recognized 31
Additions related to increases in previously recognized OTTI losses 18
December 31, 2013 $ 1,183



	Accumulated Credit Losses
Credit losses on debt securities held
January 1, 2013	$	1,737
Realized losses related to OTTI	(603		)
Additions related to OTTI losses not previously recognized	31
Additions related to increases in previously recognized OTTI losses	18
December 31, 2013	1,183
Realized losses related to OTTI	(1,139		)
Recoveries related to OTTI	(44		)
December 31, 2014	$	—

Amounts reclassified from accumulated other comprehensive ~~income (loss)~~loss and the affected line items in the consolidated statements of income during the years ended December 31, ~~2013~~2014 and ~~2012,~~2013, were as follows:

Amounts Reclassified from
Accumulated Other Comprehensive
Income (Loss)
for the Year Ended
December 31, Affected Line Item in the
2013 2012 Statements of Income
Securities available for sale
Gain (loss) realized in earnings $ (63) $ 48 Gain (loss) on sale of securities
OTTI losses recognized in earnings (49) (252) Other-than-temporary impairment
   loss recognized in net income
Total reclassified amount before tax (112) (204) Income Before Income Taxes
Tax benefit 38 69 Income Tax Provision
Total reclassifications out of
    accumulated other comprehensive
    income (loss) $ (74) $ (135) Net Income



Details About Accumulated Other Comprehensive Income Components	Amounts Reclassified from Accumulated Other Comprehensive Loss for the Year Ended December 31,					Affected Line Item in the Statements of Income
	2014		2013			Affected Line Item in the Statements of Income
Unrealized gains and losses on securities available for sale
Gain (loss) realized in earnings	$	538	$	(63	)	Gain (loss) on sale of securities
OTTI losses recognized in earnings	—		(49		)	Other-than-temporary impairment loss recognized in net income
Total reclassified amount before tax	538		(112		)	Income Before Income Taxes
Tax expense (benefit)	191		(38		)	Income Tax Provision
Total reclassifications out of accumulated other comprehensive loss	$	347	$	(74	)	Net Income

	~~F-18~~

F-19

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

~~Note 4:~~

Note 4: Loans Receivable

~~Loans Receivable~~

Categories of loans ~~at December 31,~~ include:


	December 31,				December 31,
	2013		2012		2014			2013
Real estate loans
Residential	$	191,007	$	128,815	$	279,046		$	191,007
Commercial		142,429		84,918	273,855			142,429
Total real estate loans		333,436		213,733	552,901			333,436
Commercial loans		55,168		14,271	77,232			55,168
Consumer loans		107,562		126,486	97,094			107,562
Total loans		496,166		354,490	727,227			496,166
Deferred loan origination costs and premiums and discounts on purchased loans		4,987		3,671	5,199			4,987
Allowance for loan losses		(5,426)		(5,833)	(5,800		)	(5,426		)
Total net loans	$	495,727	$	352,328
Net loans receivable					$	726,626		$	495,727

The risk characteristics of each loan portfolio segment are summarized as follows:

Commercial Real Estate: These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. These loans may also incorporate a personal guarantee. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of property type and geographic location. Management monitors and evaluates commercial real estate loans based on property financial performance, collateral value, and other risk grade criteria. As a general rule, the Company avoids financing special use projects or properties outside of its designated market areas unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate loans versus ~~nonowner-occupied~~non-owner-occupied loans.

Commercial: Commercial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Loans are made for working capital, equipment purchases, or other purposes. Most commercial loans are secured by the assets being financed and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis.

Residential Real Estate and Consumer: With respect to residential loans that are secured by 1-4 family residences and are generally owner occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family ~~residences, and consumer~~residences. The properties securing the Company’s residential loan portfolio are generally geographically diverse as the Company offers these loans on a nationwide basis. Repayment on residential loans can be impacted by changes in property values on residential properties. Consumer loans are secured by consumer assets such as ~~automobiles,~~ horse trailers, recreational vehicles, or ~~recreational vehicles.~~automobiles. Some consumer loans are unsecured, such as small installment loans and certain lines of credit. Repayment of ~~these~~consumer loans is primarily dependent upon the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. ~~Repayment can also be impacted by changes in property values on residential properties.~~ Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of ~~borrowers.~~borrowers in geographically diverse locations throughout the country.

	~~F-19~~

~~First Internet Bancorp~~

~~Notes to Consolidated Financial Statements~~

~~(Dollar amounts in thousands except per share data)~~

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, ~~2013~~2014 and ~~2012:~~2013:

2013
Residential Commercial
Real Estate Real Estate Commercial Consumer Total
Allowance for loan losses:
Balance, beginning of year $ 1,149 $ 3,107 $ 371 $ 1,206 $ 5,833
Provision charged to expense 136 (352) 378 162 324
Losses charged off (164) (238) — (810) (1,212)
Recoveries 98 — 70 313 481
Balance, end of year $ 1,219 $ 2,517 $ 819 $ 871 $ 5,426
Ending balance: individually evaluated for impairment $ 116 $ 98 $ — $ 28 $ 242
Ending balance: collectively evaluated for impairment $ 1,103 $ 2,419 $ 819 $ 843 $ 5,184

Loans:
Ending balance $ 191,007 $ 142,429 $ 55,168 $ 107,562 $ 496,166
Ending balance: individually evaluated for impairment $ 1,684 $ 1,054 $ — $ 339 $ 3,077
Ending balance: collectively evaluated for impairment $ 189,323 $ 141,375 $ 55,168 $ 107,223 $ 493,089

F-20

First Internet Bancorp

Notes to Consolidated Financial Statements

2012
Residential Commercial
Real Estate Real Estate Commercial Consumer Total
Allowance for loan losses:
Balance, beginning of year $ 1,099 $ 2,485 $ 333 $ 1,739 $ 5,656
Provision charged to expense 411 2,086 (37) 392 2,852
Losses charged off (509) (1,464) — (1,438) (3,411)
Recoveries 148 — 75 513 736
Balance, end of year $ 1,149 $ 3,107 $ 371 $ 1,206 $ 5,833
Ending balance: individually evaluated for impairment $ 206 $ 682 $ — $ 54 $ 942
Ending balance: collectively evaluated for impairment $ 943 $ 2,425 $ 371 $ 1,152 $ 4,891

Loans:
Ending balance $ 128,815 $ 84,918 $ 14,271 $ 126,486 $ 354,490
Ending balance: individually evaluated for impairment $ 2,482 $ 2,467 $ — $ 474 $ 5,423
Ending balance: collectively evaluated for impairment $ 126,333 $ 82,451 $ 14,271 $ 126,012 $ 349,067
(Dollar amounts in thousands except per share data)



	2014
	Residential Real Estate			Commercial Real Estate		Commercial			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	1,219		$	2,517	$	819		$	871		$	5,426
Provision charged to expense	182			20		115			32			349
Losses charged off	(247		)	—		(14		)	(596		)	(857		)
Recoveries	38			460		—			384			882
Balance, end of year	$	1,192		$	2,997	$	920		$	691		$	5,800
Ending balance: individually evaluated for impairment	$	—		$	—	$	—		$	15		$	15
Ending balance: collectively evaluated for impairment	$	1,192		$	2,997	$	920		$	676		$	5,785

Loans:
Ending balance	$	279,046		$	273,855	$	77,232		$	97,094		$	727,227
Ending balance: individually evaluated for impairment	$	1,139		$	87	$	—		$	305		$	1,531
Ending balance: collectively evaluated for impairment	$	277,907		$	273,768	$	77,232		$	96,789		$	725,696



	2013
	Residential Real Estate			Commercial Real Estate			Commercial		Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	1,149		$	3,107		$	371	$	1,206		$	5,833
Provision charged to expense	136			(352		)	378		162			324
Losses charged off	(164		)	(238		)	—		(810		)	(1,212		)
Recoveries	98			—			70		313			481
Balance, end of year	$	1,219		$	2,517		$	819	$	871		$	5,426
Ending balance: individually evaluated for impairment	$	116		$	98		$	—	$	28		$	242
Ending balance: collectively evaluated for impairment	$	1,103		$	2,419		$	819	$	843		$	5,184

Loans:
Ending balance	$	191,007		$	142,429		$	55,168	$	107,562		$	496,166
Ending balance: individually evaluated for impairment	$	1,684		$	1,054		$	—	$	339		$	3,077
Ending balance: collectively evaluated for impairment	$	189,323		$	141,375		$	55,168	$	107,223		$	493,089

The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans. Loans are graded on a scale of 1 to 8.9. A description of the general characteristics of the 8nine risk grades is as follows:

~~Grades 1 & 2~~“Pass” (Grades 1-5) - ~~These grades are assigned to~~Higher quality loans ~~with very high~~that do not fit any of the other categories described below.

“Special Mention” (Grade 6) - Loans that possess some credit ~~quality borrowers~~deficiency or potential weakness which deserve close attention.

“Substandard” (Grade 7) - Loans that possess a defined weakness or weaknesses that jeopardize the liquidation of ~~investment or near investment grade or where~~ the ~~loan is primarily secured~~debt. Loans characterized by cash or conservatively margined high quality marketable securities. These borrowers are generally publicly traded, have significant capital strength, possess investment grade public debt ratings, demonstrate low leverage, exhibit stable earnings and growth, and have ready access to various financing alternatives.the distinct possibility that the institution will sustain some loss if the

F-21

	~~F-20~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

~~Grades 3 & 4 -~~deficiencies are not corrected. Loans ~~assigned these grades include loans to borrowers possessing solid credit quality with acceptable risk. Borrowers in these grades~~that are ~~differentiated from higher grades on~~inadequately protected by the ~~basis of size (capital and/or revenue), leverage, asset quality, stability~~current net worth and paying capacity of the ~~industry~~obligor or ~~specific market area and quality/coverage~~ of ~~collateral. These borrowers generally have a history of consistent earnings and reasonable leverage.~~

the collateral pledged, if any.

~~Grade 5~~“Doubtful” (Grade 8) - This grade includes “pass grade” loans to borrowers which require special monitoring because of deteriorating financial results, declining credit ratings, decreasing cash flow, increasing leverage, marginal collateral coverage or industry stress that has resulted or may result in a changing overall risk profile.

Grade 6 - This grade is for “Special Mention” loans in accordance with regulatory guidelines. This grade is intended to include loans to borrowers whose credit quality has clearly deteriorated and where risk of further decline is possible unless active measures are taken to correct the situation. Weaknesses are considered potential at this state and are not yet fully defined.

Grade 7 - This grade includes “Substandard” loans in accordance with regulatory guidelines. Loans categorized in this grade possess a well-defined credit weakness, and the likelihood of repayment from the primary source is uncertain. Significant financial deterioration has occurred, and very close attention is warranted to ensure the full repayment without loss. Collateral coverage may be marginal, and the accrual of interest has been suspended.

~~Grade 8 - This grade includes “Doubtful” loans in accordance with regulatory guidelines.~~ Such loans have been placed on nonaccrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event which lacks clear certainty. These loans have all of the weaknesses of those classified as Substandard; however, based on existing conditions, these weaknesses make full collection of the principal balance highly improbable.

“Loss” (Grade 9) - Loans that are considered uncollectible and of such little value that continuing to carry them as assets is not warranted.

The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of December 31, ~~2013~~2014 and ~~2012:~~2013:

2013
Commercial
Real Estate Commercial
Rating:
1-5 Pass $ 139,052 $ 54,035
6 Special Mention 2,323 1,133
7 Substandard 1,054 —
8 Doubtful — —
Total $ 142,429 $ 55,168



	2014
	Commercial Real Estate		Commercial
Rating:
1-5 Pass	$	271,868	$	77,232
6 Special Mention	379		—
7 Substandard	1,608		—
8 Doubtful	—		—
Total	$	273,855	$	77,232

2013
Residential
Real Estate Consumer
Performing $ 190,377 $ 107,412
Nonaccrual 630 150
Total $ 191,007 $ 107,562



	2014
	Residential Real Estate		Consumer
Performing	$	279,021	$	96,971
Nonaccrual	25		123
Total	$	279,046	$	97,094

	~~F-21~~



	2013
	Commercial Real Estate		Commercial
Rating:
1-5 Pass	$	139,052	$	54,035
6 Special Mention	2,323		1,133
7 Substandard	1,054		—
8 Doubtful	—		—
Total	$	142,429	$	55,168



	2013
	Residential Real Estate		Consumer
Performing	$	190,377	$	107,412
Nonaccrual	630		150
Total	$	191,007	$	107,562

F-22

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

2012
Commercial
Real Estate Commercial
Rating:
1-5 Pass $ 80,830 $ 13,860
6 Special Mention 1,621 411
7 Substandard 2,467 —
8 Doubtful — —
Total $ 84,918 $ 14,271

2012
Residential
Real Estate Consumer
Performing $ 127,426 $ 126,331
Nonaccrual 1,389 155
Total $ 128,815 $ 126,486

The following tables present the Company’s loan portfolio aging analysis as of December 31, ~~2013~~2014 and ~~2012:~~2013:

2013
Total Loans
90 Days or
30-59 60-89 90 Days Total More Past
Days Days or More Total Loans Nonaccrual Due
Past Due Past Due Past Due Past Due Current Receivable Loans and Accruing
Residential real estate $ 122 $ — $ 603 $ 725 $ 190,282 $ 191,007 $ 630 $ —
Commercial real estate — — 955 955 141,474 142,429 1,054 —
Commercial — — — — 55,168 55,168 — —
Consumer 484 45 84 613 106,949 107,562 150 18
Total $ 606 $ 45 $ 1,642 $ 2,293 $ 493,873 $ 496,166 $ 1,834 $ 18



	2014
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Nonaccrual Loans		Total Loans 90 Days or More Past Due and Accruing
Residential real estate	$	161	$	—	$	57	$	218	$	278,828	$	279,046	$	25	$	57
Commercial real estate	—		—		—		—		273,855		273,855		87		—
Commercial	—		—		—		—		77,232		77,232		—		—
Consumer	249		56		53		358		96,736		97,094		123		4
Total	$	410	$	56	$	110	$	576	$	726,651	$	727,227	$	235	$	61

2012
Total Loans
90 Days or
30-59 60-89 90 Days Total More Past
Days Days or More Total Loans Nonaccrual Due
Past Due Past Due Past Due Past Due Current Receivable Loans and Accruing
Residential real estate $ 130 $ 5 $ 1,555 $ 1,690 $ 127,125 $ 128,815 $ 1,389 $ 450
Commercial real estate — — 2,362 2,362 82,556 84,918 2,362 —
Commercial — — — — 14,271 14,271 — —
Consumer 1,025 148 122 1,295 125,191 126,486 155 21
Total $ 1,155 $ 153 $ 4,039 $ 5,347 $ 349,143 $ 354,490 $ 3,906 $ 471



	2013
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Nonaccrual Loans		Total Loans 90 Days or More Past Due and Accruing
Residential real estate	$	122	$	—	$	603	$	725	$	190,282	$	191,007	$	630	$	—
Commercial real estate	—		—		955		955		141,474		142,429		1,054		—
Commercial	—		—		—		—		55,168		55,168		—		—
Consumer	484		45		84		613		106,949		107,562		150		18
Total	$	606	$	45	$	1,642	$	2,293	$	493,873	$	496,166	$	1,834	$	18

A loan is considered impaired, in accordance with the impairment accounting guidance in ASC Topic 310,Receivables, when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.

	~~F-22~~

F-23

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

The following tables present the Company’s impaired loans as of December 31, ~~2013~~2014 and ~~2012:~~2013:

2013
Unpaid
Recorded Principal Specific Average Interest
Balance Balance Allowance Balance Income
Loans without a specific valuation
allowance
Residential real estate loans $ 1,551 $ 1,842 $ — $ 1,894 $ 29
Commercial real estate loans 956 2,310 — 239 —
Commercial loans — — — — —
Consumer loans 271 326 — 315 28
Total $ 2,778 $ 4,478 $ — $ 2,448 $ 57
Loans with a specific valuation
allowance
Residential real estate loans $ 133 $ 141 $ 116 $ 66 $ 3
Commercial real estate loans 98 98 98 1,617 5
Commercial loans — — — — —
Consumer loans 68 80 28 78 2
Total $ 299 $ 319 $ 242 $ 1,761 $ 10
Total impaired loans
Residential real estate loans $ 1,684 $ 1,983 $ 116 $ 1,960 $ 32
Commercial real estate loans 1,054 2,408 98 1,856 5
Commercial loans — — — — —
Consumer loans 339 406 28 393 30
Total $ 3,077 $ 4,797 $ 242 $ 4,209 $ 67



	2014
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance		Interest Income
Loans without a specific valuation allowance
Residential real estate loans	$	1,139	$	1,146	$	—	$	1,266	$	32
Commercial real estate loans	87		87		—		666		5
Commercial loans	—		—		—		—		—
Consumer loans	268		338		—		380		37
Total	$	1,494	$	1,571	$	—	$	2,312	$	74
Loans with a specific valuation allowance
Residential real estate loans	$	—	$	—	$	—	$	—	$	—
Commercial real estate loans	—		—		—		—		—
Commercial loans	—		—		—		—		—
Consumer loans	37		51		15		40		4
Total	$	37	$	51	$	15	$	40	$	4
Total impaired loans
Residential real estate loans	$	1,139	$	1,146	$	—	$	1,266	$	32
Commercial real estate loans	87		87		—		666		5
Commercial loans	—		—		—		—		—
Consumer loans	305		389		15		420		41
Total	$	1,531	$	1,622	$	15	$	2,352	$	78

F-24

	~~F-23~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

	2012
			Unpaid
	Recorded		Principal		Specific		Average		Interest		2013
	Balance		Balance		Allowance		Balance		Income		Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Balance		Interest Income
Loans without a specific valuation allowance
Residential real estate loans	$	2,047	$	2,357	$	—	$	1,685	$	29	$	1,551	$	1,842	$	—	$	1,894	$	29
Commercial real estate loans		—		—		—		275		—	956		2,310		—		239		—
Commercial loans		—		—		—		—		—	—		—		—		—		—
Consumer loans		380		577		—		385		—	271		326		—		315		28
Total	$	2,427	$	2,934	$	—	$	2,345	$	29	$	2,778	$	4,478	$	—	$	2,448	$	57
Loans with a specific valuation allowance
Residential real estate loans	$	435	$	442	$	206	$	514	$	—	$	133	$	141	$	116	$	66	$	3
Commercial real estate loans		2,467		2,925		682		6,089		6	98		98		98		1,617		5
Commercial loans		—		—		—		—		—	—		—		—		—		—
Consumer loans		94		206		54		93		—	68		80		28		78		2
Total	$	2,996	$	3,573	$	942	$	6,696	$	6	$	299	$	319	$	242	$	1,761	$	10
Total impaired loans
Residential real estate loans	$	2,482	$	2,799	$	206	$	2,199	$	29	$	1,684	$	1,983	$	116	$	1,960	$	32
Commercial real estate loans		2,467		2,925		682		6,364		6	1,054		2,408		98		1,856		5
Commercial loans		—		—		—		—		—	—		—		—		—		—
Consumer loans		474		783		54		478		—	339		406		28		393		30
Total	$	5,423	$	6,507	$	942	$	9,041	$	35	$	3,077	$	4,797	$	242	$	4,209	$	67

In the course of working with troubled borrowers, the Company may choose to restructure the contractual terms of certain loans in an effort to work out an alternative payment schedule with the borrower in order to optimize the collectability of the loan. Any loan modified is reviewed by the Company to identify if a TDR has occurred, which is when the Company grants a concession to the borrower that it would not otherwise consider based on economic or legal reasons related to a borrower’s financial difficulties. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status or the loan may be restructured to secure additional collateral and/or guarantees to support the debt, or a combination of the two.

Loans classified as a TDR during the years ended December 31, ~~2013~~2014 and ~~2012~~2013 are shown in the tables below. ~~These modifications consisted primarily of interest rate and maturity date concessions.~~

2013
Modifications
Recorded Recorded
Number of Balance Balance
Contracts Before After
Residential real estate — $ — $ —
Commercial real estate — — —
Commercial — — —
Consumer 4 25 25
Total 4 $ 25 $ 25



	2014
	Modifications
	Number of Contracts	Recorded Balance Before		Recorded Balance After
Consumer	1	$	21	$	21
Total	1	$	21	$	21

F-25

	~~F-24~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

2012
Modifications
Recorded Recorded
Number of Balance Balance
Contracts Before After
Residential real estate 1 $ 29 $ 29
Commercial real estate — — —
Commercial — — —
Consumer 8 140 122
Total 9 $ 169 $ 151



	2013
	Modifications
	Number of Contracts	Recorded Balance Before		Recorded Balance After
Consumer	4	$	25	$	25
Total	4	$	25	$	25

There were ~~zero~~no TDR loans which had payment defaults during the ~~year~~years ended December 31, 2014 and 2013. ~~TDR loans which had payment defaults during the year ended December 31, 2012 are shown in the table below.~~ Default occurs when a loan is 90 days or more past due or transferred to nonaccrual status within 12 months of restructuring.

2012
Number
of Recorded
Defaults Balance
Residential real estate 1 $ 29
Commercial real estate — —
Commercial — —
Consumer 1 20
Total 2 $ 49

The following tables summarize loan modifications that occurred during the years ended December 31, ~~2013~~2014 and ~~2012:~~2013:

2013
Payment Extension Principal Reduction Rate Reduction
Number Amount Number Amount Number Amount
Residential real estate — $ — — $ — — $ —
Commercial real estate — — — — — —
Commercial — — — — — —
Consumer 2 2 — — 2 23
Total 2 $ 2 — $ — 2 $ 23



	2014
	Payment Extension			Rate Reduction
	Number	Amount		Number	Amount
Consumer	1	$	21	—	$	—
Total	1	$	21	—	$	—

2012
Payment Extension Principal Reduction Rate Reduction
Number Amount Number Amount Number Amount
Residential real estate 1 $ 29 — $ — — $ —
Commercial real estate — — — — — —
Commercial — — — — — —
Consumer 3 16 2 28 3 78
Total 4 $ 45 2 $ 28 3 $ 78



	2013
	Payment Extension			Rate Reduction
	Number	Amount		Number	Amount
Consumer	2	$	2	2	$	23
Total	2	$	2	2	$	23

~~Principal reductions were made based on orders from a bankruptcy court.~~ Payment extensions and rate reductions have ~~proven~~proved to be successful in optimizing the overall collectability of the ~~loan by increasing the period of time that the borrower is able to make required payments to the Company.~~loan.

	~~F-25~~

Note 5: Premises and Equipment

Premises and equipment at December 31, 2014 and 2013 consists of the following:



	December 31,
	2014			2013
Land	$	2,500		$	2,500
Building and improvements	3,018			2,858
Furniture and equipment	5,277			4,883
Less: accumulated depreciation	(3,734		)	(3,107		)
	$	7,061		$	7,134

F-26

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

~~Note 5:~~

~~Premises and Equipment~~

Note 6: Goodwill

~~Premises and equipment at December 31, 2013 and 2012 consists of the following:~~

December 31,
2013 2012
Land $ 2,500 $ —
Building and improvements 2,858 159
Furniture and equipment 4,883 3,362
Less: accumulated depreciation (3,107) (2,728)
$ 7,134 $ 793

~~In the first quarter of 2013, the Company acquired an office building with approximately52,000~~ ~~square feet of office space and related real estate located in Fishers, Indiana. The Company acquired the property for the current and future operations of the Bank for $4,083. The cost basis of the building is being depreciated on a straight-line basis over~~39 ~~years. The remaining increase is primarily related to investments in building and leasehold improvements at both the Fishers location and the Company’s corporate office.~~

~~Note 6:~~

~~Goodwill~~

The change in the carrying amount of goodwill for the two years ended December 31, ~~2013~~2014 was:

Balance as of January 1, 2012	$	4,687
Changes in goodwill during the year		—
Balance as of December 31, 2012		4,687

Balance as of January 1, 2013			$	4,687
Changes in goodwill during the year		—	—
Balance as of December 31, 2013	$	4,687	4,687
Changes in goodwill during the year			—
Balance as of December 31, 2014			$	4,687

Goodwill is tested for impairment on an annual basis as of August 31, or whenever events or changes in circumstances indicate the carrying amount of goodwill exceeds its implied fair value. No events or changes in circumstances have occurred since the August 31, ~~2013~~2014 annual impairment test that would suggest it was more likely than not goodwill impairment existed.

	~~F-26~~

Note 7: Deposits

~~First Internet Bancorp~~

~~Notes to Consolidated Financial Statements~~

~~(Dollar amounts in thousands except per share data)~~

~~Note 7:~~

~~Deposits~~

Deposits at December 31, ~~2013~~2014 and ~~2012~~2013 are as follows:

December 31,
2013 2012
Regular savings accounts $ 14,330 $ 11,583
Noninterest-bearing demand deposit accounts 19,386 13,187
Interest-bearing demand deposit accounts 73,748 73,660
Money market accounts 255,169 202,388
Total transaction accounts 362,633 300,818

Certificates of deposits 292,685 211,542
Brokered deposits 17,890 18,490
Premiums on brokered deposits (113) (159)

Total deposits $ 673,095 $ 530,691



	December 31,
	2014		2013
Regular savings accounts	$	20,776	$	14,330
Noninterest-bearing demand deposit accounts	21,790		19,386
Interest-bearing demand deposit accounts	74,238		73,748
Money market accounts	267,046		255,169
Certificates of deposits	361,202		292,685
Brokered deposits	13,546		17,777
Total deposits	$	758,598	$	673,095

Certificates of deposit in the amount of $100 or more totaled approximately $~~237,273~~$294,386 and $~~133,570~~$237,273 at December 31, ~~2013~~2014 and ~~2012,~~2013, respectively.

A summary of certificate accounts by scheduled maturities at December 31, ~~2013~~2014 is as follows:



2015	$	223,078
2016	108,238
2017	19,213
2018	14,776
2019	9,435
Thereafter	8
	$	374,748

2014 $ 141,810
2015 75,971
2016 65,186
2017 13,423
2018 14,185
Thereafter —
$ 310,575

F-27

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

Note 8: FHLB Advances

~~Note 8:~~

~~FHLB Advances~~

The Company has outstanding FHLB advances of $~~31,793~~$106,897 and $~~40,686~~$31,793 as of December 31, ~~2013~~2014 and ~~2012,~~2013, respectively. ~~Advances, at interest rates from~~As of ~~0.39% to4.57% at~~ December 31, ~~2013,~~2014, the Company has $67,000 of fixed rate advances outstanding. These fixed rate advances are subject to restrictions or penalties in the event of prepayment. The Company also has $40,000 of variable rate advances outstanding as of December 31, 2014. As of December 31, 2014, the interest rates on the Company’s outstanding FHLB advances ranged from 0.24% to 4.57%, with a weighted average interest rate of 1.58%. All advances are collateralized by mortgage loans pledged and held by the Company and investment securities pledged by the Company and held in safekeeping with the FHLB. Mortgage loans pledged were approximately $~~96,195~~$212,559 and $0$96,195 as of December 31, ~~2013~~2014 and ~~2012,~~2013, respectively, and the fair value of investment securities pledged to the FHLB was approximately $~~73,698~~$128,185 and $~~49,523~~$73,698 as of December 31, ~~2013~~2014 and ~~2012,~~2013, respectively.

	~~F-27~~

~~First Internet Bancorp~~

~~Notes to Consolidated Financial Statements~~

~~(Dollar amounts in thousands except per share data)~~

The Company’s FHLB advances are scheduled to mature according to the following schedule:

Amount
2014 $ 15,000
2015 11,000
2016 3,000
2017 —
Thereafter 3,000
32,000
Deferred prepayment penalties on advance restructure (207)
$ 31,793



	Amount
2015	$	101,000
2016	3,000
2017	—
2018	3,000
Thereafter	—
	107,000
Deferred prepayment penalties on advance restructure	(103		)
	$	106,897

~~Note 9:~~

Note 9: Benefit Plans

~~401(k) Plan~~

401(k) Plan

The Company has a 401(k) plan established for substantially all full-time employees, as defined. Employee contributions are limited to the maximum established by the Internal Revenue Service on an annual basis. The Company has elected to match contributions equal to 100% of the first 1% of employee deferrals and then 50% on deferrals over 1% up to a maximum of 6% of an individual’s total eligible salary, as defined by the plan. Employer-matching contributions begin vesting after one year at a rate of50% 50% per year of employment and are fully vested after the completion of two years of service. Contributions each year during the years ended December 31, ~~2013~~2014 and ~~2012,~~2013, totaled approximately $~~252~~$268 and $~~214~~,$252, respectively.

Employment ~~Agreements~~Agreement

The Company has entered into an employment ~~or change in control agreements~~agreement with ~~certain executives~~its Chief Executive Officer that ~~provide~~provides for the continuation of salary and certain benefits for a specified period of time under certain conditions. Under the terms of the ~~agreements,~~agreement, these payments could occur in the event of a change in control of the Company, as defined, along with other specific conditions.

2013 Equity Incentive Plan

The 2013 Equity Incentive Plan ~~(the “2013~~(“2013 Plan”) authorizes the issuance of750,000 shares of the ~~Company's~~Company’s common stock in the form of equity-based awards to employees, directors, and other eligible persons. The 2013 Plan replaced the 2006 Stock Option Plan, which had595,500 shares of common stock available for issuance when the 2013 Plan became effective. Under the terms of the 2013 Plan, the pool of shares available for issuance may be used for available types of equity awards under the 2013 Plan, which includes stock options, stock appreciation rights, restricted stock awards, stock unit awards, and other stock-based awards. All employees, consultants and advisors of the Company or any subsidiary, as well as all non-employee directors of the Company, are eligible to receive awards under the 2013 Plan.

~~The Company recorded $387~~ ~~of share-based compensation expense for the year ended December 31, 2013 related to awards made under the 2013 Plan. The Company recorded $~~0 ~~share-based compensation expense in the same period of 2012 for the 2006 Stock Option Plan.~~

F-28

	~~F-28~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

The Company recorded $507 and $387 of share-based compensation expense for the years ended December 31, 2014 and 2013, respectively, related to awards made under the 2013 Plan.

The following table summarizes the status of the ~~Company's~~Company’s restricted stock and deferred stock unit awards as of December 31, ~~2013,~~2014, and activity for the year ended December 31, ~~2013:~~2014:

		Weighted-
		Average Grant
	Restricted	Date Fair Value		Restricted Stock Awards		Weighted-Average Grant Date Fair Value Per Share		Deferred Stock Units		Weighted-Average Grant Date Fair Value Per Unit
	Stock Awards	Per Share
Nonvested at January 1, 2013	—	$	—
Nonvested at January 1, 2014				46,232		$	25.09	—		$	—
Granted	46,232		25.09	4,445		22.50		897		22.47
Vested	—		—	(19,856	)	24.51		(897	)	22.47
Forfeited	—		—	(10,044	)	25.09		—		—
Nonvested at December 31, 2013	46,232	$	25.09
Nonvested at December 31, 2014				20,777		$	25.09	—		$	—

As of December 31, ~~2013,~~2014, the total unrecognized compensation cost related to nonvested awards was $135~~773~~, with a weighted-average expense recognition period of~~2.00~~1.0 years.

Directors Deferred Stock Plan

Until January 1, 2014, the Company had a stock compensation plan for members of the Board of Directors (“Directors Deferred Stock Plan”). The Company reserved180,000 shares of common stock that could have been issued pursuant to the Directors Deferred Stock Plan. The plan provided directors the option to elect to receive up to~~100~~% 100% of their annual retainer in either common stock or deferred stock rights. Deferred stock rights were to be settled in common stock following the end of the deferral period payable on the basis of one share of common stock for each deferred stock right.

~~Director compensation totaled $205~~ ~~and $144~~ inFor the year ended December 31, 2013, ~~and 2012, respectively,~~the Company recorded $205 of ~~which $127~~ ~~and $~~95 ~~in 2013 and 2012, respectively, were paid in deferred stock rights. Awards were granted on January 1 at fair value and vested~~expense related to awards made from ~~January 1 until December 31.~~the Directors Deferred Stock Plan. The Company recognized compensation expense ratably over the vesting period based upon the fair value of the stock on the grant date. The Directors Deferred Stock Plan ended on December 31, 2013. On January 1, 2014, the Company issued tandem awards of shares of restricted stock and deferred stock units to each of its non-employee directors under the 2013 Plan. Each award had a grant date fair value of $20 and represents the non-cash component of the compensation payable for the directors’ service during 2014. The economic terms of the awards are substantially the same as the non-cash retainer compensation the non-employee directors received for 2013 in the form of director deferred stock rights.

The following is an analysis of deferred stock rights and common stock related to the Directors Deferred Stock Plan for the year ended December 31, ~~2013:~~2014:


		~~Deferred~~
		Deferred Rights
Outstanding, beginning of year		~~70,315~~79,676
Granted		~~9,361~~852
Exercised		—
Outstanding, end of year		~~79,676~~80,528

B~~eginning on January 1, 2014, tandem awards of shares of restricted stock and~~All deferred stock ~~units~~rights granted during 2014 were additional rights issued ~~under the 2013 Plan replaces the Directors Deferred Stock Plan~~.in lieu of cash dividends payable on outstanding deferred stock rights.

F-29

	~~F-29~~

First Internet Bancorp

Notes to Consolidated Financial Statements

(Dollar amounts in thousands except per share data)

Note 10: Income Taxes

~~Note 10:~~

~~Income Taxes~~

The provision (credit) for income taxes consists of the following:

2013 2012
Current $ (693) $ 2,385
Deferred 2,259 (191)
Total $ 1,566 $ 2,194



	2014			2013
Current	$	3,655		$	(693	)
Deferred	(1,529		)	2,259
Total	$	2,126		$	1,566

Income tax provision (credit) is reconciled to the34% 34% statutory rate applied to pre-tax income as follows:


	2013		2012		2014			2013
Statutory rate times pre-tax income	$	2,094	$	2,652	$	2,193		$	2,094
Add (subtract) the tax effect of:
Income from tax-exempt securities		(514)		(533)	(31		)	(514		)
State income tax, net of federal tax effect		33		36	63			33
Bank-owned life insurance		(135)		(129)	(132		)	(135		)
Other differences		88		168	33			88
Total income taxes	$	1,566	$	2,194	$	2,126		$	1,566



(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Fiscal Year Ended December 31, ~~2013~~2014
	or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Transition Period From ________ to ________.



Indiana		~~20-348991~~ 20-3489991
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

8888 Keystone Crossing, Suite 1700
Indianapolis,, Indiana		46240
(Address of principal executive offices)		(Zip Code)



Title of class		Name of exchange on which registered
Common stock, without par value		NASDAQ Capital Market



Large Accelerated Filer ¨	Accelerated Filer ¨þ

Non-accelerated Filer ¨ (Do not check if a smaller reporting company)	Smaller Reporting Company þ¨


(dollars in thousands)	December 31,																				December 31,
	2013				2012				2011				2010				2009				2014					2013					2012					2011					2010
Real estate loans:
Residential	$	191,007	38.50	%	$	128,815	36.34	%	$	143,452	43.24	%	$	106,729	35.30	%	$	80,781	26.02	%	$	279,046		38.4	%	$	191,007		38.5	%	$	128,815		36.3	%	$	143,452		43.3	%	$	106,729		35.3	%
Commercial		142,429	28.70	%		84,918	23.95	%		43,507	13.11	%		19,563	6.47	%		20,212	6.51	%	273,855			37.7	%	142,429			28.7	%	84,918			24.0	%	43,507			13.1	%	19,563			6.5	%
Total real estate loans		333,436	67.20	%		213,733	60.29	%		186,959	56.35	%		126,292	41.77	%		100,993	32.53	%	552,901			76.1	%	333,436			67.2	%	213,733			60.3	%	186,959			56.4	%	126,292			41.8	%
Commercial loans		55,168	11.12	%		14,271	4.03	%		2,063	0.62	%		4,919	1.63	%		3,779	1.22	%	77,232			10.6	%	55,168			11.1	%	14,271			4.0	%	2,063			0.6	%	4,919			1.6	%
Consumer loans		107,562	21.68	%		126,486	35.68	%		142,783	43.03	%		171,122	56.60	%		205,702	66.25	%	97,094			13.3	%	107,562			21.7	%	126,486			35.7	%	142,783			43.0	%	171,122			56.6	%
		496,166	100.00	%		354,490	100.00	%		331,805	100.00	%		302,333	100.00	%		310,474	100.00	%	727,227			100.0	%	496,166			100.0	%	354,490			100.0	%	331,805			100.0	%	302,333			100.0	%
Less:
Net deferred loan fees, premiums and discounts		4,987				3,671				3,421				4,057				5,062
Allowance for losses		(5,426)				(5,833)				(5,656)				(6,845)				(10,097)
Total net loans	$	495,727			$	352,328			$	329,570			$	299,545			$	305,439
Net deferred loan fees, costs, premiums and discounts																					5,199					4,987					3,671					3,421					4,057
Total loans receivable																					732,426					501,153					358,161					335,226					306,390
Allowance for loan losses																					(5,800		)			(5,426		)			(5,833		)			(5,656		)			(6,845		)
Net loans receivable																					$	726,626				$	495,727				$	352,328				$	329,570				$	299,545



	First Internet Bancorp
	(Exact Name of Registrant as Specified in its Charter)

(dollars in thousands)	Real Estate
	Residential		Commercial		Commercial		Consumer		Total
Amounts due in:
One year or less	$	8,011	$	12,086	$	8,620	$	2,017	$	30,734
More than one to two years		7,904		1,576		939		1,392	$	11,811
More than two to three years		2,158		11,952		6,163		4,659	$	24,932
More than three to five years		661		37,011		11,746		15,070	$	64,488
More than five to ten years		1,088		73,686		27,700		69,402	$	171,876
More than ten to fifteen years		4,675		5,397		—		15,022	$	25,094
More than fifteen years		166,510		721		—		—	$	167,231
Total	$	191,007	$	142,429	$	55,168	$	107,562	$	496,166


(dollars in thousands)	Due after December 31, 2013						Due after December 31, 2014
	Fixed		Adjustable		Total		Fixed		Adjustable		Total
Real estate loans:
Residential	$	16,070	$	174,937	$	191,007	$	30,599	$	248,447	$	279,046
Commercial		101,454		40,975	$	142,429	221,382		52,473		$	273,855
Total real estate loans		117,524		215,912	$	333,436	251,981		300,920		$	552,901
Commercial loans		43,499		11,669	$	55,168	55,725		21,507		$	77,232
Consumer loans		106,431		1,131	$	107,562	96,146		948		$	97,094
Total loans	$	267,454	$	228,712	$	496,166	$	403,852	$	323,375	$	727,227


(dollars in thousands)	Fiscal Year Ended December 31,															Twelve Months Ended December 31,
	2013			2012			2011			2010			2009			2014			2013			2012			2011			2011
Allowance at beginning of period:	$	5,833		$	5,656		$	6,845		$	10,097		$	4,616		$	5,426		$	5,833		$	5,656		$	6,845		$	10,097
Provision for loan losses		324			2,852			2,440			927			11,564		349			324			2,852			2,440			927
Charge offs:
Real estate loans:
Residential		(164)			(509)			(811)			(1,158)			(1,402)		247			164			509			811			1,158
Commercial		(238)			(1,464)			(698)			(445)			(294)		—			238			1,464			698			445
Commercial loans		—			—			(612)			(61)			(10)		14			—			—			612			61
Consumer loans		(810)			(1,438)			(2,296)			(3,399)			(5,297)		596			810			1,438			2,296			3,399
Total charge-offs		(1,212)			(3,411)			(4,417)			(5,063)			(7,003)		857			1,212			3,411			4,417			5,063

Recoveries:
Real estate loans:
Residential		98			148			141			121			102		38			98			148			141			121
Commercial		—			—			—			17			—		460			—			—			—			17
Commercial loans		70			75			19			—			—		—			70			75			19			—
Consumer loans		313			513			628			746			818		384			313			513			628			746
Total recoveries		481			736			788			884			920		882			481			736			788			884

Net charge-offs		(731)			(2,675)			(3,629)			(4,179)			(6,083)
Net (recoveries) charge-offs																(25		)	731			2,675			3,629			4,179

Allowance at end of period	$	5,426		$	5,833		$	5,656		$	6,845		$	10,097		$	5,800		$	5,426		$	5,833		$	5,656		$	6,845

Allowance to nonperforming loans		292.98	%		133.26	%		64.61	%		71.41	%		96.91	%	1,959.5		%	293.0		%	133.3		%	64.6		%	71.4		%
Allowance to total loans outstanding at end of period		1.09	%		1.65	%		1.70	%		2.26	%		3.25	%	0.79		%	1.09		%	1.65		%	1.70		%	2.26		%
Net charge-offs to average loans outstanding during period		(0.17)	%		(0.69)	%		(1.05)	%		(1.35)	%		(1.85)	%	0.00		%	0.17		%	0.69		%	1.05		%	1.35		%


(dollars in thousands)	Fiscal Year ended December 31,												December 31,
	2013				2012				2011				2014				2013				2012
Regular savings accounts	$	14,330	2.13	%	$	11,583	2.18	%	$	7,773	1.60	%	$	20,776	2.7	%	$	14,330	2.1	%	$	11,583	2.2	%
Non-interest bearing		19,386	2.88	%		13,187	2.49	%		15,870	3.26	%	21,790		2.9	%	19,386		2.9	%	13,187		2.5	%
Interest-bearing		73,748	10.96	%		73,660	13.88	%		64,006	13.15	%
Interest-bearing demand													74,238		9.8	%	73,748		11.0	%	73,660		13.9	%
Money market accounts		255,169	37.91	%		202,388	38.14	%		165,561	34.02	%	267,046		35.2	%	255,169		37.9	%	202,388		38.1	%
Certificates of deposit		292,685	43.48	%		211,542	39.86	%		209,762	43.10	%	361,202		47.6	%	292,685		43.5	%	211,542		39.9	%
Brokered deposits		17,890	2.66	%		18,490	3.48	%		23,898	4.91	%	13,546		1.8	%	17,777		2.6	%	18,331		3.4	%
Premiums on brokered deposits		(113)	(0.02)	%		(159)	(0.03)	%		(205)	(0.04)	%
Total	$	673,095	100.00	%	$	530,691	100.00	%	$	486,665	100.00	%	$	758,598	100.0	%	$	673,095	100.0	%	$	530,691	100.0	%



(dollars in thousands)	December 31, 2014
Interest Rate:
<1.00%	$	189,721
1.00% – 1.99%	90,502
2.00% – 2.99%	75,615
3.00% – 3.99%	15,656
4.00% – 4.99%	734
5.00% – 5.99%	2,520
Total	$	374,748


											Percentage of
(dollars in thousands)	Period to Maturity										Total		Period to Maturity										Percentage of Total Certificate Accounts
	Less than 1		> 1 year		> 2 years		More than				Certificate												Percentage of Total Certificate Accounts
	year		to 2 years		to 3 years		3 years		Total		Accounts		Less than 1 year		> 1 year to 2 years		> 2 years to 3 years		More than 3 years		Total		Percentage of Total Certificate Accounts
Interest Rate:																							Percentage of Total Certificate Accounts
<1.00%	$	111,483	$	31,692	$	2,957	$	400	$	146,532	47.18	%	$	163,581	$	25,736	$	404	$	—	$	189,721	50.6	%
1.00% – 1.99%		7,258		11,939		10,006		21,497		50,700	16.32	%	27,119		30,257		15,651		17,475		90,502		24.1	%
2.00% – 2.99%		4,132		26,309		44,962		89		75,492	24.31	%	26,406		45,021		90		4,098		75,615		20.2	%
3.00% – 3.99%		18,936		5,296		7,261		3,084		34,577	11.13	%	5,238		7,224		3,068		126		15,656		4.2	%
4.00% – 4.99%		1		735		—		—		736	0.24	%	734		—		—		—		734		0.2	%
5.00% – 5.99%		—		—		—		2,538		2,538	0.82	%	—		—		—		2,520		2,520		0.7	%
Total	$	141,810	$	75,971	$	65,186	$	27,608	$	310,575	100.00	%	$	223,078	$	108,238	$	19,213	$	24,219	$	374,748	100.0	%



(dollars in thousands)	December 31, 2014
Maturity Period:
3 months or less	$	42,975
Over 3 through 6 months	40,570
Over 6 through 12 months	105,173
Over 12 months	105,668
Total	$	294,386


	Fiscal Year Ended
(dollars in thousands)	December 31,									Twelve Months Ended December 31,
	2013			2012			2011			2014			2013			2012
Balance outstanding at end of period	$	31,793		$	40,686		$	40,573		$	106,897		$	31,793		$	40,686
Average amount outstanding during period		30,054			40,625			38,539		42,597			30,054			40,625
Maximum outstanding at any month end during period		31,793			40,686			40,573		106,897			31,793			40,686

Weighted average interest rate at end of period		2.63	%		3.22	%		3.22	%	1.58		%	2.63		%	3.22		%
Weighted average interest rate during period		3.53	%		3.35	%		3.52	%	2.23		%	3.53		%	3.35		%

									Minimum to be
					Minimum				Well Capitalized
					Capital				Under Prompt
(dollars in thousands)	Actual				Requirement				Corrective Actions			Actual				Minimum Capital Requirement				Minimum to be Well Capitalized Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio		Amount	Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2013:
As of December 31, 2014:
Total capital (to risk-weighted assets)
Consolidated	$	96,981	17.1	%	$	45,386	8.0	%	N/A	N/A		$	101,033	13.75	%	$	58,777	8.00	%	N/A		N/A
Bank		77,862	13.8	%		45,287	8.0	%	56,609	10.0	%	89,177		12.17	%	58,600		8.00	%	$	73,250	10.00	%
Tier 1 capital (to risk-weighted assets)
Consolidated		88,555	15.6	%		22,693	4.0	%	N/A	N/A		92,233		12.55	%	29,388		4.00	%	N/A		N/A
Bank		72,436	12.8	%		22,644	4.0	%	33,965	6.0	%	83,377		11.38	%	29,300		4.00	%	43,950		6.00	%
Tier 1 capital (to average assets)
Consolidated		88,555	11.7	%		30,385	4.0	%	N/A	N/A		92,233		9.87	%	37,381		4.00	%	N/A		N/A
Bank		72,436	9.6	%		30,329	4.0	%	37,911	5.0	%	83,377		8.94	%	37,303		4.00	%	46,629		5.00	%

	~~(i)~~

~~Name~~	~~Age~~	~~Position~~
~~David B. Becker~~	60	~~Chairman, President, Chief Executive Officer and Director~~
~~Nicole S. Lorch~~	39	~~Senior Vice President, Retail Banking~~
~~C. Charles Perfetti~~	69	~~Senior Vice President~~
~~Edward A. Roebuck~~	49	~~Senior Vice President and Chief Credit Officer~~
~~Kay E. Whitaker~~	54	~~Senior Vice President Finance, Chief Financial Officer and Secretary~~


Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities


Period	High (US$)		Low (US$)		Declared Dividends		High (US$)		Low (US$)		Declared Dividends
Year Ended December 31, 2012:
First Quarter	$	10.60	$	6.83	$	—
Second Quarter		10.67		8.87		—
Third Quarter		11.37		9.37		—
Fourth Quarter		15.32		10.67		0.1667
Year Ended December 31, 2013:
First Quarter		19.77		13.67		0.0400	$	19.77	$	13.67	$	0.04
Second Quarter		21.88		14.43		0.0600	21.88		14.43		0.06
Third Quarter		36.00		20.99		0.0600	36.00		20.99		0.06
Fourth Quarter		31.82		20.12		0.0600	31.82		20.12		0.06
Year Ended December 31, 2014:
First Quarter							26.10		19.66		0.06
Second Quarter							24.00		19.38		0.06
Third Quarter							22.00		15.54		0.06
Fourth Quarter							19.00		15.10		0.06



(dollars in thousands)	At or for the Twelve Months Ended December 31,
	2014			2013			2012			2011			2010
Balance Sheet Data:
Total assets	$	970,503		$	802,342		$	636,367		$	585,440		$	503,915
Cash and cash equivalents	28,289			53,690			32,513			34,778			32,417
Loans receivable	732,426			501,153			358,161			335,226			306,390
Loans held-for-sale	34,671			28,610			63,234			45,091			5,008
Securities available for sale	137,518			181,409			156,693			149,270			136,936
Deposits	758,598			673,095			530,691			486,665			422,703
Tangible common equity⁽¹⁾	92,098			86,221			56,663			50,736			44,210
Total shareholders’ equity	96,785			90,908			61,350			55,423			48,897

Income Statement Data:
Interest and dividend income	$	31,215		$	25,536		$	24,374		$	23,944		$	25,296
Interest expense	8,928			8,088			8,532			9,621			10,785
Net interest income	22,287			17,448			15,842			14,323			14,511
Provision for loan losses	349			324			2,852			2,440			927
Net interest income after provision for loan losses	21,938			17,124			12,990			11,883			13,584
Noninterest income	7,174			9,517			11,423			3,559			3,437
Noninterest expense	22,662			20,482			16,613			11,483			10,370
Income before income taxes	6,450			6,159			7,800			3,959			6,651
Income tax provision	2,126			1,566			2,194			773			1,696
Net income	$	4,324		$	4,593		$	5,606		$	3,186		$	4,955

Per Share Data:
Net income
Basic	$	0.96		$	1.51		$	1.95		$	1.11		$	1.74
Diluted	$	0.96		$	1.51		$	1.95		$	1.11		$	1.74
Tangible book value per common share ⁽¹⁾	$	20.74		$	19.38		$	20.13		$	18.07		$	15.75
Weighted average common shares outstanding
Basic	4,497,007			3,041,666			2,869,365			2,859,434			2,848,379
Diluted	4,507,995			3,050,001			2,869,365			2,859,434			2,848,379
Common shares outstanding at end of period	4,439,575			4,448,326			2,815,094			2,807,385			2,807,385
Dividends declared per share	$	0.24		$	0.22		$	0.17		$	—		$	—
Dividend payout ratio ⁽²⁾	25.00		%	14.57		%	8.53		%	—		%	—		%



(dollars in thousands, except share data)	December 31,
	2014			2013			2012			2011			2010
Total equity - GAAP	$	96,785		$	90,908		$	61,350		$	55,423		$	48,897
Less: goodwill	(4,687		)	(4,687		)	(4,687		)	(4,687		)	(4,687		)
Tangible common equity	$	92,098		$	86,221		$	56,663		$	50,736		$	44,210

Total assets - GAAP	$	970,503		$	802,342		$	636,367		$	585,440		$	503,915
Less: goodwill	(4,687		)	(4,687		)	(4,687		)	(4,687		)	(4,687		)
Tangible assets	$	965,816		$	797,655		$	631,680		$	580,753		$	499,228

Total common shares outstanding	4,439,575			4,448,326			2,815,094			2,807,385			2,807,385

Book value per common share	$	21.80		$	20.44		$	21.79		$	19.74		$	17.42
Effect of goodwill	(1.06		)	(1.06		)	(1.66		)	(1.67		)	(1.67		)
Tangible book value per common share	$	20.74		$	19.38		$	20.13		$	18.07		$	15.75

Total shareholders’ equity to assets ratio	9.97		%	11.33		%	9.64		%	9.47		%	9.70		%
Effect of goodwill	(0.43		)%	(0.52		)%	(0.67		)%	(0.73		)%	(0.84		)%
Tangible common equity to tangible assets ratio	9.54		%	10.81		%	8.97		%	8.74		%	8.86		%


⁽³⁾	Net interest margin is net interest income divided by average earning assets.

	~~(6)~~
⁽⁵⁾	Capital ratios are calculated in accordance with regulatory ~~accounting principles~~guidelines specified by our primary federal banking regulatory authority.



	Rate/Volume Analysis of Net Interest Income Twelve Months Ended December 31,
(dollars in thousands)	2014 vs. 2013 Due to Changes in									2013 vs. 2012 Due to Changes in
	Volume			Rate			Net			Volume			Rate			Net
Interest income
Loans receivable	$	8,750		$	(1,718	)	$	7,032		$	2,212		$	(929	)	$	1,283
Securities - taxable	301			(156		)	145			167			(240		)	(73		)
Securities - non-taxable	(1,381		)	(172		)	(1,553		)	15			(85		)	(70		)
Other earning assets	84			(29		)	55			38			(16		)	22
Total	7,754			(2,075		)	5,679			2,432			(1,270		)	1,162

Interest expense
Deposits	1,803			(1,011		)	792			790			(1,101		)	(311		)
Other borrowings	450			(402		)	48			(335		)	202			(133		)
Total	2,253			(1,413		)	840			455			(899		)	(444		)

Increase (decrease) in net interest income	$	5,501		$	(662	)	$	4,839		$	1,977		$	(371	)	$	1,606

	Rate/Volume Analysis of Net Interest Income Fiscal Years Ended December 31,
	2013 vs. 2012						2012 vs. 2011						2011 vs. 2010
(dollars in thousands)	Due to Changes in						Due to Changes in						Due to Changes in
	Volume		Rate		Net		Volume		Rate		Net		Volume		Rate		Net
Interest income
Loans receivable	$	2,212	$	(929)	$	1,283	$	2,233	$	(1,425)	$	808	$	2,209	$	(3,325)	$	(1,116)
Investment securities		210		(353)		(143)		776		(1,177)		(401)		416		(665)		(249)
FHLB stock		—		3		3		(4)		22		18		(11)		26		15
Other interest-earning assets		19		—		19		5		—		5		(5)		3		(2)
Total		2,441		(1,279)		1,162		3,010		(2,580)		430		2,609		(3,961)		(1,352)

Interest expense
Deposits		790		(1,101)		(311)		852		(1,946)		(1,094)		578		(1,566)		(988)
Other borrowings		(335)		202		(133)		71		(66)		5		85		(261)		(176)
Total		455		(899)		(444)		923		(2,012)		(1,089)		663		(1,827)		(1,164)

Increase (decrease) in net interest income	$	1,986	$	(380)	$	1,606	$	2,087	$	(568)	$	1,519	$	1,946	$	(2,134)	$	(188)

Deal name		I-PreTSL I			ALESCO IV
Class		B-2 Notes			B-2 Notes
Book value	$	2,000		$	1,025
Fair value	$	1,371		$	302
Unrealized loss	$	(629)		$	(723)
Other-than-temporary impairment recorded in earnings	$	—		$	964

Lowest credit rating assigned		CCC-			C
Number of performing institutions		14			34
Number of issuers in default		—			1
Number of issuers in deferral		2			2

Original collateral	$	351,000		$	400,000
Actual defaults & deferrals as a % of original collateral		9.26	%		3.88	%
Remaining collateral	$	188,500		$	256,595
Actual defaults & deferrals as a % of remaining collateral		17.24	%		6.04	%
Expected defaults & deferrals as a % of remaining collateral		26.94	%		10.35	%
Performing collateral	$	156,000		$	241,095

Current balance of class	$	33,200		$	56,374
Subordination	$	16,000		$	—
Excess subordination	$	12,328		$	(72,874)
Excess subordination as a % of performing collateral		7.9	%		(30.2)	%

Cash Flow Analysis Assumptions:
Discount margin (1)		6.00	%		12.50	%
Cumulative Default % Range		3.8% - 100	%		2.1% - 54.4	%
(Weighted Average)		(26.9)	%		(9.5)	%
Loss Given Default % Range		85% - 85	%		90% - 100	%
(Weighted Average)		(85)	%		(89.1)	%
Cumulative Prepayment % Range		29.0% - 37.6	%		0% - 100	%
(Weighted Average)		(32.1)	%		(12.8)	%



(dollars in thousands)	1 year or Less				More than 1 year to 5 years				More than 5 years to 10 years				More than 10 years				Total
	Amortized Cost		Wtd. Avg. Yield		Amortized Cost		Wtd. Avg. Yield		Amortized Cost		Wtd. Avg. Yield		Amortized Cost		Wtd. Avg. Yield		Amortized Cost		Wtd. Avg. Yield
Securities available for sale:
U.S. Government-sponsored agencies	—		—	%	—		—	%	811		5.20	%	12,869		2.32	%	13,680		2.52	%
Mortgage-backed securities	—		—	%	—		—	%	55,437		1.66	%	61,697		2.11	%	117,134		1.90	%
Asset-backed securities	—		—	%	—		—	%	—		—	%	4,913		2.47	%	4,913		2.47	%
Total securities available for sale ⁽¹⁾	$	—			$	—			$	56,248			$	79,479			$	135,727

					More than 1 year				More than 5 years
(dollars in thousands)	1 year or Less				to 5 years				to 10 years				More than 10 years				Total
			Wtd.				Wtd.				Wtd.				Wtd.				Wtd.
	Amortized		Avg.		Amortized		Avg.		Amortized		Avg.		Amortized		Avg.		Amortized		Avg.
	Cost		Yield		Cost		Yield		Cost		Yield		Cost		Yield		Cost		Yield

Securities available for sale:
U.S. Government-sponsored enterprises	$	—	—	%	$	20,699	1.04	%	$	10,556	4.67	%	$	26,314	3.31	%	$	57,569	2.74	%
Municipals		—	—	%		3,989	3.58	%		6,848	3.35	%		35,289	3.66	%		46,126	3.60	%
Mortgage- and asset-backed securities – government- sponsored enterprises		—	—	%		823	4.97	%		29,252	2.80	%		44,983	2.59	%		75,058	2.70	%
Mortgage- and asset-backed securities – private labeled		—	—	%		342	4.72	%		—	—	%		971	1.15	%		1,313	2.08	%
Other securities		2,000	2.16	%		—	—	%		—	—	%		3,025	1.55	%		5,025	1.79	%
Total securities available for sale	$	2,000			$	25,853			$	46,656			$	110,582			$	185,091



Name	Age	Position
David B. Becker	61	Chairman, President, Chief Executive Officer and Director
Kenneth J. Lovik	45	Senior Vice President and Chief Financial Officer
C. Charles Perfetti	70	Senior Vice President and Secretary
Nicole S. Lorch	40	Senior Vice President, Retail Banking
Edward A. Roebuck	50	Senior Vice President and Chief Credit Officer

			Accumulated
	Voting and		Other
	Nonvoting		Comprehensive				Total
	Common		Income		Retained		Shareholders’
	Stock		(Loss)		Earnings		Equity
Balance, January 1, 2012	$	41,306	$	1,220	$	12,897	$	55,423
Net income		—		—		5,606		5,606
Other comprehensive income		—		598		—		598
Cash dividends declared ($0.1667 per share)		—		—		(479)		(479)
Recognition of the fair value of share-based compensation		107		—		—		107
Issuance of directors' deferred stock rights		95		—		—		95
Balance, December 31, 2012		41,508		1,818		18,024		61,350
Net income		—		—		4,593		4,593
Other comprehensive loss		—		(4,190)		—		(4,190)
Cash dividends declared ($0.2200 per share)		—		—		(715)		(715)
Recognition of the fair value of share-based compensation		387		—		—		387
Issuance of common stock warrants		255		—		—		255
Issuance of directors' deferred stock rights		127		—		—		127
Net cash proceeds from common stock issuance		29,101		—		—		29,101
Balance, December 31, 2013	$	71,378	$	(2,372)	$	21,902	$	90,908

	2013		2012
ALESCO IV Series B2	$	—	$	112
Mortgage-backed and asset-backed securities – private labeled		49		140
	$	49	$	252

	Accumulated Credit Losses
Credit losses on debt securities held
January 1, 2012	$	1,835
Realized losses related to OTTI		(350)
Additions related to OTTI losses not previously recognized		68
Additions related to increases in previously recognized OTTI losses		184
December 31, 2012		1,737
Realized losses related to OTTI		(603)
Additions related to OTTI losses not previously recognized		31
Additions related to increases in previously recognized OTTI losses		18
December 31, 2013	$	1,183

	Amounts Reclassified from
	Accumulated Other Comprehensive
	Income (Loss)
	for the Year Ended
	December 31,				Affected Line Item in the
	2013			2012	Statements of Income
Securities available for sale
Gain (loss) realized in earnings	$	(63)	$	48	Gain (loss) on sale of securities
OTTI losses recognized in earnings		(49)		(252)	Other-than-temporary impairment loss recognized in net income
Total reclassified amount before tax		(112)		(204)	Income Before Income Taxes
Tax benefit		38		69	Income Tax Provision
Total reclassifications out of accumulated other comprehensive income (loss)	$	(74)	$	(135)	Net Income

	2013
															Total Loans
															90 Days or
	30-59		60-89		90 Days						Total				More Past
	Days		Days		or More		Total				Loans		Nonaccrual		Due
	Past Due		Past Due		Past Due		Past Due		Current		Receivable		Loans		and Accruing
Residential real estate	$	122	$	—	$	603	$	725	$	190,282	$	191,007	$	630	$	—
Commercial real estate		—		—		955		955		141,474		142,429		1,054		—
Commercial		—		—		—		—		55,168		55,168		—		—
Consumer		484		45		84		613		106,949		107,562		150		18
Total	$	606	$	45	$	1,642	$	2,293	$	493,873	$	496,166	$	1,834	$	18

	2013
	Payment Extension			Principal Reduction			Rate Reduction
	Number	Amount		Number	Amount		Number	Amount
Residential real estate	—	$	—	—	$	—	—	$	—
Commercial real estate	—		—	—		—	—		—
Commercial	—		—	—		—	—		—
Consumer	2		2	—		—	2		23
Total	2	$	2	—	$	—	2	$	23

	Amount
2014	$	15,000
2015		11,000
2016		3,000
2017		—
Thereafter		3,000
		32,000
Deferred prepayment penalties on advance restructure		(207)
	$	31,793